Pharmacies Await Legalization while Pot Firms Gain

Posted on May 20, 2014 by admin

Any ideas or dreams of profit and competition for CVS Caremark Corp., Walgreen Co., and Rite Aid Corp. will not be coming true anytime soon. Even though 21 states have legalized pot for medical use, the drug is still currently illegal under federal law. Because of this, banks are hesitant to accept any money from the sale of marijuana; thus, leaving the market to local entrepreneurs.

As long as marijuana is classified as a Schedule 1 drug, pharmacies will not be able to sell medical marijuana legally. According to an article by Bloomberg’s Shannon Pettypiece and Sonali Basak, “The drug is classified as a Schedule I controlled substance, defined as having a high potential for abuse with no accepted medical use.” The article goes on to say that “Schedule 1 drugs, which includes heroin, can’t by law be prescribed or dispensed.”

In order for pharmacies to be able to dispense controlled substances, it must be registered with the U.S. Drug Enforcement Agency. All three major pharmacies, Walgreen, CVS, and Rite Aid have announced separately that they have no intentions of selling medical marijuana, which would jeopardize their company’s registration with the DEA.

According to Bloomberg Industries analyst Brad Barker, “That may change if the U.S. Congress sees taxes on the drug as a way to raise money.” If more products were made that were approved by federal regulators, more pharmacies might be able to sell medical marijuana. For example, Marinol is an approved prescription pill made with synthetic cannabinoid for the purpose of treating nausea caused by chemotherapy.

As far as investing, three states do allow medical marijuana companies to make a profit from the sale of pot. Shareholders have already begun investing in publically traded marijuana companies. Others, such as large industries and the larger pharmaceutical companies are looking into it in order to be prepared for when legalization occurs.

According to Bloomberg, “Until legalization or more products are marketed by pharmaceutical companies, it will be an industry dominated by small dispensaries set up to serve about 1.4 million medical marijuana cardholders using the drug to treat their symptoms.”

For now, traditional pharmacies are forced to watch from the sidelines while entrepreneurs make considerable gains. Entrepreneur Khalatbari, in an interview with Bloomberg, says that “We’re making money, we’re employing people, we’re being a beacon of light for this industry and showing it can be done professionally. That to me is a success.” Khalatbari expects to make $2 million in sales this year.

Who really hold the Cards on Rescheduling Marijuana?

Posted on May 14, 2014 by admin

Eric Holder the Attorney General has revealed that the Obama administration wants to work with Congress on rescheduling marijuana. Currently, cannabis is a schedule narcotic under the Controlled Substances Act- with LSD and heroin. Under schedule I you will find drugs that have a high potential for abuse and they have no medical value. Holder said during a House Appropriations Committee hearing,” We would be more than glad to work with Congress if there is a desire to look at and reexamine how the drug is scheduled”.

Currently, the Obama administration wants to work with Congress if, the lawmakers want to take marijuana off the list the federal government considers to be dangerous drugs.

There have been members of Congress that have called on the administration to down grade cannabis without waiting for congressional action. But under the federal Controlled Substance Act, the authority to remove any drug or substance form the schedules the drug or substance must be found to not meet the requirements for inclusion in any schedule. Holder has not admitted if he is willing to do this unilaterally.

There, is no documentation of deaths due to over dosing on Marijuana, still the federal government treats marijuana as a Schedule I Drug with a “high potential “ for abuse sharing the spot light with Heroin, LSD, and Ecstasy.

By re-categorizing marijuana is not going to legalize the drug under the federal law, but it will make research into the medical benefits of marijuana much easier and allow the marijuana businesses to take tax deductions. Easing the restrictions on research, and rescheduling will allow tax deductions for the businesses of the cannabis industry. Even if marijuana is not legalized the rescheduling of marijuana will change the federal classification, allow it to be somewhat closer to being accepted and a part of reality.

Some Republican lawmakers question Holder’s decision granting Colorado and Washington the right to legalize and regulate marijuana and for taking the state’s actions into consideration when prioritizing marijuana prosecutions.

To-Date any move to reschedule marijuana is probably encountered with resistance from the Drug Enforcement Administration, which Holder “over sees”. Michele Leonhart Chief DEA believes with the growing acceptance of marijuana it will only make her agents fight that much harder against the problems that will be born to the legalization of marijuana. Even with DEA pressure the Obama Administration has decided not to interfere with recreational legalization laws in Colorado and Washington.

