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U.S. Territory Could Make History in Legal Marijuana Industry

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hawaii-marijuanaIt isn’t just U.S. states that are ready to jump on board – if they haven’t already – with legalizing marijuana. Legislators in the Commonwealth of the Northern Mariana Islands (CNMI), a U.S. territory, recently approved a bill to legalize marijuana.

By a margin of 18-1, with just one abstention, the CNMI House of Representatives passed the legislation. This piece of legislation seeks to end cannabis prohibition for adults over 21 and creates a system of taxed and regulated sales. It would also welcome medical marijuana and industrial hemp.

This is not the first time that the territory pushed for legalization. In May, the Senate approved a similar marijuana legalization bill. The proposal initially cleared a committee in the House, but its advancement was later halted in response to procedural concerns. It was said that revenue-generating legislation must originate in the House.

As a result, House lawmakers made a few changes to the Senate bill and filed a new proposal of their own. This piece of legislation then won approval by the full chamber.

“The people of the CNMI recognize that the prohibition of marijuana has been terribly misguided and harmful, and our leaders are in touch with the public’s sentiment on this issue,” Lawrence Duponcheel of Sensible CNMI said in a statement.

“Today, members of the CNMI House of Representatives showed their commitment to honoring the will of the people.”

If this bill is successfully enacted, CNMI will become the first U.S. jurisdiction to go directly from outlawing marijuana across the board to allowing recreational use. This is very unique, considering that the territory has no existing medical cannabis program; this is something that has been a precursor to broader legalization in a growing number of states.

It will also be an important milestone because it would make CNMI the first to legalize a system of regulated cannabis production and sales through an act of lawmakers, rather than a ballot measure. (Vermont passed a law earlier this year to legalize marijuana possession and home cultivation, however, the policy does not allow for any form of cannabis commerce.)

Justin Strekal, political director for NORML, commented on marijuana reform’s growing popularity with voters in an interview, saying that “The lawmakers and people of CNMI are on track to make history, and more U.S. policymakers would be wise to take notice before the upcoming midterm elections.”

The next step? The CNMI Senate is now expected to take on the House-passed marijuana legalization bill. These changes have the potential to open up enormous opportunity. Are you hoping to expand your operation or launch your business venture? Consider working with the team at Marijuana Merchant Account and jump in on the expansion of the marijuana industry.

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Banking Woes Continue To Plague Legal Pot Industry

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Marijuana Leaves on Top of PlantsFederal 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.

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

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

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.”

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California’s Hopes for Legal Marijuana Industry are Disappointed

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Legal Marijuana IndustryYears before U.S. states began legalizing recreational marijuana, many people were arguing that the government should legalize marijuana and then tax and regulate it. The government would then be able to bring in heaps of cash. Their argument was that this would also be beneficial to the legal marijuana industry. It would suffocate the illicit market, and people would buy the legal product because the product sells itself.

For California, things have not quite turned out this way. There are many people still buying cannabis on the illicit market, due to steep markups and high taxes on legal shops. Local restrictions have also complicated things, according to survey data recently released from marijuana delivery service Eaze.

“Unlicensed retailers do not have to comply with worker protection laws, test products for pesticides and processing chemicals, or remit taxes,” said a report from the company outlining the findings. “That results in a large pricing benefit.”

The biggest takeaway from the survey was the difficulties of selling legal marijuana in the state, despite California representing the world’s biggest recreational marijuana market. According to Eaze’s results, one in five Californians has bought marijuana from the illicit market (encompasses anything from street sales to shops that don’t have their paperwork together) in the past three months.

Further, 84 percent of those customers are “highly likely” to go back to buying from a seller without a license. Why? People go back to buying from a seller without a license due to “the illicit market having cheaper products and no tax”, explains Eaze. In addition, 17 percent chose an unlicensed source “due to local laws that restricted access to legal cannabis”.

Will Cutting Taxes Provide Relief for Legal Marijuana Industry?

