Banking Woes Continue To Plague Legal Pot Industry

Posted on October 26, 2018 by admin

Federal Banking Rules Not Working In Favor Of The Legal Cannabis Industry

Legal marijuana entrepreneurs still find a difficult time getting banks that will accept them. The situation is devastating for the cannabis industry given that more and more states have decriminalized the medicinal and recreational use of marijuana.

Mason Tvert is a renowned Denver-based marijuana policy specialist who has actively participated in the passing of cannabis laws, e.g. Amendment 64 in 2012 that saw recreational cannabis become legal in Colorado.

The struggle to streamline marijuana banking laws

Tvert has spent years trying to solve the banking issue in the cannabis industry. And though hailed as “marijuana’s top evangelist,” he admits that streamlining marijuana banking laws has been a “formidable hurdle.”

But he is positive, “more so now that there’s a bill in the House of Representatives with over 90 co-sponsors: The bipartisan measure dubbed the “States Act” sponsored by Massachusetts Senator Elizabeth Warren(Democrat) and Colorado Senator Cory Gardner (Republican) may shed new light on the issue.” Tvert says.

According to him, passing this bill will mean all transactions initiated at the state level will be viewed as legal under the federal law provided that the business falls in line with the state laws.” Only that way can banks feel safe (from feds) working with entrepreneurs in the pot industry.

Tvert, however, remains realistic about his expectations despite his “strong support for the measure.”

“Regrettably, it’s one of many matters falling victim to the stalemate we experience in Congress. Big Banks need reassurance—most of them want it in a bill and not merely in policy enforcement.”

Among the victims is MPP, the firm that Tvert’s presently stands for. Last year, MPP’s supporting bank PNC—a non-profit advocacy foundation they’ve been working with since 1995— surprisingly cut ties with the firm.

Tvert says that according to news stories, PNC had concerns about the dangers of working with marijuana-related business.

Luckily, MPP later found a new bank that they have kept secret, but Tvert is afraid they may lose a partner owing to the unforgiving banking policies.

Why Did PNC reject MPP after years of working together?

“I’m not aware of the bank’s concern was “offering services to a state-regulated marijuana business,” says Tvert.

The marijuana activist also says he is not aware whether the bank’s decision was linked to the Trump administration known for fervently anti-marijuana advocates like Attorney General Jeff Sessions.

How are marijuana businesses handling their finances?

What happens to all the money these legal cannabis firms make if banks won’t work with them?

Most legal pot companies are now forced to deposit money in safe boxes or contract their cash holding firms, says Tvert.

Secondary vendors like security firms and armored vehicle companies have also come in to fill the niche.

Wrap Up

While these “banking” options are helping marijuana businesses move on, it’s obvious these alternatives are still enough surety of legitimacy for such an upcoming industry.

Unforgiving Federal Banking Laws Threaten To Render Marijuana A Cash-Only Industry

Posted on October 26, 2018 by admin

Female scientist in a hemp field checking plants and flowers, alternative herbal medicine concept

Oklahoma adopted medical cannabis amid a web of challenges, but the worst it will face is operating in a cash-only industry.

Marijuana, still being a federally illegal drug, medicinal cannabis businesses won’t easily get their way into federal banks which leaves the sector solely dependent on cash. Customers must pay in cash; employees must be paid in cash, taxes too, and equipment in the dispensary will be paid for in cash.

For a quick economy like the marijuana industry, a cash-run market will present a host of challenges in the product’s supply chain. Handling payroll will be a problem and the use of cash at each stage could make the sector a target for criminals.

All states that have legalized either recreational or medicinal cannabis face similar problems.

Reforms for Marijuana Banking laws remain pending in Oklahoma as state regulators have failed to agree on the implementation of State Question 788. Meanwhile, The Oklahoma Medical Marijuana Authority is scheduled to start approving marijuana license applications by Aug 25. Oklahoma’s Medical Cannabis Authority works under the Oklahoma State Department of Health.

Sometime back, Oklahoma’s Board of Health repealed its controversial rules that prohibited smokable forms of medicinal marijuana and insisted on a certified pharmacist at every cannabis dispensary. It agreed to a few sets of rules based on advice from the attorney general’s office, but two lawsuits are in court alleging that the Board “overstepped its bounds.”