Many say that Congress needs to make this change, and the administration would be happy to work with Congress, but what they do not say is the “Attorney General” is the one who has the power to reschedule or remove a drug from the schedules without Congressional support. Even if it looks as though the administration is unwilling to reclassify marijuana without broad consensus.

The Concern with Marijuana Cultivators Water Use

Posted on May 1, 2014 by admin

Marijuana cultivators illegal and legal in Northern California are possibly draining all the water from a region that is shadowed in drought. The streams and rivers are already running dry and the cultivators are sucking what little water is left out of them.

California Department of Fish and Wildlife are finding streams that will probably dry up this year, and the agency feels it is more than likely the marijuana cultivators behind this serious problem.

“Essentially, marijuana will consume all the water that is left, every bit of it, “said State Fish and Wildlife Senior Environmental Scientist Scott Bauer, who specializes in salmon recovery who is currently working on a study of this problem. Hopefully these finding will be released soon, and we will know the real impact of this unregulated industry.

California has been on the radar for a while for polluting the streams and the forest with the use of pesticides and trash. California also has had a history of bulldozing trees and earth to make clearings for gardens.

A red flag goes up when the State Fish and Wildlife see a huge spike in water usage; this is usually an indication that there is a very big possibility that you will find a pot cultivation operation being run.

Over time this increase in water usage will add to the drought conditions, which in turn will add to the habitat degradation and kill off the restoration efforts that many have worked to replenish, and replace.

“The destruction of a habitat is actually quite staggering” said Patrick Foy, a spokesman with the State Department of Fish and Wildlife. “Last year, 24 North Coast salmon-bearing tributaries were reported to have gone dry, though not all were verified by the agency” said Bauer

Even if California was not having a problem with drought there still would not be enough water for the marijuana cultivators because the plants require a vast amount of water and the industry is growing rapidly.

Illegal marijuana was confiscated in California by law enforcement recently it totaled between $2-4 million dollars annually it was estimated that the cultivators used 1.8-billion gallons of water over a five-month growing season which was based on the average water usage documented in a study.

Satellite images, give researchers the information they need to determine that approximately 30,000 legal and illegal marijuana plants are growing all along the four major watersheds just in Mendocino County alone, and there are probably tens of millions more in neighboring Humboldt and Lake counties.

Each plant consumes an average of six gallons of water a day, so the plants in question located in Mendocino County probably consume 180,000 gallons a day from each watershed, which is the size of a 160 foot Olympic-sized pool/spa.

420 Day in Colorado!

Posted on April 30, 2014 by admin

Well it looks as though Colorado passed yet another vitally important cannabis test last weekend, and yes it just happened to be on target with Colorado’s new recreational marijuana industry.

With Colorado being the first state to legalize recreational marijuana it appears that their annual holiday held on 4/20 went well. Although there were long lines for the Cannabis Cup (which led to a few grumbles) did not led to any real bad behavior among the recreational cannabis consumers that were gathered for the rally in downtown and at other events that were held to celebrate the holiday.

The weekend of 4/20 was everything that the cannabis business had waited for and the cannabis consumers were very relaxed.

The holiday event of course turned out to be very profitable and the Cannabis commerce flowed free. Many recreational marijuana businesses had record sales; which means there was a surge in tax revenue for the state of Colorado.

This was great Public Relations for Colorado’s recreational cannabis industry since cannabis received bad PR in the beginning stages when there were several incidents involving edibles.

There are some individuals who are still against having tens of thousands of stoners gathering at one time, and smoking marijuana freely in public places although authorities did have to issue several thousand citations at the holiday event for public consumption, and some individuals were even taken to detox. Many say this is no different than alcohol-related events. There have always been those who don’t know their limit.

The message the folks of Colorado wants the rest of the world to see is: legalizing marijuana will not create a world of chaos, this is not any different than allowing individuals to drink in a bar/restaurant, or any alcohol-related event and that recreational cannabis users will not gather in large groups to consume marijuana.

Organizers of the rally downtown had a more professional event which brought a more professional side to the event. There were long lines for the vendor booths that sold Leafly and the manufacture CannaEnergy and some of the businesses handed out samples of their products. The atmosphere was very laid back.

Since the recreational cannabis industry is under the microscope due to the side effect of consuming marijuana through candy, cookies, and other means it has caused a black mark on the marijuana businesses as well as the legalization.

Horrible incidents that involve edibles need to be looked at as isolated incidents and they are not directly related to proper cannabis use. There may be possible misuse of the product (this is no different than taking too much of a prescription drug or alcohol poisoning). So the same measures you would take with medicine and alcohol you should also apply with the use of recreational cannabis.

