Cannabis Industry Creates a Buzz in New Markets

Posted on March 17, 2014 by admin

The legalization of marijuana has been very profitable for Colorado, and it has sparked a new market for products and services that cater to this developing industry. Being one of the fastest-growing and most lucrative industries, the cannabis market is currently valued at approximately $1.4 billion and is anticipated to grow by 64% in 2014, according to market research by The ArcView Group. This is phenomenal, since pretty much every living human over the age of 21 is a potential customer. This has prompte

These figures trump the estimated revenue from the Colorado Senate. At the end of 2013, the Colorado Senate released a statement that estimated that the state’s marijuana industry could reach $1 billion in sales in the 2014, with recreational sales making up about $610 million of that business. For marijuana advocates, taxes were one of the major selling points of legalization. They have said that expanding the market for the federally prohibited plant could give states money for school construction, health care, substance-abuse programs and public health. Colorado’s legalization measure said $40 million in tax revenue would go toward school construction, and in November, voters across this otherwise tax-averse state overwhelmingly approved 25 percent taxes on recreational marijuana.

While new markets are abuzz with these figures, the taxes alone might be enough to halt them. Currently, marijuana sold legally in Colorado is subject to the state’s 2.9% sales tax, an additional 10% state tax on retail marijuana sales and a 15% excise tax on average market rate of wholesale marijuana. However, that currently is not stopping vendors and newbie business owners from jumping on the marijuana bandwagon. For instance, one of first recreational cannabis marketing agencies in Colorado, Cannabrand, is meeting the needs of this high-demand market. Located in downtown Denver, the founders of Cannabrand are turning their passion about the legalization of marijuana into a business dedicated to helping marijuana shops and companies brand themselves.

The newly legalized marijuana industry is creating a major buzz in Colorado. Besides fueling the needs of citizens looking for a legal high, the revenue and taxes are a great help to the state. That being said, only time will tell if the excessive taxes will be the ultimate downfall for legalized marijuana, or if start-ups and companies such as Cannabrand will outlast the eventual consumer freefall that all businesses take.

Denver Joins Chorus Calling for Marijuana Banking Access

Posted on January 23, 2014 by admin

The city council in the region of Denver, Colorado plans on motivating the federal government to support the construction and development of banking services. Millions of dollars are also expected to be generated due to the recent licenses that are given out in the region. Cannabis can now be grown and the Companies can function without any restrictions in regards to payment, payrolls and deposits. The Government is expected to also provide guidance so that financial institutions can smoothly work with the Cannabis Companies. A Councilman named Chris Nevitt pinpoints that Denver, Colorado is paving the road for the future as they show how the process is done correctly and efficiently. The Federal Government does have to get involved though so that the process is smooth for the Cannabis businesses.

The council does have many doubts for the cash business such as it being difficult to pay taxes and increased theft. The lack of financial services is another main worry for Marijuana Merchant Account holders. The Justice Department is also planning on giving a yellow light to the cannabis Companies as they want to work in harmony. The guidance is definitely needed for the cannabis Companies as safety and growth in the industry occurs. Many individuals are debating the issue of whether Companies should be allowed to function, let alone distribute Cannabis to the public. Proponents pinpoint that Cannabis has many soothing and positive effects on the body. People against Cannabis state the negative effects such as tearing down the body structure. Even though there are many proponents and people against Cannabis, the drug will be allowed to be sold in the region of Denver, Colorado without any severe restrictions. Overall, the Cannabis Companies will need support from the banking services in order to function properly in the near future.

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Approximately 348 Marijuana Licenses Handed Out in Colorado

Posted on January 23, 2014 by admin

The state of Colorado handed out the business licenses to Cannabis Companies for the first time. The enforcement division announced approximately 348 licenses were given out in the state of Colorado. 270 of the 348 licenses were handed out to businesses in the region of Denver, Colorado. The 348 licenses include 178 cultivation facilities, 136 retail businesses, 31 manufacturing Companies and 3 test facilities. No other state has given out the licenses for businesses that ultimately produce the marijuana.

Marijuana sales are also expected to boost as the licenses are handed out to businesses. The city of Denver and the Department of License and Excise approved 42 retail stores in the region. The current requirement to receive a marijuana license is that businesses should have an “existing” status. Everybody else will be considered late in the year of 2014.

Existing marijuana Companies will have 3 options that will be available:

Convert recreational sales for people 21 and over.
Sell the recreational and medical marijuana to people 21 and over.
Procure a “co-location” license which will allow the business to sell cannabis to people 18 and over.

Only a small fraction of cannabis businesses actually opened up on January 1^st but many are expected to open up weeks and months after the 1^st day of January. Many people are against and for the recent licenses handed out in the state of Colorado. Proponents of marijuana pinpoint the relaxing effects and the medical benefits. People against marijuana pinpoint the negative effects of using drugs such as the increase of procuring medical conditions.

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$100M Being Sought by Private Equity Fund

Posted on January 23, 2014 by admin

Two executives from High Times have launched a private equity fund and they are attempting to raise $100 million to allow for investments in cannabis companies. The HT Growth Fund has plans to make individual investments of $2 million for marijuana merchant accounts in ancillary companies. These companies, however, do not actually handle any marijuana.

