Pubdate: Sun, 24 Jan 2016
Source: Mail Tribune, The (Medford, OR)
Copyright: 2016 The Mail Tribune
Note: Only prints LTEs from within it's circulation area, 200 word count limit


"You've got to carry weapons, 'cause you always carry cash"

- - "Smuggler's Blues"

The line from Glenn Frey's 1984 hit song about the illegal drug trade 
has taken on a new significance in 2016, as newly legalized marijuana 
retailers are planning to drive up Interstate 5 with large amounts of 
cash to pay the state tax on their pot sales starting next month.

One dispensary owner says he's a little apprehensive, but makes it 
clear that, yes, he will be armed: "We believe in our Second Amendment rights."

It shouldn't have to be that way, but Oregon, Washington and Colorado 
are ahead of the rest of the country in legalizing the sale and use 
of recreational marijuana, and federal law hasn't caught up yet. As a 
result, banks are unwilling to accept deposits from marijuana 
businesses because the drug is still considered a Schedule I 
controlled substance under federal law.

The state Department of Revenue and the IRS, of course, have never 
been known to turn down tax payments, and they aren't about to now. 
The IRS will accept cashier's checks in payment of taxes on income 
derived from marijuana sales. Oregon officials say they will gladly 
accept cash payments of the marijuana sales tax, which they will 
promptly put in a state bank account, because it's not considered 
drug money at that point.

If it sounds as though the state is laundering the proceeds of drug 
sales, that's because it is, for all intents and purposes.

Regardless of whether marijuana legalization was a good idea, it is 
now reality in Oregon, Alaska, Washington and Colorado, and other 
states are likely to follow sooner or later. One argument for 
legalization was to move marijuana out of the shadows and regulate it 
and tax it, with the aim of eclipsing the criminal black market and 
providing a source of revenue to state and local governments.

There are efforts underway in Congress to allow banks to handle 
marijuana proceeds without penalty from federal banking regulators. 
That fix needs to happen, in part to eliminate the hypocrisy of the 
feds accepting tax payments from marijuana sales, while blocking 
banking access to those same merchants. Beyond that, without a fix, 
it will be only a matter of time before marijuana retailers become 
targets of criminals looking to rob them of their cash.

If the state regulatory system is to work smoothly, it makes no sense 
to force retailers of a legal product to behave like drug smugglers 
on the state's highways.
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MAP posted-by: Jay Bergstrom