Business

Denver Banks: On the Boundary of Federal and State Sovereignty

This past year, Oregon, Washington, and Colorado, too much fanfare and aplomb, legalized the usage of recreational marijuana within their borders. By all measures, this has been a huge triumph for everybody in the state, from law enforcement officers to schools to businesses and even the government. However, as with all state-centered legalization efforts, the specter of the federal government has continued to loom heavy over the issue. Even as the system thrives and communities celebrate, all the “legal” marijuana in Oregon, Washington, and Colorado is still banned federally. Therefore, is technically illegal across the entire United States, due to its Drug Enforcement Agency classification as a Schedule I illicit narcotic substance. This has created a bizarre situation in which reasonable, law-abiding citizens are caught in limbo: criminal and not criminal at the same time. For the day-to-day living of the average cannabis consumer, this will have no effect on their lives. However, for the people creating and supplying the product – recreational and medicinal alike – this creates a number of serious problems, seriously halting the supply and limiting the expression of the market.

The biggest problem with only partial legalization of the plant is the matter of taxable income. Anybody involved in anything other than pure personal consumption is obligated to report the financial impact of their dealings with the cannabis industry on their tax filings. Within the state, Oregon and Colorado have already set up systems to pay their taxes, and the results have been phenomenal – Washington has raked in seventy million in taxes, Oregon: forty million, and Colorado: seventy-six million. In all cases, these states have contributed a significant amount of funds to essential services like education and therapy services. But, while filing state taxes is a breeze (thanks to well-written and established laws), somebody interested in reporting the same on their Federal Tax Forms is required to either lie, or publicly declare to the federal government their involvement in the trade of an illicit narcotic. For those uninterested in spending the rest of their life in prison or forfeiting the entirety of their life savings to the DEA, this has resulted in people hiding their legal money and transactions, and an impossibility of storing their funds in a bank, as banks are required to comply with all federal restrictions.

As a response to the banking problem, Senators from the involved states have come together to propose a bipartisan bill that would allow those involved in the industry to properly store their funds in a bank and help pay their taxes properly. As the industry continues to grow and legalize across the country, this will become increasingly essential to the proper establishment of the helpful, respectful and legitimate industry lurking underneath the looming threats of the DEA, and we can only wish them Godspeed.

This past year, Oregon, Washington, and Colorado, too much fanfare and aplomb, legalized the usage of recreational marijuana within their borders. By all measures, this has been a huge triumph for everybody in the state, from law enforcement officers to schools to businesses and even the government. However, as with all state-centered legalization efforts, the specter of the federal government has continued to loom heavy over the issue.

Even as the system thrives and communities celebrate, all the “legal” marijuana in Oregon, Washington, and Colorado is still banned federally. Therefore, is technically illegal across the entire United States, due to its Drug Enforcement Agency classification as a Schedule I illicit narcotic substance. This has created a bizarre situation in which reasonable, law-abiding citizens are caught in limbo: criminal and not criminal at the same time. For the day-to-day living of the average cannabis consumer, this will have no effect on their lives. However, for the people creating and supplying the product – recreational and medicinal alike – this creates a number of serious problems, seriously halting the supply and limiting the expression of the market.

The biggest problem with only partial legalization of the plant is the matter of taxable income. Anybody involved in anything other than pure personal consumption is obligated to report the financial impact of their dealings with the cannabis industry on their tax filings. Within the state, Oregon and Colorado have already set up systems to pay their taxes, and the results have been phenomenal – Washington has raked in seventy million in taxes, Oregon: forty million, and Colorado: seventy-six million. In all cases, these states have contributed a significant amount of funds to essential services like education and therapy services. But, while filing state taxes is a breeze (thanks to well-written and established laws), somebody interested in reporting the same on their Federal Tax Forms is required to either lie, or publicly declare to the federal government their involvement in the trade of an illicit narcotic.

For those uninterested in spending the rest of their life in prison or forfeiting the entirety of their life savings to the DEA, this has resulted in people hiding their legal money and transactions, and an impossibility of storing their funds in a bank, as banks are required to comply with all federal restrictions. As a response to the banking problem on July 9, Senators from the involved states, including Jeff Merkley (D-OR), Cory Gardner (R-CO), Michael Bennett (D-CO), Rand Paul (R-KY), and Ron Wyden (D-OR), have come together to propose a bipartisan bill that would allow those involved in the industry to properly store their funds in a bank and help pay their taxes properly. The Marijuana Business Access to Banking will allow businesses to operate outside of cash transactions; thus, dramatically decreasing crime surrounding places known to have large amounts of cash on property.

As the industry continues to grow and legalize across the country, this will become increasingly essential to the proper establishment of the helpful, respectful and legitimate industry lurking underneath the looming threats of the DEA, and we can only wish them Godspeed.

PAUL FIMBRES
STAFF EDITOR

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