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Will Increase in Competition Crash the Cannabis Industry in Colorado?

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800x600-e922-odkazujeme01aRecent changes to Colorado’s recreational marijuana market has created a boom in the industry, but has left some afraid of over-saturation. Last October, the state ended its vertical integration rule and opened the market up to new entrants. Although the move has spawned a plethora of new businesses, it has also started conversations of impending price collapse and a fear that merchants will turn to the black market to reap lost profits.

Many growers believe the influx of new entrants will lead to a price collapse in the coming months as stand-alone growers increase competition and flood the wholesale market. On January 1, 2014, only medical marijuana facilities were granted Colorado permits, but last summer the state opened up the application process to businesses who were previously ineligible. This ended a crucial requirement that recreational shops grow at least 70% of the marijuana they sell.

Since the change, the number of recreational licenses in Colorado has jumped by 35% (870 licensed businesses). With this much added competition, fears of price declines may be well founded. According to Cannabase, an online marketplace that pairs growers with retailers, the price of recreational marijuana plummeted $600 per pound between September and December of 2014, while supply jumped at the same time. Cannabase CEO, Jennifer Beck, adds that the margins are now being squeezed in the state which could lead to a price crash.

Michael Elliot, the executive director of the Marijuana Industry Group, is concerned that the price drop could lead to desperate cultivators to turning to the black market to get better prices. If this happens, it would be a violation of one of the core eight principles defined by the Department of Justice. This would jeopardize the issuing of new licenses throughout the state.

Still, increased competition is good news for some in the industry. Businesses that deal in edibles now have more to choose from as more and more types of cannabis flood the market.

Despite the success of the cannabis businesses in Colorado, many merchants still find it difficult to secure competent recreational or medical marijuana payment processing from traditional payment processors. Luckily, there are some experienced online payment processors that specialize in fast and comprehensive marijuana payment processing.

Learn more about expanding your customer’s payment options with credit and debit cards by contacting us today!

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Legalization of Marijuana Creates New Economy in Denver

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??????????????????????????????????????????????????????????????????????????????????Since the legalization of recreational marijuana in Denver in 2014, the city has created a profitable industry where individuals and businesses can thrive. Now the city officially has more marijuana dispensaries than Starbucks, making it the place to be for new marijuana entrepreneurs. Although the city has been in the center of heated debates and punchlines, marijuana’s effects on the economy are no laughing matter.

Since its legalization, marijuana has created a large job market and increased tax revenue, to the tune of $44 million. Now smart entrepreneurs are rushing to the state to grow and sell their own special strands of marijuana. Companies are popping up left and right, dealing with all aspects of the marijuana trade. Many are creating marijuana-infused products, like sodas, lotions, cookies, and other edibles.

Once marijuana was legalized in Denver, many residents were concerned that it would lead to an increase in drug related accidents, drug related crimes, and drug use in children. Thus far, these fears have not come to pass. According to a Denver Post poll, crime rates have remained stable in the city, while its car fatalities and murder rate decreased in 2014. Also there has yet to be any definitive proof that legalization has increased the use of marijuana for people under 21 years of age.

Jack Strauss of the University of Denver, recently conducted a study on the economic impact of two of Denver’s major marijuana dispensaries, Colorado Harvest Company and Evergreen Apothecary. Strauss found that the combined economic impact of both stores was seven times the impact of the average restaurant or retail store in the metro area. Tax revenue from both totaled over $1.07 million for Colorado and over $390,000 for the city.

Despite the embracing of marijuana businesses in Colorado, many marijuana merchants still find it difficult to secure competent recreational or medical marijuana payment processing from traditional lenders. However, there are some experienced online payment processors that specialize in this area.

Learn more about expanding your customer’s payment options with credit and debit cards. Contact us today!

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Obama Makes it Easy for Marijuana Users

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medical marijuana payment processingPresident Barak Obama addressed Kansas City –based KMBC in February about how states could legislate their marijuana laws so that they discourage marijuana use, but don’t impose excessive penalties on recreational users. These comments come at a critical time for marijuana legislation in the country, as a growing number of states are decriminalizing or legalizing the drug. While some states have decided to stick with the current war on weed, others are looking at the drug as a source of new revenue for struggling state.

