Marijuana Sales Set to Grow Five Fold in Five Years

Posted on April 15, 2014 by admin

The marijuana business factbook has released data that alleges that the marijuana industry is set to boom. It published figures that purport an increase of five-fold in a five year time frame. This growth quantified will be an increase from an estimated $2.2-$2.6 billion in the current year to $7.4-8.2 billion by 2018. These figures include both medical and recreational marijuana sales. They also account for the addition of an estimated four to five more states passing legislation for medical and/or recreational cannabis usage.

While figures for this year are exactly in line with predictions the lift that is predicted in sales by 2018 is due to the passing of the Cole Memorandum in August. The memorandum by the Federal Department of Justice simply claims a hands off approach to the marijuana industry, though local and state regulations must be adhered to and oversight must be strict.

After this statement from the Federal Department of Justice estimates have increased though it has been noted that they are still quite conservative. The estimates do not account for wholesale cannabis sales nor the multiple ancillary ‘cannabusiness’ and their revenues such as equipment, real estate, etc. It also doesn’t account for the future of marijuana payment processing which is set to expand largely as currently cash is the only method of payment accepted in dispensaries. All of these factors could potentially account for billions more in revenue. Additionally with the predicted addition of four or five more recreational states and two or three medical cannabis states sales will skyrocket.

Currently recreational marijuana sales are legal in merely two states. Though with the predicted additions of four to five more states, 2018 is likely to be the first year that recreational marijuana sales match or even exceed medical marijuana sales in the United States.

None of the figures or estimates include the black market sales of marijuana. It is estimated that the black market has sales figures that are close to $40 billion. This illustrates far reaching potential for the industry beyond 2018. Another note on the future potential of the medical or recreational marijuana industry is that many consumers who currently use the black market have indicated that they would willingly change to a legal dispensary or marijuana supplier when it becomes available in their area.

Cannabis Production May Limit Inventories, Create Dispensary Shortages

Posted on March 19, 2014 by admin

Recreational marijuana dispensaries and growers in Washington State have concerns about the state’s cap on cannabis production. Washington State currently has allotted a 2 million square foot canopy cap for recreational cannabis. Yet, the recreational marijuana industry could face a demand that far exceeds the supply and production capability.

Colorado’s Precedent

January 2013 marked the first month of legal recreational marijuana in the state of Colorado. Dispensaries in Colorado struggled in the opening month of the new industry with many complications. Recreational marijuana businesses contended with long lines, inventory shortages, and price hikes.

Many dispensaries in Washington State believe that recreational marijuana revenue could exceed medical marijuana revenue by up to 300%. Business owners point to Colorado as an example. The RAND corporation estimated Washington State’s cannabis consumption at 175 metric tons in 2013. The cannabis consumption cap would place Washington’s marijuana production rate at roughly 1/4th the consumption rate. Tax-paying businesses may lose the opportunity to acquire transactions that exist on the black market.

Growers Uncertain

Washington State’s recreational marijuana growers remain uncertain about the cannabis cap. Growers can apply for up to three licenses at three different tiers. The most ambitious grower applying for three of the largest available licenses could avail of 90,000 square feet to grow cannabis. Yet the 2 million square foot cap would only allow for 22 growers of that caliber. With more than 2,600 grower’s license applications, growers are stuck in limbo about the reality of their business plans.

Conservative Lawmakers’ Cannabis Concerns

The number of applicants combined with a cap that restricts production far below estimated consumption create dire implications for the new industry. Lawmakers intended to ensure Washington State is not left with a surplus of Cannabis that cannot move over state lines.

Yet the lawmakers may be forfeiting the opportunity to bring marijuana transactions off the black market and into tax-paying dispensaries. If the supply and production is not capable of creating adequate inventories for dispensaries, the entire industry will be hamstrung before it can begin walking.

Marijuana Properties are having a Hard Time Finding Financing in Colorado

Posted on March 17, 2014 by admin

Two of Colorado’s largest banks, Wells Fargo and FirstBank, have announced that they will not offer any new loans to those whose properties are hosting marijuana dispensary businesses. Wells Fargo and Vectra Bank have already told commercial loan clients they will have to either evict the marijuana business or refinance their loan elsewhere. This is not only harmful to the new legalized marijuana businesses, but also to the property owners who may lose paying tenants.

This comes just days after federal banking regulators announced what some said was a green light for doing business with the marijuana industry. These rules require that banks continue to file reports on their interactions with marijuana businesses, and they must identify when transactions are questionable. Banks are leery that notes collateralized by property theoretically subject to federal drug-seizure laws are just too risky. Vectra made that very demand on a commercial loan that had come due, the client will have to find his own refinance bank that will deal with a property owner who hosts marijuana dispensaries.

While this may seem like discrimination against those who own and host legalized marijuana dispensaries, take into account that the federal government still considers marijuana illegal. While practically anyone over the age of 21 can go to Colorado, show there is, and purchase the newly legalized drug, it can only be used in Colorado. It cannot be taken aboard an airplane, nor can the buyer cross state lines with it. It is understandable that banks have to answer to the FDIC, or Federal Deposit Insurance Corporation, and perhaps could worry about penalties that could occur if they garner to these businesses. Regardless of one’s stance on the legalization of marijuana, it is legal in Colorado, and these business owners and their property owners seem to be pushed aside by bankers out of fear.