Colorado and other states will need to address some of the issues that are tied to the edibles, and the responsible use of the cannabis users.

But 4/20 in Colorado will not only be marked as a holiday in Colorado. It will also go down on the history books as the first State to allow individuals to openly smoke, purchase, eat, and drink Cannabis in public.

Is the Government turning their heads on Privateer Holdings?

Posted on April 30, 2014 by admin

One of the largest private equity firms in the cannabis industry is Private Holdings. They raised more than $50 million dollars in the last fundraising and the firm is expecting to finalize investments and close its Series B financing effort at the end of May, with the Privateer Chief Executive Officer Brendan Kennedy.

The dollar amount is significant for the cannabis industry; there is documented information that shows high level investors are finally starting to pump money into the cannabis sector. Kennedy said there have been several institutional investors, who had no interest in this industry and wanted no part of it in the past. Now they all want in, because they are witnessing millions of dollars flowing into the industry and investment firms along with some wealthy individuals from mainstream businesses all around the world are starting to invest in these cannabis companies that they once turned their noses up at or didn’t want others to know if they invested in anything connected with marijuana.

ArcView Group has seen a 50% spike in their membership over the last three months. And the ranks have increased more than five times in a year.

Chicago investment firm Lincoln Park Capital Fund closed a deal to channel $27-million dollars into the publicity traded biotechnology company named Nuvilex “they will use this money for MMJ research”.

Mediswipe a publicity traded company that provides various products and services to the cannabis industry received a $1.1-million dollars funding commitment from a private equity firm. This company was also reported to have offered another $500,000 dollars in loans to assist Colorado dispensaries and cultivation operations with the purchase of high dollar equipment and real estate.

Privateer Holdings, which is a cannabis private equity firm that is run by a variety of investment banking veterans, has witnessed interest from investors on the rise and it will not be long before it reaches $25-million dollars in its second funding. In the first funding the firm raised $7-million dollars.

The surge in interest from the mainstream investors has been very successful for the cannabis executives. And cannabis executives are looking forward to the additional surge in the interest rates from the recreational marijuana companies.

There are two executives from High Times magazine, that recently teamed up to start a new investment fund and they are looking to raise $100-million dollars in two years, while the cofounder of a dispensary listing giant WeedMaps has gone in a similar direction. The cannabis business leaders want to continue to saturate the market with the recreational cannabis dispensaries.

The recreational marijuana sales in Colorado and the impending launch of Washington’s adult-use program there have been some major players that have joined this new market. This recreational market is where you will find the real money, and investors are now starting to see recreational marijuana is a money maker.

The federal government is no longer trying to regulate the marijuana markets; they are pretty much taking hands off approach as they lower the risks.

The future is looking very profitable for the businesses that use to be a “can I get a $5.00-dollar bag”?

Obama Administration Ok’s Bank and Marijuana Merchant Account Transactions

Posted on April 25, 2014 by admin

In February, the Obama administration gave banks approval to do business with legal marijuana dispensers. For the first time ever, these dispensers are eligible to secure loans and set up checking and savings accounts with traditional banking institutions.

20 states and the District of Columbia have legalized the sale of marijuana. Colorado and Washington were allowed to legalize marijuana, as long as the states kept a close eye on businesses. In August, the administration set forth eight guidelines for legal dealers to follow to avoid federal prosecution. As a result, the Treasury Department has issued new rules making it easier for banks to do business with marijuana dispensers, while the Justice Department decided not to prosecute banks that do business with legal marijuana dispensaries.

Yet banks are leery of engaging in business with legal dealers, because the sell and distribution of marijuana is still forbidden by federal law.

Frank Keating, president and chief executive of the American Bankers Association voiced financial institution concerns. “This guidance doesn’t alter the underlying challenge for banks. Possession or distribution of marijuana violates federal law, and banks that provide support for those activities face the risk of prosecution and assorted sanctions.”

Currently financial institutions must notify the federal government if they suspect any illegal activity by marijuana merchant accounts. The Treasury department requires banks to submit a “marijuana limited” report that says that dealers are following the administration’s guidelines, and are keeping revenues out of the hands of illegal dealers. If the bank suspects that a marijuana merchant account is engaging in illegal activity, they must file a “marijuana priority” report to notify regulators.

This is exciting news for marijuana dispensers like Steve Horwitz, whose account was closed once Wells Fargo discovered it sold marijuana laced goods. “We’re good customers. We pay extra money for cash deposits, and we move a lot of money. It’s in their interest to keep us.”

