California’s Hopes for Legal Marijuana Industry are Disappointed

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.


California Puts Study of a Public Bank for Marijuana Industry in Motion

hawaii-marijuanaCalifornia has successfully circumvented federal law and created a state-held bank with the purpose of serving the marijuana industry. While many are excited that these plans have moved from words to actions, others are questioning how viable it is. This has led state Treasurer John Chiang and state Attorney General Xavier Becerra to launch a new feasibility study. Chiang’s department will be focusing on the financial and operational issues, while Becerra is examining the legal.

At a recent news conference, Chiang voiced caution about the idea of a public bank, comparing it to – of all things – a potato chip: “Today we are taking the next steps in determining the practical considerations that could lead to the creation of a public bank. Is there a solution there? Maybe. Or is it like a potato chip? It tastes good going down but is ultimately of no nutritional value.”

The need for a public bank for the marijuana industry is not new one. Medical marijuana has been available in California since the mid-1990s. It is the recent boom in growth and acceptance that has more and more people jumping onboard with the public bank idea. As of now, legal cannabis business owners are forced to deal in cash only. Obviously, incredibly inconvenient and unsafe.

Why does a multi-billion-dollar industry find itself in this position? As of now, marijuana is still categorized as a Schedule I illegal drug at the federal level. Fearing entanglement in federal law, banks will simply not extend their services to marijuana merchants. This leaves businesses with a number of major problems. They are not only unable to process customers’ credit and debit card transactions (no merchant account), but they also deal with security issues dealing in cash only and having shocking amounts of cash on hand. They also face potential penalties for paying state taxes and fees in cash.


Experts Say California Will Become Largest Job Creator for Marijuana

medical marijuana payment processingIndustry experts recently shared that California will become the largest recreational cannabis market in the world and the largest creator of jobs for marijuana. Not only is California going to be the largest market, but it is also the ideal location for growers, processors and sellers. For those looking for work in this booming market, growers, processors and sellers are not the only businesses that will be hiring; adjacent services (legal advice, marketing, security, etc.) will be seeking additional staff as well.

According to a report by online employment marketplace, ZipRecruiter, “When it comes to growth in this industry, we see the most significant growth in states that recently loosened their marijuana laws.”

ZipRecruiter’s data revealed Los Angeles and San Francisco advertised the most marijuana-focused jobs in the legal marketplace. Contrary to what you might think, this is not an achievement that was built slowly over time; California’s recreational cannabis market just recently opened. Yet, it has already topped the list of marijuana-related help-wanted postings.

The Cannabis Marketplace report, published by Consumer Research Around Cannabis, revealed that there are approximately 13.7 million adults over the age of 21 in the Los Angeles Greater Metropolitan Area, and approximately 5.3 million of those individuals are cannabis consumers. With California’s legal medical marijuana reaching 3.8B$ in 2017, the question now is how much more will the marijuana market grow with recreational use.

In its 2018 Cannabis Investment Report, investment and research firm Ackrell Capital estimated that a 100B$ market could develop if the federal government supported full legalization – which it currently does not. With the many risks of running a cannabis business – under federal law, marijuana is still a Schedule 1 substance – entrepreneurs and employers constantly worry whether the government will come after them.

The recently revoked Cole Memorandum that protected marijuana companies operating legally under state laws from federal prosecution has also given the industry another reason to be nervous. Attorney General Jeff Sessions has made it clear that he does not support the legalization of marijuana.

The solution for many marijuana merchants has been alternative providers like Marijuana Merchant Account. As the industry continues to grow rapidly and businesses hire employees, many will continue to turn to high-risk providers for marijuana funding. If your business needs cash to grow and hire new staff, consider what a MMA can do for your company.

To set up your Marijuana Funding contact us today!


Cannabis Safe Haven: Berkley First City to Declare Sanctuary for Cannabis

hawaii-marijuanaThe cannabis industry is rejoicing over the recent victory and groundbreaking move for recreational marijuana. The city of Berkeley California has prided itself for years for being a pot-friendly place. Now, the city has taken this acceptance a step further by declaring the city a sanctuary for recreational marijuana – an unprecedented move.

