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Welfare for weed in Colorado? Lawmakers worried, but sellers say it doesn’t happen

By   /   January 14, 2014  /   No Comments

By Eric Boehm | Watchdog.org

At Colorado’s newly minted recreational marijuana shops, cash is king.

Because the drug is still illegal at the federal level, most pot shops in Colorado are not taking credit cards or other forms of electronic payment, thanks to the complications that could come from federal authorities tracking down customers and store owners through those transactions. It’s a legal business, but one that’s forced to operate as if it were still partially in the black market.

AP Photo/Brennan Linsley

SALES BEGIN: Employees help customers at the crowded sales counter inside Medicine Man marijuana retail store, which opened as a legal recreational retail outlet in Denver on Jan. 1.

To make things easier for their customers — and to keep people from having to carry large stacks of cash with them as they come and go, which could attract criminals — many shops have installed ATMs inside.

“That was something that was really important to the police officers that we met with before we opened. They didn’t want people bringing in a lot of cash,” said Jay Griffin, manager of Dank Colorado, a pot shop in Denver that has an ATM.

But what if the cash coming out of those ATMs is coming straight from the taxpayer?

Three Colorado state lawmakers worry it might be.

They have introduced a bill that would ban the use of food stamps and other forms of electronic welfare benefits from being accessed at ATMs located inside marijuana dispensaries, as the pot shops are legally known. The measure, Senate Bill 37, would also block access to welfare benefits at strip clubs.

Lawmakers crafting that legislation didn’t return calls to Watchdog.org on Monday, but state Rep. Jared Wright, R-Grand Junction, told the Associated Press the bill was meant to send a statement.

He said the state shouldn’t be enabling anyone to buy a substance that is illegal under federal law.

It’s not a good use of taxpayer money,” he told the AP.

Federal law requires states to take measures to prevent recipients of public benefits from using EBT cards at gambling establishments, liquor stores and strip clubs. Colorado law currently complies with federal requirements, except for the strip club requirement, which the bill would address.

Colorado law also prohibits EBT cards from being used at firearm dealers.

A state Senate fiscal note says the bill would add “minimal workload increase” for the state and would not cause an increase in state expenditures.

But are Colorado residents really using food stamps to buy pot brownies?

Probably not. The electronic cards that contain SNAP benefits — that’s the Supplemental Nutritional Assistance Program, generally known as food stamps — cannot be used in ATMs to withdraw cash and can only be used to purchase approved food items.

But other forms of public assistance are also issued on Electronic Benefits Cards, or EBTs, and can be converted to cash at any ATM.

Even so, owners of several shops we contacted said that’s not something they’ve seen.

Griffin said he’s never seen anyone try to use an electronic benefits card to buy weed. Dank Colorado has been open since 2008 when it began selling medical marijuana, only expanding into recreational products at the beginning of this year when that became legal.

At The Grove, another Denver-based recreational marijuana shop, manager Kasey Neiss said the cash-only policy was a good way to ensure electronic benefits cards were not being used to buy pot.

She frequently encounters customers trying to use credit or debit cards to buy marijuana — frequently those who come from out-of-state are aren’t familiar with the “cash only” rules at most pot shops — but doesn’t recall anyone trying to use an EBT card.

“I haven’t ever experienced anything like that,” she told Watchdog.org. “And I’ve never heard anyone trying to do that, using food stamps or anything like that.”

Of course, it’s impossible to know whether consumers at the new recreational pot shops are withdrawing cash benefits at another location and then using the cash to buy their drugs. Even Wright’s bill wouldn’t prevent that.

And it won’t be possible to do a comprehensive study of the issue until recreational sales have been legal for a longer period of time.

A hearing for Senate Bill 37 hasn’t been set. The bill has been referred to the Senate’s State, Veterans and Military Affairs Committee.

Boehm is a reporter for Watchdog.org and can be reached at EBoehm@Watchdog.org. Follow @WatchdogOrg and @EricBoehm87 on Twitter for more.

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Eric Boehm