Legal marijuana entrepreneurs are not the only ones who would benefit from the integration of marijuana merchant accounts into the banking industry. Financial organizations could win big with legal marijuana business. The industry is expected to gross $2.57 billion this year, according to ArcView Market Research.

marijuana-merchant-account.com has easy payment processing solutions for retail and delivery dispensaries. Our services let your patients donate at the point of sale using a credit or debit card and a PIN number.

The transaction will only cost patients a small convenience fee ranging from $0.99 – $2.00. We offer debit card, credit card, and savings account services. Our retailers choose us for their marijuana merchant accounts because there are no discount rates, interchange fees, or processing fees.

Our MMJ delivery services also offer electronic payments on the go. Contact us at: 1-800-466-1809 to set up your marijuana merchant account today.

Traditional Payment Processing Services Freeze Out Medical Marijuana Merchant Accounts

Posted on April 25, 2014 by admin

Medical marijuana is legal in 17 states and in the District of Columbia. However, federal law does not recognize marijuana dispensaries as legal operations. As a result, medical marijuana dispensaries are being blocked out of banking services. The Huffington Post reported that Wells Fargo recently denied banking services to a Colorado medical marijuana company. “The complex, inconsistent legal environment relating to medical marijuana dispensaries, Wells Fargo has opted not to bank these businesses,” said a representative of the bank.

As major credit card processors like Discover and American Express have decided to not engage in marijuana dispensary payment processing services, other payment processing organizations have also used the ambiguous legal environment to refuse processing services to legal marijuana dispensers. Recently VISA and Mastercard announced that they would let individual acquiring processors decide if they would process marijuana merchant accounts. As a result, large payment processing company, Electronic Merchant Systems (EMS) told its customers last summer:

“In light of recent developments, we wanted to reach out and make you all aware of the latest news regarding Medical Marijuana merchants. Effective July 1st, 2012, MMJ merchants will no longer be able to accept Visa or MasterCard credit or debit cards.”

Traditional Banks

The freeze out by traditional banks and major credit card processors has forced the medical marijuana industry into a “cash only” industry, where customers are forced to carry large sums of cash like criminals to dispensaries. Despite these setbacks, some payment organizations have found creative ways to manage marijuana merchant accounts through payment cards where consumers perform in-person transactions via a PIN-based terminal. The transaction is then processed as a cash withdrawal using a debit card or cash advance.

marijuana-merchant-account.com has easy payment processing solutions for retail and delivery dispensaries. Don’t leave your patients vulnerable to robbery or make them feel like criminals, by having to carry large amounts of cash to purchase their medication. Our services let your patients donate at the point of sale using a credit or debit card and a PIN number.

Our MMJ delivery services also offer electronic payments on the go. Patients simply swipe their card, enter the PIN using a PCI compliant device and access their funds for donation to Medical Marijuana merchants.

It’s just that easy! Contact us at: 1-800-466-1809 to set up your marijuana merchant account today.

Colorado’s Recreational Marijuana Sales Bigger Than They Seem

Posted on April 15, 2014 by admin

According to recent tax data released by Colorado, recreational marijuana sales increased by five percent in February. Sales reached $15.1 million. While this figure is good it is lower than expected. Though February was a shorter month than January which skews the actual perception of how much sales have grown.

Sales were approximately $539,285 each day in the month of February. This, when compared with $464,516 in January, shows that there was actually an increase of around 15%. This would have created a total of $17 million in February vs. $14.4 million in January, if February wasn’t a shorter month. Making sales a few million higher.

As recreational sales rise steadily and are expected to continue to climb as the year progresses, medical marijuana hasn’t suffered as some previously feared. Sales for medical marijuana rose 12% in February reaching $35.2 million. These figures prove that the recreational market is not impacting the medical market revenues. With medical and recreational markets both growing steadily and not adversely affecting each other the industry stands to increase as the year goes on.

The state collects taxes and fees on both recreational and medical marijuana. In February the state collected $3.2 million in taxes and fees related to the marijuana industry. A percentage of that, $438,253 is connected to a 2.9% sales tax on recreational marijuana and $1.43 million is connected to a 10% sales tax on any retail cannabis transactions including ancillary products related to marijuana.

Also as the dispensaries see increases in their sales it will be important to streamline a marijuana payment processing method to better capture sales and assist customers. Currently cash is the only form of payment accepted in dispensaries though that may change soon with the advent of new applications and technology.