The beginning of February, the Berkeley City Council voted unanimously to declare the city a sanctuary for recreational marijuana. The adoption of this resolution means that Berkeley’s agencies and employees are now prohibited from using city resources to assist in enforcing federal marijuana law or providing information on legal cannabis activities.

“The city of Berkeley does not support cooperation with the Drug Enforcement Administration in its efforts to undermine state and local marijuana laws,” the measure states.

However, the measure does not cover other Schedule 1 drugs the federal government feels have a high potential for abuse. It also does not prevent the city’s resources from being used in the investigation of cannabis-related crimes that are illegal under federal, state and city laws. Part of these efforts appear to be to provide clarity not only for marijuana businesses and users, but also for state and local law enforcement. Until last month, the 2013 Obama-era federal policy – “Cole memorandum” – provided legal shelter for marijuana sales. However, sessions in January ended this policy.

Following the approval of the sanctuary law, Berkeley Mayor Jesse Arreguin released a statement saying, “Millions of peaceful Americans have been fined, arrested, imprisoned, or otherwise needlessly criminalized and stigmatized, sometimes for life, because of their use of marijuana. Ending this misguided policy is long overdue.”

Within a week of this declaration, a Berkeley marijuana lab announced that it would hire hundreds of employees as it prepares for rapid growth. California marijuana companies are expecting the industry to grow by tens of thousands of employees. According to an estimate by The Arcview Group, the total economic output legal cannabis will grow 150 percent from $16 billion in 2017 to $40 billion in 2021, accompanied with an increase of nearly 300,000 full-time jobs.

“The economic excitement around the legal cannabis industry is no longer just theory,” said Troy Dayton, CEO of The Arcview Group.

With high hopes and laws moving in the right direction, more and more cannabis merchants will be entering the market. If your business is seeking funding and services to take advantage of opportunities and grow, consider the recreational cannabis processing services Marijuana Merchant Account has to offer.

Learn more and Get Started Today!


Buying Cannabis in California

Marijuana Business FundingCalifornia constituents unanimously voted in favor of the Adult Use of Marijuana Act (AUMA), famous as Proposition 64 eventually becoming the 5th state to decriminalize recreational pot after Colorado, Washington DC, Oregon and Alaska. It also shouldn’t be forgotten that California was the first state to legalize medicinal cannabis and currently, (and it has been so from January 1, 2018), you can freely smoke your pot in marijuana as long as your use your weed within the law.

And now, gone are the tough days when you hastily purchased your weed from a backstreet peddler or in dimly-lit shops with the fear of Feds pulling over anytime. There’s good-quality legal cannabis in California. Any adult, 21 and over can now walk into one of the many officially authorized dispensaries or order for weed delivery. Today’s cannabis stores are more like any other store where several different product varieties are displayed for potheads or any newbie smokers to choose from.

Here’s what to look for.

  1. lndica vs. Sativa vs. Hybrids

While Indica comes with a more relieving and relaxing effect, Sativa leads to high energy levels and fosters creativity. Most times, an enjoyable mixture of the two is preferred, but all hybrids typically have one dominant species. In essence, most strains we have are hybrids due to the cross-breeding that has continued in cannabis genetics since the first experiments.

Indica has higher CBD levels responsible for relieving pain and anxiety than sativa does. Sativas often this has antidepressant-like effects.

  1. What’s the Smell?

One way to tell the quality of weed before purchase is to break the buds and sniff the scent that comes from it. Buds may smell like, skunk, gasoline or earthy tones. Moldy or strongly ammonia smell means that the buds weren’t correctly cured. Be sure to substantiate that the cultivator behind it is a trusted source.

  1. Blunts or G-bags?

Blunts are cannabis rolled just like cigarettes would be. However, they come in different sizes and therefore differ in price. G-bags come in measures of grams and are a “bulky” way of buying pot, which is way cheaper. Most times, bulk buying will save you money and give you the stoner’s prime pleasure of rolling your marijuana. Plus, you can’t trust all dealers; someone could be hiding their low-quality weed between rolling papers and selling you the same for a high price.

4.THC and CBD

CBD & THC are the two phytocannabinoids that constitute cannabis resins. Each has different medicinal advantages according to ratios used.

