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.

After Colorado’s Legalization of Marijuana there are still more banking questions than answers

Posted on March 17, 2014 by admin

The new banking guidance issued by the federal government has left the cannabis industry with more questions than answers, thanks to federal laws that still state that marijuana is still illegal. Many in the industry hoped the memos, would open the floodgates for cannabis businesses to begin accessing traditional banking services.

However, there are some indications that the guidance might not have real implications. Many mainstream financial institutions and banking organizations said they would need to see concrete changes to marijuana’s federal classification under the Controlled Substances Act before they will work with the newly state-legalized industry. In addition, there are some in the industry who believe the guidance will help loosen the banking situation, while others are worried about a possible rise in fraudulent banking schemes.

In the days following the joint memos, major U.S. banks and banking institutions have upheld their refusal to work with the industry. Wells Fargo said the bank is reviewing the government’s new guidelines but would continue to ban cannabis businesses because, based on federal law, the sale of marijuana is still illegal. The American Banking Association stated similarly that cannabis businesses can still face federal prosecution and assorted sanctions.

Regardless, cannabis entrepreneurs should be extremely cautious of frauds and false banking opportunities during the coming weeks and months, as it is sure to run rapid. These companies probably will send the money to an offshore account, or into an aggregate account under the businesses’ name. Both banking practices are illegal, and should be reported to authorities if you are contacted by one. The best thing to do is to try to deal with a local, trusted, reputable bank when looking for loans and accounts.

While the monetary value of the legalization of marijuana is fantastic for Colorado, however federal banking laws may hinder business success. Business owners should be careful dealing with any type of financial institution, regardless of their business, but especially with business that are as risky as the legal marijuana business. When in doubt, stay with familiar banking names, and always make sure you are speaking to a banking manager when doing business.

Denver Joins Chorus Calling for Marijuana Banking Access

Posted on January 23, 2014 by admin

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

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

Apply for a Marijuana Merchant Account TODAY!

Unmanned Drone Deliveries; the Future for Marijuana Dispensaries?

Posted on January 7, 2014 by admin

Internet retail giant Amazon recently revealed that they are planning to use drones to deliver packages to premium “Amazon Prime” customers’ doorsteps. Within 5 years Amazon hopes to offer customers 30 minute delivery for items 5 pounds or less which comprises 86% of all their shipping orders. Amazon says they are on track to have their drone technology ready for operation as soon as the US Federal Aviation Administration regulates civilian use of drones in public air space. The next question then becomes is this a feasible option in the future for marijuana dispensaries? Delivering marijuana orders right to the customer’s doorstep?

Any owner and investor in a marijuana dispensary that has tried to open a merchant account is familiar with the complications regarding the marijuana industry’s tag as high risk. Banks are usually unwilling to open a merchant account for marijuana dispensaries due to legal risks as the federal government still considers marijuana a controlled substance regardless of state laws. However an August 29 memo from the Department of Justice (DOJ) promised to defer to state laws regarding marijuana dispensaries as long as they comply with federal objectives.

Drone usage for delivery will create a number of risky issues regarding the DOJ memo. The DOJ emphasized that dispensaries cannot distribute to minors, cannot deliver across state lines, and cannot be used as a front for trafficking drugs or other illegal activity. Doorstep delivery by drone does not guarantee that the package will go to its intended recipient. Should a minor, such as a neighbor or child member of the family, come across this package your business is at risk for a major violation of Federal law.

The second complication arises from the strict prohibition on delivering marijuana across state lines. Any drone-based delivery system would be confined to one state and one state alone. If your drone wanders over state lines or makes a delivery to a neighboring state you will once again be opening yourself to Federal prosecution. Finally, there is no system in place to ensure that drone delivered packages are delivering what they say they are. This could lead to Federal agencies raiding your business and drones to check that you are delivering what you indeed say you are, causing headaches and complications for your business to an already pricey delivery process.

Drone delivery may be the future for Amazon but for marijuana dispensaries it appears to be too risky. The potential conflicts with multiple initiatives of the Federal government will just invite more scrutiny and complications from the Federal level in an industry where any Federal activity regarding your business can be fatal. Drone delivery is just too risky in the present atmosphere regarding Federal versus state regulation for marijuana dispensaries, but maybe future legislation regarding the Marijuana industry will be more lenient. I guess we’ll have to wait and see what the future brings.

