December 18, 2017

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Cannabis-infused wine claims to give you a buzz — without the hangover -

Friday, December 15, 2017

Los Angeles (Finally) Passes Cannabis Business Regulations -

Tuesday, December 12, 2017

Coffee Shop Wants to Be Denver’s First Legal Cannabis Club -

Tuesday, December 12, 2017

Yes, you’ll be able to smoke weed legally in three weeks. But here are hard realities -

Sunday, December 10, 2017

5 Cannabis Products Changing the Way We Think About Marijuana -

Tuesday, December 5, 2017

Study: Alcohol Sales Fall Following Cannabis Legalization -

Friday, December 1, 2017

California Weed Entrepreneurs Will Make $5.2B In 2018 With Almost No Banks To Put It In -

Monday, November 27, 2017

Pot For Pets? Experts Say Cannabis Can Ease Pain In Animals As Well -

Tuesday, November 21, 2017

A fast-growing cannabis tech company just raised $10 million in a bid to dominate the market -

Tuesday, November 21, 2017

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Saturday, August 29, 2015

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Friday, August 28, 2015

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Thursday, August 27, 2015

Oregon Court of Appeals Doesn’t Find the Smell of Cannabis Smoke to Be “Unpleasant” -

Wednesday, August 26, 2015

Government-Run Cancer Institute Quietly Acknowledges That Cannabis Kills Cancer Cells -

Tuesday, August 25, 2015

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Monday, August 24, 2015

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Saturday, August 22, 2015

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Friday, August 21, 2015

8 Ways to Counteract a Too-Intense Cannabis High -

Thursday, August 20, 2015

Florida Keeps Fighting for Medical Marijuana: The Leafly Cannabis Legalization Roundup -

Wednesday, August 19, 2015

Weekend Weirdness: Pigeon Caught Trying to Smuggle Cannabis into a Costa Rican Prison -

Tuesday, August 18, 2015

California Weed Entrepreneurs Will Make $5.2B In 2018 With Almost No Banks To Put It In

California cannabis entrepreneurs will earn $5.2B in revenue in 2018 as recreational use becomes legal there. The state of California will collect about one billion dollars in accompanying marijuana taxes. These numbers, estimated by Matt Karnes, industry analyst and managing partner of New York’s GreenWave Advisors, point to the giant need for banking and financial services in the nascent legal cannabis industry.  These services however are generally not available says Karnes, and are federally illegal. Some glimmers of change though, are on the horizon.

Banking is severely limited for cannabis industry businesses. As a “schedule one” substance, cannabis is categorized to be as harmful as heroin and banks risk losing their federal charter if they work with cannabis companies.  Financial institutions need to go on record with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCen) when they establish a relationship with a known Marijuana Related Business, and Karnes estimates that just 5% of all banks have done that. He believes that fewer than 1% of all banks in the United States are currently working with cannabis related companies.

Canna-bricks in Seattle

Some technology start-ups like  Shield Compliance  in Illinois are offering software to help banks with compliance, financial transparency and record-keeping to reduce the risk of working in the industry but they haven’t made significant inroads yet.

This leaves many marijuana businesses to have no choice but to operate in cash, so they need to spend extra money on safes, video camera systems, security guards, and armored car pick-ups. Public safety issues can also arise when so much cash is stored in known locations said Karnes.

With limited options, some businesses turn to other methods to find banking. Many hide the nature of their business from their banks according to Karnes. Others turn to cryptocurrencies, which have their own sets of problems.  Cryptocurrencies have a “questionable ability to pass regulatory scrutiny,” because they are so complex, said Karnes. Their lack of transparency also “remains a major stumbling block.” They also tend to fluctuate in value, so are much less stable than regular currency.

Despite the complexities, the industry in California is hiring.  Vangst, a recruitment firm specializing in the cannabis space, says the number of people working full time in legal cannabis grew from 43,374 people in January  to 47,711 in September.

While Attorney General Jeff Sessions regularly sends chills through the industry with his anti-marijuana pronouncements, Donald Trump’s desire to roll back banking regulations includes defanging The Sarbanes Oxley Act which was created to, among other things, reduce accounting fraud by asking company executives to certify their financial reports are accurate. This kind of deregulation could indirectly make cannabis banking easier. If the compliance burden associated with Sarbanes-Oxley is reduced said Karnes, banks and credit unions might have more time for their staff to focus on cannabis.

 

Julie Weed wrote the best-selling All I Really Need to Know in Business I Learned at MicrosoftFollow her on Twitter @julie_weed and at www.julieweed.net

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