Federal banking laws particularly those that monitor money laundering and protect bank secrecy hinder cannabis businesses in the District of Columbia plus all the 30 states that have adopted medical cannabis. Marijuana classification as Schedule 1 by federal law makes it illegal for banking institutions to handle the finances on any related entities and any violators may face administrative and criminal charges.

“Banks prefer to keep off anything that might lead to claims of money laundering and will therefore not marijuana businesses to deposit their finances,” said Chris Odinet, a banking law professor at the University of Oklahoma Law. “That is to say no access to payment and credit card services or payroll for staff. We’ve seen employees receive cash, and customers pay cash in Colorado and California.”

However, there are a few exceptions for issuing medical marijuana payments to cannabis-related enterprises under the Treasury Department’s Financial Crimes Enforcement Network. Around 400 banks and credit organizations provide some controlled services to marijuana businesses.

One noteworthy firm is Seattle’s Salal Credit Union which supports 40,000 members and marijuana-related industry enterprises in Oregon and Washington. According to Vice President Carmella Murphy Houston of Salal, the company started offering cannabis banking services in 2014.

“Dealing solely on cash has its drawbacks. You have to worry about transporting and storing cash,” Murphy said. “We have to provide armored vehicles for cash pickups. And while we accept small cash deposits and withdrawals at branches, we need an armored vehicle for anything $5,000 and above in cash per day.”

Why Banks Won’t Touch Legal Marijuana and the Risk it Creates

Posted on October 10, 2018 by admin

As each state legalizes medical and/or recreational marijuana, much has been said about the issue of money. Despite the continued federal prohibition, the marijuana industry has grown rapidly. The emerging market brought in nearly $9 billion in sales in 2017, according to managing director of BDS Analytics, Tom Adams. With the POaddition of the Golden State, it is estimated that this number will increase to $11 billion in 2018.

Believe it or not, money is a problem. A very big problem. The massive amounts of money these marijuana dispensaries are bringing in have nowhere to go. With this cash floating around, marijuana business owners find themselves in a dangerous situation.

Just this summer, the owner of a successful marijuana dispensary in Southern California was abducted from his Orange County home, tortured and mutilated by kidnappers. The reason? They mistakenly believed he had buried tens of thousands of dollars somewhere out in the desert and wanted to know where it was.

In another horrific incident, a 28-year-old employee of a cannabis shop was left to die after being shot by masked men. Witnesses said they saw them escape with a duffel bag full of cash. In South LA, a teenager was shot dead by a dispensary security guard during a robbery attempt.

While California has allowed medical marijuana for years and fully legalized recreational in January of 2018, the state’s largest crop is still very much illegal under federal law. At the federal level, cannabis is classified as a Schedule I substance with no currently accepted medical use and a high potential for abuse.

Afraid to place themselves under federal prosecution if they accept money from marijuana sales, banks turn these businesses away. This leaves marijuana dispensaries with lots of cash and nowhere to put it. A large majority of a multi-billion dollar industry is forced to deal almost exclusively in cash. Thus, more and more dangerous encounters and tragic events are taking place.

“It is a sad, misfortunate, bad application of public policy,” Aaron Klein, policy director of the Brooking Institution’s Center on Regulation and Markets, told The Daily Beast. “One of the purposes of decriminalizing and legalizing marijuana is to reduce crime.”

MedMen is one of the largest cannabis companies in the world, with stores in California, New York and Nevada. Despite raising roughly $135 million in venture capital money and having Chris Leavy as co-chairman, “the world’s largest money manager,” according to Bloomberg, no national financial institution wants anything to do with its money.

“Banking is definitely a challenge for this industry. I think everybody recognizes that,” MedMen spokesperson Daniel Yi said. “As an industry, of course we would like to have access to full banking services, including commercial loans, a line of credit — that’s what every business runs on.”

For now, marijuana dispensaries are continuing to rely on marijuana POB from an alternative provider like Marijuana Merchant Account. This option ensures businesses have a safe way to process transactions and handle their cash.