The comments come after Washington voted to decriminalize the use of small portions of marijuana. Obama defended the move despite the objections of some Republicans. He noted that while states should not encourage marijuana use, they should make a distinction between heavy drug users and recreational users.

Support for marijuana legalization is not only found in the Whitehouse and amongst marijuana users, but is being considered by multiple states in the Union. Desperate state governments are now taxing marijuana, and using the revenue to revamp necessary state programs. Legalization and decriminalization efforts have also cut spending on law enforcement, legal costs, and prison sentences.

Last August, Deputy Attorney General James Cole released a memo that basically ignores the Controlled Substances Act if a specific state has legalized marijuana use. Currently, more than 20 states have either legalized or decriminalized the use of recreational or medical marijuana. Some individuals in these states have started profitable businesses selling medical or recreational marijuana, but are having a difficult time expanding their businesses because most banks refuse to work with them.

In support of the Whitehouse’s position on marijuana, new federal guidelines have made it easier for marijuana merchants to operate without penalty if the state allows it. Still traditional banks believe the new guidelines still place a heavy burden on banks if the marijuana merchants they support turn out to be illegitimate. Therefore, most bank officials have decided to refuse steer clear of marijuana merchants for now.

Without access to a recreational or medical marijuana payment processing, merchants cannot process checks or credit cards. This means that products can only be purchased with cash, limiting merchant potential to expand online.

For fast and dependable medical marijuana merchant accounts, contact us today!

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Virginia Governer Legalizes Liquid Cannabidiol for Epilepsy Patients

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State of Virginia map pinVirginia Governor Terry McAuliffe signed into law a Virginia bill legalizing cannabidiol for patients suffering from severe epilepsy. Cannabidiol is a non-intoxicating form of cannabis that is used to combat certain mental disorders as well as physical conditions. Virginia is now the 12th state in the past year to legalize cannabidiol. Yet, critics of the bill claim that it’s essentially a paper dragon signing as cannabis production is not legal within the state.

Cannabidiol is non-psycho active meaning it does not intoxicate users to feel a high. Unlike THC, this means that users of canibidiol have minimal side effects making it a preferred option among healthcare providers. Cannabidiol does not interfere with mental facilities because it does not use the same pathways within the brain as THC. Cannabidiol even goes so far as to serve as a foil for the negative side effects of THC such as paranoia and and memory impairment.

Research studies on human subjects have been extremely limited with cannabidiol. To date, the overwhelming majority of clinical trials have been on animals. However, in those trials, cannabidiol has shown positive results in reducing nausea and vomiting as well as combating cancer tumors and cells making it a natural research choice for cancer research efforts. It also combats psychosis disorders, is an anti-convulsant, an anti-depressant, and effective against neurodegenerative disorders.

Organizations supporting legalization efforts around the nation decry the bill as useless as cannabis production is illegal in Virginia. Federal law prevents cannabis being transported across state lines meaning that while its use is legal in Virginia, in order to supply it federal law must be broken at some point along the way. This creates a highly risky environment for merchants in an already risky industry.  As it stands now, merchants have a hard enough time finding medical marijuana payment processing for their business much less dealing with Federal laws restricting their supply. The high risk nature of the industry creates complications not present in other industries that further impair the market’s development.

While the headline seems like a positive step, the reality is the lack of reconciliation between state law and Federal law make the signing a moot point. Legalization for cannabidiol is a positive step for medical marijuana patients, but access to cannabidiol remains a risky proposition. Thus, the Virginia Governor’s decision is not widely lauded as a major step forward for legalization efforts within Virginia.

For Marijuana Payment Processing contact us today!

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Rep. David Simpson Proposes Ending Pot Prohibition in Texas

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???????????????????????????????????????????????????????????????????????????????On March 2, Texas’ Independence Day, Rep. David Simpson used the occasion to voice his opinion on marijuana and its place in Texas. He filed a sweeping bill (HB 2165) that would potentially end marijuana prohibition for the state. This proposal would end marijuana prohibition, but it would not substitute a regulatory scheme.

