Colorado considers ban on using welfare cards at marijuana dispensary ATMs

Welfare money or food stamps for marijuana? It's an urban legend that won't go away in Colorado, and state lawmakers this year are poised to pass a law clarifying that public benefit cards can't be used at dispensary ATMs.

A bill facing its first hearing next week in the state Senate would add marijuana businesses and strip clubs to the list of Colorado businesses where electronic benefits cards — called EBTs — can't be used to withdraw cash. Liquor stores, casinos and gun shops already have such limitations.

Republican Sen. Vicki Marble said marijuana dispensaries need to be added to avoid possible federal intervention if there's evidence of public benefits being spent on pot.

"We stand to lose a lot if we don't show we are trying" to prevent tax money for pot, Marble said.

"The growers here put in a lot of time and effort. A raid would be absolutely devastating to our state."

Marble's bill failed last year amid concerns that because pot shops are concentrated in poor neighborhoods, dispensary ATMs may be the closest source of cash for people without a bank.

This year, Democrats say they support the idea. They say that adding dispensaries to the list may help prevent federal intervention.

Republican Sen. Jeff Sessions of Alabama last year suggested a new federal law banning the use of EBT cards at dispensaries. Currently there's no national standard on public benefit cards at dispensaries.

In Washington state, a 2012 law blocks businesses that ban those under 18 — including strip clubs, bars and now licensed pot shops — from letting people use EBTs to withdraw money.

Despite Washington's law, there were a couple of reported instances over the summer of people using those cards at pot-shop ATMs. The state responded by instructing the new marijuana businesses to install a code in their ATMs preventing further in-store welfare-for-weed transactions.

Colorado state Rep. Dan Pabon, D-Denver, said it's time for Colorado to do the same. He supports a new law clarifying that welfare cards can't being used to withdraw cash at pot shops.

"I don't think a strip club or a liquor store wants to be out of compliance, and neither does a dispensary," Pabon said.

Marijuana industry groups have either supported the bills or taken no position against them.

"We believe this is good for our industry," said Tyler Henson, president of the Colorado Cannabis Chamber of Commerce, which represents dispensaries and edible marijuana makers.

The nascent marijuana industry has been dogged for years by rumors of people using food stamps and welfare money to buy weed. Even without the requirement, many dispensary ATMs are already set to decline EBT cards.

"This fix is not something that is extremely difficult," Henson said.

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Kristen Wyatt can be reached at http://www.twitter.com/APkristenwyatt . Gene Johnson in Seattle contributed to this report and can be reached at http://www.twitter.com/GeneAPSeattle.

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Online:

Senate Bill 65: http://bit.ly/1yUsA8u