Lawmakers Advocate Marijuana Banking Protocol Reforms

Posted on September 20, 2018 by admin

marijuana-money-profits-earnings-medical-marijuana-project Cash is King, but having a multibillion-dollar industry rely entirely on it can be a struggle! The whistleblower, Senator Cory Booker pointed out an issue that lawmakers must mull over. He says businesses, even those that sell medical cannabis cannot obtain bank accounts, access funds or issue payroll – even in a place like New Jersey, where medical marijuana has been legal for almost a decade (since 2010). All these because marijuana is still classified as Schedule I under federal law.

“People are literally sitting on thousands of dollars in cash because no banks will open doors for them. They are settling invoices, buying equipment and paying employees in cash, which is a very dangerous system,” Booker said.

Advocating for the same, Sen. Bob Menendez says it is better to have a “legal, transparent process” than a practice where cash rules the day because the money is unbankable due to pre-set banking laws.

The two New Jersey Democrat senators spoke at a seminar courtesy of NJ Spotlight in Pennington.

Booker is backing the Marijuana Justice Act, which advocates legalization weed and obliteration of possession criminal records while Menendez’s bill looks to lay down marijuana banking procedures.

Sen. Menendez condemned U.S. Attorney General Jeff Sessions, a pro-anti-marijuana activist a who at one time said, “Good people don’t smoke marijuana.”

Sessions has so far fought against legalization and any related efforts, even managing to reverse the 2013 Obama administration memo that begged for restraints on prosecution.

But marijuana banking activists and lawmakers still stand their ground.

“The Justice Department should now allow states that have decriminalized marijuana either for recreational or medical uses to operate,” Menendez said.

The Health Commissioner for New Jersey, Shereef Elnahal agreed that amending marijuana banking laws will broaden the marijuana marketplace, more so if New Jersey decriminalizes recreational cannabis.

“Obtaining capital is a major challenge for the medical cannabis dispensaries, and the existing laws only benefit the big players. So such reforms will diversify the market ensuring local entrepreneurs get support as well,” said the Health Commissioner.

The group declared to go up against Trump administration attempts to “weaken the Affordable Care Act.” The bill could be a bone of contention in the oncoming New Jersey congressional campaigns.

Elnahal announced that New Jersey would publicize the individual market and erect a command center to assertively advertise the next Obamacare enrollment period notwithstanding federal funding cutbacks to healthcare providers.

California Moving Towards Public Banking for Marijuana Businesses

Posted on October 13, 2017 by admin

medical marijuana payment processing Too much money? Is that even a thing? For marijuana-related businesses, it is. They make a lot of cash, but have no way to safely deposit it at the bank like other businesses. Banks are subject to heavy regulations and are unwilling to offer solutions to the cannabis industry. Under federal law, marijuana is still a Schedule I substance – listed alongside heroine and LSD. As far as the Drug Enforcement Agency is concerned, there is no accepted medical use of marijuana and a high potential for abuse.

As a result, cannabis-related deposits are not federally insured. These business’ cash are also subject to seizure by the feds. To try to find some solution for these businesses, California is considering whether a state public bank could be the answer. With a projected $6.5 billion in revenue by 2020, the state is anxious to find secure processing options for this potentially very lucrative industry.

On August 10, state treasurer John Chiang met members of the Cannabis Banking Working Group. This meeting was arranged following Californians vote to legalize recreational marijuana, and the issue on the table was exploring bank access for cannabis businesses (or the lack thereof). California estimates that 70 percent of marijuana-related businesses are currently unable to secure the bank accounts they need.

According to Chiang, public banking is an increasingly popular idea for not just marijuana businesses, but others as well. The Great Recession of 2008 left many business owners dissatisfied with the private finance system in the U.S. If California successfully establishes a public institution, it would be run by local treasury officials and beholden to state taxpayers.

The only public bank in the U.S. (for now) is the Bank of North Dakota. This institution was established in 1919 when farmers were unable to secure loans through private banks under the federal system. Colorado and Massachusetts are also considering a similar solution to California. However, those brave enough to consider this option face many obstacles and risks and a complicated process. For example, marijuana-related businesses would still be unable to secure traditional marijuana credit card processing.

While many Californians are optimistic about the future, for now the safest options for marijuana-related businesses remain either in cash (extremely unsafe and impractical) or an alternative solution – like marijuana credit card processing from a high-risk provider like MMA. Depending on the business type, merchants can secure either a recreational or medical marijuana merchant account in as little as 24 hours.