Despite the good figures state lawmakers are holding off on making plans for the funds. As the forecast of the tax revenues could be different than what the various offices initially predicted. Therefore until more information can create a more accurate forecast the finalizing of spending plans for the tax revenues are on hold. Especially as the revenue estimates, created by the governor’s office, that were presented to voters who approved the marijuana tax plan in Colorado haven’t yet been consistent with the official tax report.

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App Attempts to Make Marijuana Payment Processing Easier

Posted on April 15, 2014 by admin

With the sales of medical marijuana expected to grow exponentially in the coming years, the cash only payment system currently in place will see a challenge from a new mobile app designed to streamline marijuana payment processing. Itonis, the maker of the MyECheck proprietary mobile app, plans to market its services to medical marijuana dispensaries in order to make marijuana payment processing seamless. There will be a reasonable per transaction cost that will generate revenue for the company which provides cash free point of sale facilitation.

Currently all dispensaries despite the legality of the sale of marijuana in its respective state, must conduct all business with cash only policies due to banking limitations. The mobile app however is designed to function as an electronic check and would allow safe and secure money transfers between transacting parties. This would bridge the gap that is missing in marijuana sales and marijuana payment processing.

Medical and recreational marijuana sales are expected to grow significantly in the next years, especially with the legalization of marijuana use in Colorado and Washington recently. In Colorado for example the Joint Budget Committee has projected marijuana tax revenues to be more than $610 million over the course of the next year and a half.

The company’s CEO, Mark Cheung is confident that the potential revenue stream from the transaction fee the company will charge for each transaction will push Itonis into a new sector that will create financial gains for the company. Initially incorporated in Nevada on July 5, 2005 under a different name, Kenshou, Inc. later changed its name to Itonis on December 2, 2005. Itonis’ recent push to enter this market could break new ground as there is a clear gap in marijuana payment processing for dispensaries currently.

The company could not only become a new marijuana payment processing platform, it could also gain traction with small businesses. Many other companies have had success marketing themselves as simple payment platforms that provide a basic yet crucial service. PayPal and Square have both become highly profitable offering payment processing for a nominal fee.

For Marijuana Dispensary Processing, contact us today!

Marijuana Enforcement Division Grows with the Colorado Marijuana Industry

Posted on April 9, 2014 by admin

With Colorado’s recreational marijuana industry growing at such a rapid rate the regulatory bureau has had to step in and oversee operations. The growth is primarily due to the expected expansion of recreational as well as medical industries. Even though marijuana has been legalized in Colorado the state is still trying to regulate the drug and tie up some of the loose ends.

State officials have received notices of intent from 255 businesses which have plans to apply for a license after July, at which time the state will open up its recreational industry to businesses that were not originally medical marijuana businesses. The state agency overseeing Colorado’s experiment of marijuana legalization is adding enforcement agents, data analysis, along with undercover operatives. Officials believe these steps will make businesses more accountable.

Just a year ago, there was a state audit that criticized what was then the Medical Marijuana Enforcement Division for not being able to track who was growing or selling marijuana. Budgeting and management was bad and there was no definition of marijuana’s role.

Now that there is more solid funding from application and licensing fees the Medical Enforcement Division has a stronger financial footing. This is the agencies third director in the last four years but finally the medical marijuana license applications have been caught up to the applications submitted in mid-2010.

Some industries are still questioning if the agency is capable of handling the challenges, more new businesses, and enforcing the product testing. In 2012 the division had to close three field offices and lay off the staff after a moratorium on new business applications force it to stretch operating expenses budgeted for one year over two years.

The Marijuana Division currently has 30 employees and they would like to see that number increased to 55 hopefully by the end of the fiscal year, in June. With increased manpower they are hoping to open some other offices in Colorado Springs, Northern Colorado and the Grand Junction.

Part of the expansion has made way for the secret shopper program. This will make sure businesses are not selling to minors. This plan is called the “underage compliance program” it is similar to the programs that are used in the liquor industry. There will be consumers sent out to retail shops to try and purchase marijuana. Then the operatives will go to the medical dispensaries and try to purchase cannabis without an official MMJ card. Although Colorado has a smoke your marijuana and feel good attitude these are some questions that linger yet unsaid aloud.

It would appear Colorado has the resources to hire and fund a Marijuana Division for the recreational marijuana industry but what about other states?
Will people who use marijuana be able to travel from state to state or country to country with their marijuana?
Will there be a breathalyzer for someone stoned behind the wheel of a moving vehicle?
Will medical marijuana smokers be able to smoke during work hours?
What about the individuals who drink, smoke marijuana and drive?

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