  • Tetrahydrocannabinol (THC) –high THC levels are used as an analgesic.
  • Cannabidiol (CBD) –reduces seizures in the body.


It shouldn’t be forgotten that there are some possession and use rules that should be adhered to until America fully legalizes cannabis (if it ever does).


Marijuana is Finally Legal in California But Not Everyone is Enjoying The Party

Marijuana Merchant ProcessingMarijuana decriminalization is now one of the hottest topics in California and the whole of U.S. On Jan. 1, California celebrated the legalization of weed for all over 21s and joined Colorado in the list of ‘high states.’

But soon after (on Jan. 4), Attorney General Jeff Sessions, the weed seller, and pothead’s main headache showed up uninvited and ruined the party. Sessions have been resilient in his efforts to thwart all the years of struggle other lawmakers have made to see that the United States legalizes cannabis. And his Jan. 4 repeal of the Cole memo that protected states from federal interference with local laws threatens to scare the future of weed.

Bipartisan Resistance

Not that Sessions is winning his war on the now flourishing cannabis industry; in fact, he’s been facing a lot of bipartisan resistance. State leaders and Democrats won’t watch their legally established and regulated sector go down with one man’s declaration.

Republicans like Sen. Cory Gardner (Colorado) have even stated that the revoke contradicts President Trump’s campaign promise and Jeff Session’s pledge to the nation’s highest lawmaking office.

Investors in the industry have also warned that it may lead to interference with the billions in revenue and the thousands of jobs Marijuana and related companies are making.

Non-citizens and Immigrants Not Protected in California legalization

But despite legalization, possession, and consumption of legal California pot could still mean severe legal issues for non-citizens and undocumented immigrants.

Cannabis hasn’t been federally decriminalized, and federal regulations control immigration.

Brendon Woods, Alameda County Public Advocate expressed his concerns stating that immigrants are disadvantaged because being convicted for possessing anything above 30 grams of pot, whether in the U.S lawfully or not, is punishable by deportation.

The situation is worsened for non-citizens after A.G Jeff Sessions asked federal prosecutors to crack down on marijuana dealers and users in states that have decriminalized it.

This is so unfortunate given that California hosts over 10 million immigrants. That’s a large number considering the currently trending weed culture meaning chances are a good number may run into problems with the law.

There have been claims of the lack of federal resources to follow up marijuana cases, plus California has more liberal prosecutors; two factors that may cool things down a bit for now. But still, there’s reason to remain paranoid and have some eyes on the back of your head (if you’re a non-citizen).

The uncertainty is primarily caused by the administration’s general stance on immigration.

In a nutshell

The ultimate solution for Americans (including immigrants) would be legalization but getting to that is proving to be a long legal battle. Nevertheless, there’s hope for the cannabis industry and potential full decriminalization. It’s only a matter of time.


Legalized Recreational Marijuana | What Are the New Regulations?

imgresEven if Jeff Session’s won’t give up his battle against decriminalization of recreational cannabis, at least the year set off with some good news for California. As of January 1, the state had legalized marijuana. Currently adults, 21 and above, can lawfully buy recreational marijuana in California. How about this for a change? You can nowadays fearlessly march into a dispensary or even have the pot delivered to your apartment without feeling paranoid.

Market experts keeping an eye on the cannabis industry have spotted it as an ever-growing enterprise. Soon, the likes of Sessions will lay down arms, especially now that it’s being embraced by many other areas like fitness and healthcare to culinary experiences. And now, we can only expect other states to join the weed party.

So far, six states have decriminalized pot and Massachusetts will soon join the group come July 2018. But the drug still has some restrictions to look out for; so before you light some pot, know what’s right! Confirm what you can and cannot do according to the Medical and Adult Use Cannabis regulation and Safety Act (MAUCRSA).

You don’t need a card to buy pot at a dispensary

The only official requirement is a legal government-issued ID showing you’re 21 or above. However, bear in mind that regulations vary by state— each has the right to lay down local rules governing cultivation, distribution, and sale of marijuana.

You pay tax when you buy the weed

The only exceptions are those with state-certified medical cards, which shouldn’t be confused with the medical recommendation from marijuana doctors. Every time you buy, you pay sales tax and use tax on top of your local tax.