Hawaii Announces First Legitimate Banking Solution for Cannabis Industry

Posted on October 3, 2017 by admin

Cannabis leaf scattered on the dollars. Seamless image Banking partners and regulators have joined together to provide statewide access to financial services for the marijuana industry. On Sept. 13, CanPay, the first legitimate debit payment solution for cannabis and Safe Harbor Private Banking, the leading compliant banking program for marijuana merchants. An unprecedented move, this is the first time banking regulators, regulators and cannabis licensees have worked together.

For a previously unbanked legal medical marijuana market, this is a huge improvement. The 29 states and the District of Columbia have encountered endless obstacles in their efforts to secure payment processing and business funding solutions. Banks accounts are so highly regulated on the federal level that most businesses have been forced to operate in cash-only (obviously unsafe and an impractical situation).

Now, those obstacles no longer exist in Hawaii. Through the newly automated Safe Harbor platform and CanPay, merchants and patients can now enjoy greater convenience, transparencies and security. Hawaii’s Commissioner of Financial Institutions, Iris Ikda, the Executive Director HEALTH Kerry Komatsubara were instrumental in this collaboration.

“The arrival of banking and payment services for the cannabis industry in Hawaii will enable dispensaries to reduce or eliminate cash sales, which will help keep these businesses much more secure, said Komatsubara. “The cash-only precedent in this industry is less than ideal for customers, employees, and the general community, so having alternative options available really does change how we do business for the better.”

Even with this step in the right direction, there is still a long way to go before merchants can easily obtain the specialized services they need. Many merchants in other states that have legalized marijuana are still unable to secure merchant services with financial institutions and other traditional Visa and MasterCard payment processors. With strict federal regulations, banks simply won’t touch cannabis businesses. An increasingly popular solution to this ever-growing problem is a marijuana merchant services with an alternative provider – like Marijuana Merchant Account.

Marijuana Merchant Account Full Service Payment Solutions

With Marijuana Merchant Account, cannabis merchants can quickly secure a merchant account and have it setup in a matter of days. Merchants can easily accept all card types (American Express, Visa, Mastercard and Discover) accept checks over the phone via MMA’s e-check processing services and utilize recurring payments for memberships, discounts clubs and more. The straightforward application process can be completed in a matter of minutes.

If your business is struggling to obtain a merchant account or your account has been suddenly closed, consider what a marijuana merchant account can do for you.

Nevada Pushing to be First State to Allow Recreational Marijuana Lounges

Posted on October 3, 2017 by admin

Smoke If all goes as planned, it would appear that Nevada will be the first state to allow recreational users to consume marijuana in clubs and lounges. The beginning of September, the state Legislative Counsel Bureau confirmed that state law does not prohibit city or county governments from operating a lounge in which patrons may use marijuana. The bureau went on to say that cities and counties are allowed to adopt their own rules governing those businesses; they are also allowed to decide whether those businesses are required to obtain special permits.

At present, public smoking is banned under state law in Nevada’s hotels and casino. Nevada is not alone on this. Washington, Colorado, Alaska and Oregon – the four other states where recreational marijuana use is legal – also do not allow public use of marijuana in lounges or other facilities. Recreational use is restricted to private residences.

There are three other states – California, Massachusetts and Maine – that are finalizing rules in advance of legalized marijuana. Despite legalization advocates efforts, none of these states are currently considering legal pot lounges.

Tom Angell, the founder or Marijuana Majority, a pro-legalization group, says, “Allowing regulated social use areas is a good solution that recognizes cannabis consumers’ rights to congregate just like alcohol drinkers can in bars while also protecting nonconsumers’ rights not to inhale secondhand smoke.”

However, there are many legalization skeptics that are still concerned about what marijuana stores and lounges in their community will lead to. Many are worried that it will increase the risk of crime associated with the industry. While these skeptics do not necessarily want marijuana users to go to jail for using, they are not ready for pot clubs to move into their neighborhood.

“Data show that areas around marijuana stores have higher crime and issues with second-hand smoke and other nuisances. I can’t imagine pot clubs will be a good thing for the state,” says Kevin Sabet, who heads the anti-legalization group Smart Approaches to Marijuana.