The purpose of these marijuana merchant accounts will be to look for businesses that are established and have reached growth limits. These will be businesses with no access to the traditional capital markets. Instead they will be startup businesses that need assistance with early stages of financing. Five years is the average exit time.

This fund is being run by Michael Kennedy and Michael Safir both of which who have ties with High Times Magazine. If the two are successful then this will make HT Growth the largest funding source in the industry. Some difficulty will lie ahead because many of investors are unsure about providing funds for the cannabis industry.

Kennedy has been with High Times since the 1970’s and has served as both general counsel and director. He runs a law firm that is located in New York City. In addition, he is also a major investor with the company that is owner of the magazine. Safir has been business manager for High Times since 2010.

Additional cannabis-focused investment groups and funds have started forming due to the climate improving daily. Plans by the federal government to being hands-off with marijuana businesses will also serve to have investors more willing to fund these businesses that are starting up.

Marijuana merchant accounts are set up for businesses that sell medical marijuana and need to process credit card payments as well as debit card payments.

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55% Favor Marijuana Legalization in California

Posted on December 10, 2013 by admin

Marijuana Business Daily – December 5th, 2013

The majority of Californians now favor legalizing marijuana for the first time ever, according to a new Field Poll.

The survey, which includes responses from 1,002 registered Californian voters between Nov. 14 and Dec. 5, found that 55% now favor legalization.

Just 31% said they support strict enforcement of the current laws or the passing of tougher laws governing marijuana. Another 12% said they support the current ban on recreational cannabis but believe the government should ease penalties.

New York Revives Medical Marijuana Discussions

Posted on December 10, 2013 by admin

Marijuana Business Daily – December 5th, 2013

The New York State Assembly Health Committee has begun hearings on the benefits of medical marijuana, which could pave the way for legalization next year.

The first meeting – held Wednesday in Buffalo – included testimony from medical marijuana patients from Colorado. The hearings continue today, with more patients and advocates set to testify.

Mark Kleiman, pot’s go-to guy

Posted on December 10, 2013 by admin

Los Angeles Times – December 4th, 2013

Come New Year’s Day, in Washington state and Colorado, marijuana will be legit, courtesy of two ballot initiatives. How do you create a legal business out of an illegal one? After 13 years of Prohibition, the country at least had an earlier legal liquor market to refer to. That’s where Mark Kleiman comes in, the go-to expert on these matters. A UCLA professor of public policy and author and coauthor of books like “Marijuana Legalization,” he’s heard all the jokes about “hemperor” and “your serene high-ness.” He was consulted by Washington state’s liquor control board, which has to come up with the nuts and bolts for the new law and which asked him for, well, the straight dope.

Has your Marijuana Dispensary been discriminated against?

Posted on November 22, 2013 by admin

There is something that screams trouble when it comes to the stories of Marijuana and the dispensaries that process the payments. Mary Jane, as it has affectionately become known over the years, has made great headway into the headlines over the last few months. 17 of our 50 states now have legalized the medical form of the herb mostly for those suffering ailments that we don’t always understand. The herb has been made into paper, clothing, medicine and even a stomach ailment. Helping those that can’t eat to maintain a steady diet and calm their stomach.

If you have a medical marijuana merchant account and you got shut down, it was from Federal Fear that that was grown from. Not too long ago, the Department of Justice came after the herb growers and the dispensaries. They threatened the merchant account servicers, Visa, MasterCard, Discover and American Express with thoughts of loss and arrest if they were involved in any shape or form with marijuana accounts. Well who in their right mind is going to fight with that strategy? They have bigger guns and prosecutors that yell very loud.

As time has passed

Since then, new laws have come into effect and State and Federal Senators, among others, are changing the laws. They have backed off the dispensaries and allowed them to do some good rather than be fraught with evil and uncertainty.

Up front

For customers you have to be in the dispensary with a pin based system to purchase the product, and only a few of the merchant account servicers have come back out of the wood work. Much like the fairytales with the wicked witch, they are tiny rabbits shivering behind whatever they can find to stay safe. Do you blame them?

Specifically

In order to find the marijuana merchant account servicers you need to do a specific search for their services. They might even be a bit skittish, but they were brave enough to try and it’s that attempt at some normalcy that they are reaching for.

Since this is a high risk merchant account, your services may cost a little more than most, but under the circumstances, it is understandable. You will just have to adjust to the cost and pass it on. With the advance of debit and credit card processing, it can only make things a little easier than they were.

Here’s hoping

For those scared rabbits out there, the tunnel is slowly clearing. Dispensaries are coming out of the wood work to do business above ground again. They don’t want to have those large sums of cash on them and would prefer to have the ability to process the debit/credit card amounts over the wires. They want to be secure like everyone else in the merchant account servicer processing arena. So, everyone take a deep breath and try this again.

The Department of Justice has promised that if a dispensary is running within the law, they will be left alone. Let’s hope they get a chance to do that very thing.