Sorry, you still can’t smoke or carry cannabis anywhere you want!

It is still not legal to use your cannabis in public areas, as well as within 1,000 ft of an education or youth center. However, this nearness-to-children rule doesn’t apply if you’re baking your pot in a private house and the smell isn’t detectable. Plus, you can’t also drive while high drive or have an unsealed/open package of pot in your vehicle (unless kept on the car trunk).

Lastly, crossing state borders or flying with pot will expose you to a “possession of controlled substance’ lawsuit.

How much weed can be legally carried around?

Over 21s can carry 28.5g or an ounce of marijuana in flower forms. Or 8.0g of concentrate in oil, dabs or hash.

You can grow your marijuana, but with LIMITS!

Legally, you can grow up to 6 plants at a go on your private property. Growing is prohibited in open backyards if you reside near public spaces. It’s also illegal to sell or distribute your harvest.

In conclusion

The above laws apply to most if not all states, apart from a few tweaks each county can legally make to ensure further control of pot.


California Recreational Use Draws Near, Merchants Still Battle Financial Struggles

imgresEven in the excitement of legal recreational marijuana sales rolling out in California on January 1s t, a very big problem remains: the lack of financial services. The ability for consumers to consume recreational cannabis in California is expected to bring in billions in tax revenue. Despite this massive revenue and the fact that medical marijuana has been legal for two decades, the industry is still unable to secure the financial services they to operate safely and efficiently.

While business is booming – thanks to laws like Prop 64 – marijuana merchants are struggling behind the scenes. More and more people are showing up to make purchases, no longer afraid. But businesses themselves are finding it harder and harder to operate efficiently. Under federal law, cannabis is still classified as a Schedule I drug (alongside heroin and ecstasy). This status is holding these businesses back.

Even though there are federal compliance guidelines, marijuana’s federal status makes banks very wary. Unwilling to push themselves into a risky situation, they choose to stay away from the industry. Despite the industry’s booming growth.

After receiving rejection letter after rejection letter, merchants are forced to operate in cash. Without a merchant account from a bank, these businesses have no means of writing a check, doing a direct deposit or processing debt and credit card transactions. Paying bills requires only minutes of the typical business owner’s time. For the cannabis merchant, the process is not only long and overwhelming, it isE unsafe. From paying employees and bills to paying taxes, all transactions are done solely in cash.

The Internal Revenue Code Section 280E only complicates things further. This tax code was created with the intention of crippling illegal drug trafficking businesses. Since marijuana is still illegal on the federal level, this tax code affects the marijuana industry’s legal businesses.

420 College CEO, George Boyadjian, says, “It kind of cripples the business a lot. It prevents businesses from growing and reaching their full potential.”

After Prop 64 was passed, California state Treasurer John Chiang formed the Cannabis Banking Working Group. Since then, this group has been working hard on banking recommendations for the regulations scheduled to be released in 2018. The goal of this banking system is to get the most fiscally from the marijuana industry. Even so, the federal-state legality gap remains an issue, and will impact the effectiveness of this system.

“It’s not going to be a perfect pathway unless the federal government allows for this kind of activity and they take cannabis off Schedule I [status],” explains Chiang.

Many marijuana businesses continue to seek cash solutions and safe payment processing services through alternative lenders like Marijuana Merchant Account. Businesses can avoid operating in cash-only, and provide customers with multiple payment options. For merchants trying to safely and quickly pay bills, employees and taxes, this is great news. Rather than waiting for the federal government to reclassify marijuana (who knows when that might be), merchants can secure services now.


California Cities Unprepared for Legal Recreational Cannabis Sales Jan. 1

Marijuana Business FundingThe long-awaited day is right around the corner, but California is not as prepared as it should be for the start of recreational marijuana sales on January 1st. Both Los Angeles and San Francisco are struggling to put together local rules for cannabis shops and growers. The problem is that a delay in regulations could lead to limited options in many areas. This would be incredibly unfortunate, considering how many consumers are eager to ring in the new year with a legal cannabis purchase.

Thus far, California plans to treat marijuana like alcohol. Individuals 21 and older will be permitted to possess up to an ounce and grow six marijuana plants at home. On Jan. 1, the newly legalized recreational marijuana sales will be merged with the state’s medical marijuana market, which is experiencing stronger regulation. Recently published plans to regulate the two-decades-old medical marijuana market are the first since it was legalized.