There are also concerns that the Trump administration may reverse a long-standing Obama administration agreement; this agreement deemphasized prosecutions of marijuana-related businesses in states that have legalized marijuana. Not knowing which direction the Justice Department will decide to go, many are worried about potential legal issues.

Marijuana businesses already struggle to find the services they need to operate safely. If the Justice Department chooses to shift their stance, it will definitely make day-to-day business operations even more difficult. Most banks refuse to work with marijuana merchant, due to the risks of the industry and heavy federal regulation.

The safest options for these merchants are either operating in cash (obviously extremely unsafe, not to mention impractical) or finding an alternative processor like Marijuana Merchant Account (MMA). Depending on the business type, merchants can secure either a recreational or medical marijuana merchant account to sell marijuana in as little as 24 hours.

Lawmakers Continue Push to Expand Maryland Medical Marijuana Industry

Posted on August 28, 2017 by admin

Medical Marijuana Payment Processing In the final days of the Maryland legislative session, top democrats agreed to the expansion of medical marijuana growers in the state. Two top lawmakers in particular, Senate President Thomas V. Mike Miller and House Speaker Michael Busch, showed their support by writing a letter in July requesting passage of “emergency legislation” in the legislation session beginning January.

Even with these steps forward, there are still many issues to discuss. For example, lawmakers are still wrestling over which businesses should be given entry into the lucrative marijuana market. Fifteen companies were preapproved last year by regulators. If they pass all final inspections and background checks, they’ll be cleared to open cultivation sites. And what about marijuana credit card processing? With strict federal regulations, merchants are unable to secure processing and funding from traditional financial institutions. Most turn to an alternative provider like Marijuana Merchant Account (MMA).

There have been other obstacles in the process of approving five additional growing licenses. In the final days of the legislative session, House and Senate negotiators battled over a compromise concerning how many new licenses should be issued, along with whether the number of growers should be reduced if a company fails inspection.

If the new bill was passed, it would also favor minority-owned companies. This addition is lawmakers attempt to address concerns raised when two companies sued the state after their application was rejected in favor of lower-ranked bids. According to The Washington Post, these lower-ranked bids were from “geographic regions of Maryland where no growers had been approved”.

Opposition arose to expand the Maryland marijuana market, surprisingly, from the fifteen businesses that have already been given cultivation licenses. These companies have banded together to oppose expanding the market. According to them, this expansion completely derails their business plans and pitches to investors; their plans were based on the expectation that they would have exclusive foothold of the marijuana industry in Maryland.

“Our members relied on commitments from the state when making their business decisions, and it is reasonable for them to expect that the state would honor those commitments,” says Jake Van Wingerden, President of Cecil County’s SunMed Growers. “Many of our members are just months away from delivering medical cannabis to patients, and we are opposed to any changes that would cause additional delays to this important program.”

Unfortunately, the session came to a close with no resolution. The bill was pushed off until 11:55p.m. – with a midnight deadline – before it came up before the full House. Republican lawmakers then delayed the vote by asking questions until the clock hit midnight. The 90-day session came to a close.

The result: none of the companies that received the green light to start growing Maryland’s first legal marijuana belong to African Americans, and the legal battle with two rejected applicants continues (they planned to drop the lawsuit if the bill was passed). The decision may be delayed, but the push for growth continues.

Florida Bank Risks Scrutiny by Offering Marijuana Merchants Services

Posted on August 25, 2017 by admin

Welcome to Florida with cannabis leaf road sign illustration, with distressed foreboding background

Despite the growth of the medical marijuana industry, cannabis remains an illegal substance on the federal level. As a result, banks refuse to work with these businesses, leaving many marijuana merchants with little to no options. The majority are forced to operate in cash-only and fear being robbed daily.

A new strategy by Orlando-based financial institution First Green Bank has turned a lot of heads. In fact, the institution has been actively seeking Florida’s marijuana businesses. Considering that marijuana is classified as a Schedule 1 substance by the DEA (no currently accepted medical use and a high potential for abuse), how is this possible?

In a recent interview, Ken LaRoe, founder and chairman of First Green Bank, revealed the institution’s straightforward strategy, “We don’t touch the cash”, he said simply.