While the legalization of recreational marijuana has great financial benefits for the state of Colorado, it seems to be having a negative effect on those who are trying to take out property loans, or refinance property loans. While it seems unfair that these businesses and property owners are being singled out, it must be remembered that all reputable banks must answer to the federal government, and the FDIC. Because of this, and because of marijuana’s illegal stance in the federal criminal system, it seems clear that these stances will not change, at least in the near furture.

$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.

Need a Marijuana Merchant account? Sign up below

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.

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.

Is your bank unsure if they can do business with your Medical Marijuana Merchant Account?

Posted on October 21, 2013 by admin

Even though, it is perfectly legal to sell online medical marijuana for dispensaries in 18 states of the 50, federal laws are still against the use of marijuana even for medical use. The confusion around federal and state laws related to the use of medical marijuana leads many banks to discontinue their banking services to MMJ dispensaries and potentially put the entire industry on financial risk. Many big banks avoid confrontations with the federal authorities and turned hostile towards the medical marijuana industry the last few years.

It is a common problem with medical marijuana dispensaries to switch banks frequently due to the hostility of banks and their ever changing demands for providing financial services. The uncertainty of banks towards providing financial services to medical marijuana dispensaries created a financial risk for the entire industry that otherwise are doing excellent in terms of bottom line. Due to new scientific research related to medical benefits of marijuana and awareness in masses about marijuana as a medical cure for a number of medical conditions, the demand for medical marijuana in United States is more than ever.

Even though, there is high demand for medical marijuana, financial services and frequent account discontinuation from banks make it hard for medical marijuana dispensaries to allow credit card payments on their websites. Beside the fact that all major banks and other financial institutions are moving away from the marijuana industry, the online medical marijuana merchant account providers are keeping the industry alive at least online. Websites like marijuana-merchant-account.com provide specialized MMJ payment processing solutions to medical marijuana dispensaries that allow them to make online payments as an option for their customers on websites.

In the absence of banks and other financial institutes, many online merchant account providers like marijuana-merchant-account.com step up to provide the required financial services to the industry, Today, there are hundreds of websites that provide medical marijuana merchant account to dispensaries. Most Merchant Account providers categorize MMJ under the high risk category and impose special terms and conditions. With major banks and credit card processing companies pulling back, online merchant account providers provide many creative and innovative channels to keep the online finances flowing for the MMJ industry.

Marijuana-merchant-account.com are popular for their specialized online processing solutions for high risk industries like medical marijuana. They have providing online financial services to medical marijuana dispensaries and other high risk business since 2011. Their solutions help you choose from the pocket full of processing methods that are legal for the industry. Dispensary owners now have freedom to choose from the set of processing methods that best suits their interests and financial goals. To set up your medical marijuana merchant account with the company, you can visit their site and talk to their customer support staff that can guide you about all the legal issues involved and best possible ways to go around them. Marijuana-merchant-account.com is the sister company of eMerchantBroker.com that is designed to provide exclusive services to the medical marijuana industry.

Breaking the Taboo: How to Get the Right Medical Marijuana Merchant Account

Posted on October 8, 2013 by admin

Getting a merchant account for your medical marijuana dispensary business has been an issue for growers and sellers of the past. Not anymore. Just search online for a merchant account for medical marijuana and it will take you to the sites that will get you the high risk merchant account you need, including us, here at marijuana-merchant-account.com.

Just take the time

Sellers of this Medical Cannabis have a hard time getting a medical marijuana payment processing account because of the legalities and the ‘on the go’ status they have had in the past. But with the increasing legalization of the product, many merchant account servicers are changing their minds and willing to jump into the ring of profits. Slowly, the realization of the farce that has occurred with this herb is coming to light, and the states are changing how they view it.

Look it up

If you are a medical marijuana seller, take to the internet and search for merchant account servicers that are willing to help you with your business. There are more out there than you think. Take in all the information that they provide and ask questions. They have a lot of options for you and all you need to do is access the information.

Your search

You will need to type something in along the lines of “merchant account for medical marijuana” and see what comes up for you. Your options will be many.

Check out

Take the time to compare the sites and the per transaction fee. Find out if you are going to have an annual fee to pay and what it will be per month for your account. Always look to see if you are going to have any hidden fees and don’t be afraid to contact them. A lot of the merchant account servicers have a ‘live chat feature’ and they would be very happy to help you out.

Better, but still touchy

The medical marijuana market is still on the touchy side, but the stigma is desisting. As states begin to legalize the market is growing a little more stable for those of you that sell it. It will take time to grow out of the problem, in the meantime, take some steps to stabilize your business and help it grow.

No matter where your customers are coming from, they will need you market your product and make the payment system easy and effective. Good luck with you endeavor.

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Tag Archives: Medicinal Marijuana Merchant Account