How to finance your medical marijuana business

Posted on November 8, 2013 by admin

With more and more states emerging as potential cannabis markets, many entrepreneurs are now interested in starting their own medical marijuana business. As the industry is growing rapidly, many new small business owners who are looking to capitalize with the new market are asking the same key question, how much capital they need and how to finance their medical marijuana business?

According to a few estimates, you may need $15k to $100k to start a medical marijuana business application which will grant you the license to legally do so. Consultants and law firms are charging more and more money as more people become interested in getting a license and starting their own Marijuana business. This indicates that obtaining a license, setting up a website, getting a marijuana merchant account, a shop and going through documentation and legal complications may require a good amount of capital for starting.

So how can you raise funds to finance your medical marijuana business when the banking sector is turning more hostile towards medical marijuana industry due to legalities involved as medical marijuana is still illegal under federal law?

Options for funding your Medical Marijuana Business

Private Investors

With absence of the banking sector, private investors are a great source for funding your business, but it can come at a high cost. With no other alternates available, private investors are charging as high as 25% in interest rate. This rate is often not healthy for sustainable business especially for the medical marijuana industry that also has to pay unusual high federal taxes.

Angel Investing and Venture Capitalist

The other option to get funds is finding an angel investor. In this case, a rich doctor or a successful entrepreneur who agrees to invest in your business by sharing the equity of your business.

Finding a venture capitalist who can invest money in a promising business by sharing the profits is another option. This way, merchants can save the high interest rate, but they need to share the percentage of their business with their investors. The medical marijuana business is doing excellent in terms of profits and growth in states where it is legal, so finding a good angel or venture capitalist is not difficult if you know how to connect with them. A good option is to visit your local business chamber and connect with some of the angel organizations.

According to Adam Bierman, CEO of popular dispensary consulting firm, one pound of pharmaceutical grade marijuana costs $1000 to produce but it sells at $7,500 retail price. This indicates that the huge margin of profit in the medical marijuana industry can lure in big investors easily if you know how to sell your business plan. According to estimates, the $1.5 billion industry in 2013 will expand to $3.3 billion within next two years. With more than 100% promising growth in just next two years, investors are rushing in but you need to make sure that you are finding the right investor with affordable interest rates or favorable equity sharing.

Will my Marijuana Use Prevent Me From Getting Life Insurance?

Posted on October 21, 2013 by admin

This is often a tricky question, but when it comes to Marijuana use, everything is tricky from its legality to finding a medical marijuana merchant account for your medical marijuana dispensary. According to the latest reports, 18 States in America along with Washington DC have allowed the medical use of marijuana but it is still outlawed under the federal law. This adds to the confusion for users of medical marijuana about many related questions, including if they can get a life insurance or not for using marijuana.

To be true, many insurance companies are still confused how to go about the new legality of marijuana in 40% of the States in America. This is a common scientific fact now that marijuana has medical benefits, the reason why it is now legal in many states. Today, the use of medical marijuana is becoming more and more common in United States, something that most life insurance companies were not prepared for.

So what are the scenarios for a person using medical marijuana when it comes to getting life insurance? There may be multiple answers. First, you may run into the company that simply will not allow you to get life insurance for smoking marijuana. These companies are still living in past or don’t know about how to get around the new laws related to legality of medical marijuana in many states.

Some of the other companies may look good for getting life insurance, but they will ask you to pay more for your life insurance as they put you under the category of smokers. In such cases, if you are tested positive for THC, they will not reject your application but you will ask to pay more as a smoker even if you’ve never smoked a cigarette in your life. For these companies, smoking cannabis even for medical use is enough to make you pay higher rates designed for cigarette smokers.

The third and most proactive insurance companies are well aware of all the legality and news related to medical marijuana and they allow you to get life insurance very easily. To find such insurance companies, you can also visit online medical marijuana dispensaries where you buy your medical marijuana, that will share that information with you. With the resolution of medical marijuana merchant accounts, hundreds of online medical marijuana dispensaries are selling medical marijuana online and provide useful information about all the related topics.

The problem with the third type of insurance companies is that they do not have standard laws related to marijuana use. They all have different set of terms and conditions for the cannabis smokers so you need to explore these insurance companies to find the one that best suits you and your lifestyle. For example, American General only allows you to smoke twice a month otherwise your rates will be increased as a regular smoker. Columbus Life provides you with a life insurance based on drug tests. If it is for medical use, you can get a better rate but if heavy use is proved, you will be declined.

In a nut shell, getting a life insurance on normal rates is possible but the choices are limited. So you need to dig into details before getting life insurance from any renowned insurance company.

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Tag Archives: Marijuana Dispensary Merchant Account

Cannabis Industry Creates a Buzz in New Markets

Denver Joins Chorus Calling for Marijuana Banking Access

Approximately 348 Marijuana Licenses Handed Out in Colorado

$100M Being Sought by Private Equity Fund

55% Favor Marijuana Legalization in California

New York Revives Medical Marijuana Discussions

Mark Kleiman, pot’s go-to guy

Has your Marijuana Dispensary been discriminated against?

How to finance your medical marijuana business

Will my Marijuana Use Prevent Me From Getting Life Insurance?

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