Finley: If pot is legal, treat it that way

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Imagine showing up in Lansing with a couple of hundred thousand dollars tucked in your pockets to pay your state tax bill.

As absurd as it may sound, that's the reality for those in the legal marijuana business.

Although Michigan allows legal sales of both medical and recreational marijuana, pot is still listed as a Schedule One narcotic by the federal government.

That means even those who are selling pot legally here are still at risk of running afoul of federal law. And so they can't use banks or other financial service institutions that are regulated and licensed by the federal government.

If they try to do so, even to get a money order to pay their vendors, rent or other expenses, they could face federal money laundering charges. 

And because most credit cards are attached to banks or credit unions, customers can't use them to purchase pot. Nor can they write a check.

That makes marijuana a cash and carry business. 

And that's going to become untenable when recreational marijuana outlets begin opening in large numbers in Michigan, generating an estimated $1.5 billion in sales.

The Obama administration in 2014 issued a guidance on how banks might legally service the marijuana industry by carefully tracking and reporting on their clients. But the fear of a money laundering charge stemming from an inadvertent mistake has discouraged the vast majority from taking the risk.  

Passage of legalized recreational marijuana was supposed to trigger an entrepreneurial boom in Michigan. 

But the strict banking rules means that those seeking to break into the pot business have to have cash — banks can't or won't extend them loans. 

And once established, those businesses are ineligible to claim federal tax credits for their expenses. They have to pay taxes on their full income, with no deductions.

As an investor, forget about adding marijuana stocks to your portfolio. Pot companies can't go public and sell shares on federally regulated exchanges. 

This all is just plain nuts.

Voters in Michigan and nine other states have decided they're OK with marijuana being fully legal. 

Washington should respect that. 

Cutting off marijuana businesses from the financial industry runs counter to the sovereignty of states, and it's dangerous to boot.

Having so much cash being stored and moved about is an invitation for robbery and assault.

It also decreases accountability — with no checks, credit card receipts or other financial paper trails, it's easier to hide income from the tax man.

No legal business should have to operate in what amounts to a black market. Legal business people shouldn't have to walk around with briefcases stuffed with cash handcuffed to their wrists to do their everyday transactions.

Congress could change this, and should. But first it has to overcome its puritanical instincts regarding marijuana.

Changing the banking laws to allow legal businesses to operate as such won't expose one additional child to pot.

But it would allow an emerging industry to move out of the shadows and into the sunlight, where Michigan voters have decided it belongs.

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