The data also suggests that a 5 percent cut in the overall tax rate in California could draw up to 23 percent of customers buying marijuana from unlicensed sellers into the legal market. Even more encouraging, 84 percent of Californians say they are actually “very satisfied” with the legal market. As far as consumers’ complaints with the legal marijuana business overall, the survey shows that:

    • 47 percent are dissatisfied with excessively high taxes (the most frequent issue)
    • 36 percent cited a lack of electronic payment options
    • And 32 percent listed “overpriced” products

Solution for the Legal Marijuana Industry

To help the legal marijuana industry address the second most cited issue, alternative lenders have been helping these business owners offer a wider range of payment options. Because marijuana is still very much illegal at the federal level, banks fear prosecution if they offer their services to the industry. High-risk processors like Marijuana Merchant Account have stepped in to offer electronic payment options.

As the industry continues to sort itself out – federal government, taxes, regulations – businesses can at least address one of the biggest issues. Offering safe, electronic payment processing ensures your legal marijuana business can offer a seamless and convenient customer experience.

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

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MarijuanaAs 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.

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Lawmakers Advocate Marijuana Banking Protocol Reforms

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marijuana-money-profits-earnings-medical-marijuana-projectCash 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.

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Marijuana Making Millions for Entrepreneurs in Colorado

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Cannabis leaf scattered on the dollars. Seamless imageThe Marijuana industry is performing beyond everybody’s expectations.  Some have even labeled the cannabis business the “second gold rush” after discovering a few marijuana-made millionaires. Colorado boasts of a few entrepreneurs who can be said to have reached the top of the business ladder, some even featuring in one of the weekly editions of the People’s Magazine under a title “Colorado Marijuana Millionaires.”

This remarkable performance continues amid pressure from concerned parents and leaders to ensure minors do not use cannabis or related products. Tripp Keber is one of the Colorado marijuana millionaires and the CEO of Denver-based Dixie Elixirs. He specializes in manufacturing different types of cannabis edibles.

In an Interview with FOX 31, Keber discloses that one of the challenges he faces is branding and packaging. Remember, the law requires that these products must be packaged and labeled in a way that boldly shows that they are to be used by adults only.

The People’s Magazine featured Keber, along with two other women, an act that the former termed as an honor given the tainted reputation of the cannabis sector. Moreover, seeing women making millions out of a product with a questionable reputation is a sign we should change our outlook on Cannabis.

Dixie Elixir has been selling cannabis edibles in Colorado for some time now. Tripp Keber says he shifted focus to edibles in a bid to reach out to all demographics. At the top of the business’s priority is providing safe recreational as well as medical cannabis to those in need in the safest and most consumable way possible.

According to Tripp, he owes much of his success to the good name he has earned from maintaining different state and federal standards on safety as well as any other matters related to the business. While it took him years to meet these standards, Tripp has managed to sell Dixie Elixirs to all of Colorado, and the brand has become quite common on local TV.

The marijuana millionaire also encourages young entrepreneurs in Colorado looking to try out the cannabis sector to take advantage of the new accommodating rules and regulations.

Wrap Up

The primary requirement for getting a license for your cannabis business in Colorado is residing in the state for not less than two years. Perhaps that’s the first challenge you’ll encounter; getting a Marijuana POB account may not be a hassle. And the rest of the setbacks may kick in later as you familiarize with the industry.

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New Bill Seeks to Bring Recreational Marijuana to New Jersey

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medical marijuana payment processingEarly this month, President Donald Trump shared that he was leaning towards supporting new bipartisan marijuana legislation – delivering a blow to Attorney General Jeff Sessions. U.S. Attorney General Jeff Sessions has been an outspoken opponent of marijuana. He lifted an Obama administration policy and freed federal prosecution to more aggressively pursue cases in states where marijuana has been legalized.

When addressing the media at the White House just before departing for the G-7 summit, the president said he would “probably end up supporting” the recent bill being circulated through the Senate by Gardner and Warren.

“I really do. I support Senator Garner,” Trump said. “I know exactly what he’s doing, we’re looking at it. But I probably will end up supporting that, yes.”