This proposed plan details the standards for marijuana merchants that wish to be licensed by the state. The rules range from how late these cannabis shops can stay open to how much they will be allowed to sell each day. The final rules should be in place in time to start issuing licenses by January 1st – just in time for the rollout of legal recreational marijuana purchases.

While it sounds like things are moving steadily forward, there are some holes in the system. Specifically, how the cannabis will be moved from the field to distribution centers, on to testing labs and finally arriving at the retail shops themselves. The licenses to be issued in January are temporary, and plans have not been released on how the estimated $7 billion marketplace will be governed.

Obviously, a big problem considering the state is expecting to see as much as $1 billion in the first few years. Operators are concerned that this delay in nailing down the details could cause serious conflicts in various rules and laws to pop up down the road.

According to The Cannabist, “The state expects businesses that receive licenses will only work with others that hold them. But that has alarmed operators who wonder what will happen if their supplier, for instance, decides not to join the new legal market.”

Another huge obstacle for marijuana operators is that banks still refuse to work with them. Under federal law, marijuana remains very much illegal. As a result, these merchants have turned to alternative providers like Marijuana Merchant Account for their business funding and payment processing needs. Unlike their experience with a bank, merchants can secure the services they need with MMA in as little as 24 hours with minimal documentation requirements.

Meanwhile, Jan. 1 is fast approaching – ready or not. Cara Martinson of the California State Association of Counties recently admitted, “The bulk of folks probably are not going to be ready Jan. 1.”


Denver-Based Cannabis Company Debuts Airport PSA, Leave Pot at Home

MarijuanaA Denver-based company, Organa Brands, has created the first-ever public services announcement in airport terminals concerning cannabis. One of the largest legal cannabis brands in the country, Organa Brands premiered their ad campaign last month on branded trays at security checkpoints of a major airport in Southern California. The goal of this campaign is to remind passengers about the serious legal repercussions involved in taking cannabis aboard a plane. The PSA reads, “Cannabis is legal, traveling with it is not. Leave in California.”

These branded trays are the ones used for stashing shoes, cell phones, wallets and other personal items just before walking through security. For the next twelve months, the trays will appear at Ontario Airport (just outside Los Angeles, California), and are expected to generate around 15 million impressions.

Co-founder of Organa Brands, Jeremy Heidl, is very optimistic about this campaign. “Anytime we can normalize cannabis, I think it’s a good thing”, he says. “I’m still pinching myself a week into this. It’s just unbelievable to me that the TSA was able to sign off on this campaign.”

The timing of these new “Cannabis is Legal” ads directly relates to marijuana laws in California. After years of use under medical marijuana laws, recreational cannabis will also be legal in California starting January 1, 2018.

Heidl explained to The Points Guy, “We have long known that California is about to become the biggest recreational cannabis market in the world, and as [one of] the largest brands in the space, we feel a real responsibility to educate consumers. There’s obvious confusion surrounding cannabis laws — even the TSA at times has been confused as to these policies.”

It is easy to see why there might be some confusion. In most cases, TSA and airport security officials have done very little to inform the public on what is legal and what is not when it comes to bringing cannabis to the airport. In addition, the TSA is a federal agency; the government is still hostile towards marijuana. The Drug Enforcement Administration still categorizes marijuana as a Schedule I substance – just as dangerous as cocaine – with no accepted medical use. These ads are possible because, while the TSA draws the line at political ads, it does not regulate advertising messages that appear in the strays that go through X-ray machines. The hope is that Organa Brand’s ads will clear up the confusion shared by many states where pot is legal.

President and CEO of SecurityPoint Media, Joseph T. Ambrefe, Jr., says, “I think this is an example of a company with a good educational message to drive dialogue, and also educate travelers whether you’re a California resident or visiting the state.”

Is your business trying to prepare for the California recreational marijuana in the coming year? Consider partnering with an alternative lender like Marijuana Merchant Account. Business owners can quickly secure the business funding and payment processing solutions they need to smoothly and securely operate. Have a strong start to 2018 and seize the many opportunities the new year will bring.