 The Colorado Housing and Finance Authority, which provides funding for affordable housing and small businesses, has put medical marijuana dispensaries on its list of so-called “sin businesses,” prohibiting owners from leasing space in more than 500 commercial properties that the CHFA finances across the state. Owners who have financed their sin businesses--which include liquor stores, massage parlors, gambling outfits, and tanning salons--through federal government programs administered through CHFA are subject to officials from the quasi-public agency enforcing rules preventing them from setting up shop in the space. The agency’s adoption of the new rule has exposed the contradiction between state and federal law on the topic of medicinal marijuana.
When the CHFA began issuing and facilitating loans for small businesses in the 1980s, the agency decided to adopt the Small Business Administration’s sin business policy--which designates which types of businesses are in this category--as its own. Because the primary sources of capital for the CHFA today for small business lending are related to federal funds, the agency doesn’t want to risk doing something that isn’t in conformance with federal government regulations--especially if the regulations don’t recognize medical marijuana as legal, even if Colorado law does. CHFA officials are concerned that properties housing medical marijuana businesses could be impounded by the federal government.
Unwilling to add such risk to CHFA’s nearly $300 million commercial loan portfolio, the agency’s board of directors voted unanimously to prohibit authority-financed properties from being leased to medical marijuana businesses. However, the CHFA could possibly reconsider its blanket prohibition once the turmoil of implementing Colorado’s new medical marijuana laws are ironed out by regulators, says CHFA executive director Cris White. “The regulatory environment is just so in flux right now that we don’t understand the market and don’t know how to underwrite the risk,” he adds.
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