While this piece of legislation would not legalize marijuana, it would ease the federal ban on marijuana. At the moment, the marijuana industry is struggling to grow under a two-tiered enforcement system at the state and federal levels. If this proposal is successful, it would leave it up to each individual state to decide what the best approach to marijuana is within their state.

Don Murphy, conservative outreach director of the Marijuana Policy Projected, has called the bill the “most significant piece of marijuana-related legislation ever introduced in Congress.”

For consumers and merchants, this legislation would protect the individuals who choose to use or sell cannabis (as long as they are following state local laws). For example, the bill would amend portions of the Controlled Substances Act, ensuring that buying or selling cannabis would not be considered drug trafficking. Even so, some federal restrictions will remain (e.g. sales of non-medical marijuana to individuals under 21).

The Impact of New Legislation on Marijuana Merchants

Besides the ease in federal restrictions, how will President Trump’s support impact marijuana businesses? At the moment, marijuana companies are forced to operate in cash-only. They struggle to secure loans and merchant accounts from banks. The changes this bill would lead to would allow banks and financial institutions – currently fearful of federal prosecution – to freely work with any marijuana merchant adhering to state laws.

In the meantime, the marijuana industry continues to rely on high-risk providers like Marijuana Merchant Account. Your cannabis company can take advantage of a full suite of payment solutions that work for your business. These merchant services allow you to accept all card types for a convenient customer experience and utilize recurring payments for discount payments and memberships. ECheck processing also allows you to accept electronic checks over the phone or internet.

If you need secure payment processing, consider the many benefits of working with Marijuana Merchant Account. Your account can be setup in as little as 24 hours.

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Canada Becomes Second Country to Legalize Recreational Marijuana

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Medical Marijuana Payment ProcessingCanada has just become the second country to permit widespread sales and use of cannabis. Legislation approved early this month pushed the country one step closer to making it a reality. Just days ago, on June 19, Canadian lawmakers announced that they had approved landmark legislation to fully legalize marijuana.

In a session that lasted six hours on June 7, the Senate voted 56 to 30 – with just one abstention – in favor of a version of the bill that includes several dozen amendments. One of those amendments would be laying down stricter rules for advertising for cannabis businesses. The new law, which is being called a ‘historic’ piece of legislation, will come into effect on October 17 this year.

In approving the bill, Canadian senators acknowledge that the country will face many new obstacles. For example, the nation will face international scrutiny. Specifically, over whether this new law puts Canada in violation of U.N. anti-drug treaties. The Canadian government will also have to inform its citizens that admitting to marijuana use could create problems when crossing the U.S. border (or prevent them from entering altogether). According to the Drug Enforcement Administration, marijuana is still classified as a Schedule 1 drug with “no currently accepted use and a high potential for abuse.”

If all goes as expected, the Canadian government plans to launch legal sales in just a couple of months. In comparison, the approach and acceptance of legalization in the U.S. is very different from the experience thus far in Canada.

In the U.S., just 9 states and the District of Columbia have legalized cannabis. As mentioned, cannabis is still very much illegal at the federal level. Marijuana merchants find themselves caught between the state and the federal government. Trying to operate smoothly and accept any payment besides cash is a real challenge for U.S. merchants, since banks shy away from the industry for fear of federal prosecution.

Medical marijuana in Canada, on the other hand, has been legal since 2001. In addition, recent estimates have set recreational marijuana sales in Canada as high as $3.3 billion by 2027; this is mainly due to the fact that businesses in Canada will be able to work nationally, unlike the cannabis firms in the U.S.

While there has been hints of change coming in the U.S., thanks to new legislation moving through Congress thanks to Sen. Gardner and Sen. Warren, marijuana businesses are still struggling to find the business solutions they need. Without a secure merchant account, they are unable to accept anything but cash from their customers, impractical not to mention completely unsafe.

To provide a solution to this every-growing problem, Marijuana Merchant Account offers wide variety of merchant services, including: payment processing solutions, ECheck services, business funding options and more. If your cannabis firm needs safe and convenient payment processing, contact the experts at MMA for more information on how to get started.

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