While First Green Bank does technically handle the cash, it sticks to a strict hands-off approach. With the federal regulations that make the industry cash based, First Green works closely with an armored car company that transports the cash directly from dispensaries to the nearest Federal Reserve location. This institutions willingness to venture into the industry has made it the exception (definitely not the rule).

A widely cited memo from a deputy attorney general in 2014 created a huge obstacle for banks operating in states where cannabis is legalized. According to the memo, if money from organized crime makes it into marijuana business’ bank accounts, the banker(s) could face criminal prosecution. First Green Bank is one of the few bold enough to accept deposits from cannabis merchants.

Thus far, First Green Bank has collected around $30 million in deposits from marijuana business. According to the FDIC, the bank had $485 million in deposits (as of March 31). However, the institution has not moved to extend loans to marijuana businesses. LaRoe explained that offering loans to these companies involves many risks, including: the property is subject to seizure and contracts can be legally unenforceable.

For now, marijuana merchants in need of business funding can find fast cash solutions with alternative lenders like Marijuana Merchant Account (MMA). Specializing in this industry, MMA can provide funds in as little as 24 hours; the “high risk” nature the industry is not a problem. MMA also offers secure and efficient marijuana processing solutions.

What are LaRoe’s thoughts for the future? Although First Green Bank currently has a monopoly on the Florida medical marijuana industry, he is optimistic that other financial institutions will join in. It would also make him feel more comfortable having others at his side supporting the industry.

“I’d like to see other banks getting into it, just because there’s strength in numbers,” he says.

Medical Marijuana Industry Welcomes Season of Growth in New York

Posted on August 24, 2017 by admin

Statue of Liberty marijuana leafs vector

To the delight of the medical marijuana industry, it’s a season of growth. The campaign to create a medical marijuana program in New York was a very long, uphill battle. Even when it was finally passed in 2014, advocates criticized the many restrictions imposed. Known for being again the legalization of marijuana, many were pleasantly surprised and relieved when Gov. Andrew Cuomo agreed to sign legislation granting five licenses to grow marijuana. Although, the number of dispensaries in the state was capped at 20.

Since then, Gov. Cuomo administration has made many changes. Home delivery of the drug has is now permitted. Chronic pain was added to the list of eligible conditions, and nurse practitioners are now allowed to prescribe the drug. More than 20,000 patients and over 1,000 practitioners have been registered.

Although he still openly opposes recreational marijuana, Gov. Cuomo has been become more accepting of medical marijuana. In June, the state Senate voted to add PTSD to the list of illnesses and ailments eligible for the state’s medical-marijuana program; this decision came six weeks after the Assembly’s decision to do the same.

On August 1, the New York State Department of Health announced that it had licensed five new medical marijuana companies. This addition doubled the number of firms growing and selling medical marijuana products under the (strictly) regulated state program. The new businesses joining the industry are New York Canna, Fiorello Pharmaceuticals, Valley Agriceuticals, Citiva Medical and PalliaTech NY.

Despite growth, there are still many obstacles to overcome, and plenty of issues merchants are currently struggling with. For example, on behalf of four of the five original companies, the New York Medical Cannabis Industry Association, sued the state to try to stop the issuance of new licenses. The claim was that this issuance was an overreach of legal authority.

According to Times Union, “The association claimed that not only would DOH be overstepping its legal authority by issuing more than five licenses, it would imperil the nascent industry because demand for medicine does not warrant doubling of the supply market.”

Another large issue merchants and medical marijuana businesses experience is finding payment processing solutions. Although medical marijuana is legal in New York, it is still illegal at the federal level. With strict federal regulations, banks won’t touch cannabis businesses. An increasingly popular solution is a marijuana merchant account from an alternative provider like MMA. These accounts allow these merchants to avoid operating in cash-only by providing the ability to process credit and debits cards and e-checks.

Regardless of those who have tried to stall progress, the New York medical marijuana industry is moving forward. Even with the many obstacles, it continues to grow and merchants are finding the solutions they need to grow a thriving business.

Company :
Name :
Email :
Phone :
Time Zone :
Volume :
Type :

Category Archives: Marijuana Banking