Rep. David Simpson’s feelings on this subject are very different from his colleagues. He will more than likely experience great resistance from within his own party because of his stance on marijuana and its place in the state of Texas.

Simpson has consistently promoted the principles of limited government, individual liberty and personal responsibility. In addition, he is known for his “Christian case” on drug law reform.

In a news release given by his office, Simpson gave the statement that “Current marijuana policies are not based on science or sound evidence, but rather misinformation and fear. All that God created is good, including marijuana. God did not make a mistake when he made marijuana that the government needs to fix”.

Simpson also revealed in his statement that the bill proposes regulating the plant like tomatoes, jalapeños and coffee is regulated. He also expressed the wish for the plant to be able to be utilized for good. He feels that it should be used to help people who suffer from seizures, warriors who suffer from PTSD and other beneficial products.

Rep. Simpson is alone so far in that the only previously filed pot-reform bills proposed this session were by Democrats. The one exception is that there were proposals made by both House and Senate Republicans to allow the production and use of specialized cannabis oil to treat cases of severe epilepsy.

For now, where Texas will come out on the legalization of marijuana is yet to be determined. The war on drugs is not usually addressed by many white suburban law makers, especially a tea party Republican from East Texas. If any Republican would be able to bring the others out of their comfort zone, it would seem that Rep. Simpson would be the one to accomplish it.

Because marijuana is still considered to be a Schedule 1 substance, obtaining services from a traditional financial source for the purpose of operating a business can be very difficult if not impossible. Fortunately, there are other options out there for you.

Marijuana-merchant-account.com, for example, are an online source for high risk merchant accounts, check processing and payment gateways. Their merchant advisors can answer any questions you may have and recommend a solution to you that will help you grow your business and reach the financial goals you have envisioned.

Take advantage of the simple application process, low rates and exceptional customer service.  Apply today to receive marijuana merchant processing for your business so you can start your business smoothly and efficiently.

You are one step closer to success!

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Potential Bill Could Provide Big Opportunities for Marijuana Companies

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medical marijuana payment processingA new measure introduced to Alaska’s state legislature could potentially create opportunities for expansion minded cannabis companies in other states. This measure would ban applicants seeking a recreational cannabis license from accepting third parties.

The result of this piece of legislature would give established companies the upper hand over the smaller startups and individual entrepreneurs. This ban will make it extremely difficult for these startups and entrepreneurs who would most likely have to be entirely self-funded.

According to California cannabis attorney, Ben Adams, “Everybody except corporations that are well-funded are going to be (out of luck), because either you have the money to do this on your own, or you’re prohibited from getting investors”.

In addition, it would be a very simple task for existing companies in other states to bypass the proposed one-year residency requirement for individuals seeking licenses. As of right now, the only requirement by the state of Alaska is that the agent be a state resident while also having and maintaining a registered office. This individual could be an attorney, accountant or even a secretary. In light of this, it would be easy for out-of-state, existing companies to sweep in and take over the market.

Another hit to startups and individual entrepreneurs is that there could be a potential plant-count limit for certain cultivation license categories. However, these regulations do not include a limit for major producers – another plus for the larger organizations.

This bill makes Alaska unique in comparison to other recreational marijuana states. It includes six different license types: home grower, producer, processor, retailer, broker and boutique producer. So far, the only license with plant count limits are the boutique permits and home grow permits. Boutique producer permits would experience a limit of 50 plants, while home grow permits would have a limit of six plants.

This bill has a long journey before it becomes a law. The first scheduled hearing before the state Senate’s Judiciary Committee was set for March 5th and can last until the 19th of April. It will take time to see what decisions will be and what the market dynamics in Alaska are going to look like, especially for startups and individual entrepreneurs.

For those interested in opening a business in the marijuana industry, it can be very difficult if not impossible to receive funding. Why? On the federal level, marijuana is still considered a Schedule 1 substance. In light of this, traditional financial systems are hesitant or refuse to offer their services.

Fortunately, there are providers that specialize in offering high risk, marijuana merchant accounts to businesses in this situation. For example, marijuana-merchant-account.com is your online source for high risk merchant accounts, check processing and payment gateways. Take advantage of the simple application process and low rates.

Apply for a marijuana merchant account today!

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