In the meantime, get set up with a Marijuana Merchant Account TODAY be clicking below

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Posted on November 15, 2013 by admin

How to get a Medical Marijuana Dispensary Merchant Account

Posted on November 8, 2013 by admin

According to ‘The Green Sheet’ the Department of Justice is backing away from regulations governing medical marijuana dispensaries. In a statement in August 2013 they stated that as long as they continue to follow the laws governed by the states, they would no longer harass them and close them down.

Twenty one states have legalized marijuana for medical purposes and sixteen states have legalized small amounts in possession. No one knows for certain how the laws will continue to change, but know, if you are on the lookout for a medical marijuana merchant account, now is as good a time as any.

Kayvan Khalatbari

Kayvan is a part owner in a medical marijuana dispensary and was still having difficulty in May of this year getting his merchant account approved. With the new statement released this fall, he should be taken off the TMF file, or black list, as it is affectionately called, and be able to get his new merchant account for whatever business he has open.

Go shopping

It’s a lot easier now. The government has backed off on the merchant account servicers as well. Their threats of shutting down the merchant account servicers, because of their association with the dispensaries has gone away, at least for the most part.

Go online and find merchant accounts that have a specific knowledge about marijuana dispensaries and their needs. They will be advertising such a notion, and your account will have a bigger pull with them, than any other. They are the one’s waiting for your business.

No longer

I wouldn’t pull those ATM’s off your lot, but know that you have another option with the merchant services. Now your customers can pay online, if you have a website. If not, you can process their debit and credit cards right there and having that ATM on site gives them one more option. If they need some extra cash for later, you have the ATM to process that request for them.

Wireless

If your business is in an area that you can get cell service, you have the option of processing payments from your smart phone. Many new pieces of technology have adjusted to the growing demand of payments on the fly. Hair stylists have opted to have their customers pay with the little ‘Square’ and its applications for adapting to their cell phones. A quick signature and the customer receives a receipt in their email, with all the pertinent information.

As an on the go type business, a dispensary can do the same thing. Processing customers as you find the right product for them without seeking out the cash register. On the spot payments speed up transactions and help the customer get on with their day without waiting in lines.

All in All

Look for the professionals that are seeking out your business. The medical marijuana merchant account will still be in the high risk category, but a few extra pennies to help with the production of sales, is a small price to pay for the convenience. Ask a lot of questions and know how that merchant account servicer feels about your account before you sign up. You want to feel comfortable about where your money is. Good luck with your merchant account.

The road is clearing up for marijuana dispensaries

Posted on November 8, 2013 by admin

After so many years of hiding in the corners and sneaking their product to cancer patients that suffered, the marijuana business is becoming a little more respected. As people suffer the effects of long recoveries and painful cancers, they are reaching out for something that makes life a little more bearable.

Some of the businesses have waded through all the bureaucratic red tape and have come out on the other side a lot stronger. Even merchant account servicers were terrified to be their money processor for fear that the Federal Government would take down their business because of their association with a Marijuana dispensary.

That was then

The Department of Justice has clarified that if the dispensaries are within the correct operating procedures and doing everything legally, to leave them alone. This will allow them to hunt for banking opportunities as well as merchant account servicers and have little to no fear for those institutions and reprisals by the government.

Opportunity knocks

Finding merchant account servicers that will process a marijuana merchant account is still far and few between, but they are out there. They are brave little merchant account servicers that have watched all the new laws being passed and are very aware of the risk. As long as the dispensary continues to follow the rules and, stays out of their own product, they will have a fine business to work.

On the go

Many dispensaries are on the go businesses, and technology has heard the cry for convenience. Look up all the card processor machines and find the one that works the best for you. From the Square on top of your cell phone to the top of an iPad, the correct answer is out there for the type of marijuana account you work.

High Risk

This is still a high risk business, and you will pay a little more for your merchant account. Don’t fret; the merchant account servicer will take good care of you, making sure that all your credit cards and debit transactions are safe and secure. You will be run through the Gateway that encrypts all transactions. As a customer of a merchant account servicer you also are protected from fraudulent transactions. Your fees might be a little more than you expect, but at least your options for payments have grown.

Now you know

History has taken some twists and turns with the little herb we call Marijuana. Now times have changed and people are relying on it for pain relief and suffering of cancer patients. It helps them eat and not suffer the consequences, and they can gain some weight back. It’s too late for some, but with the diligent work of others, many will not fall off the radar and make it through their treatments.

Look for a Marijuana merchant account servicer that can help you if you are in this type of business. As long as you are working through the rules vetted by the Government and on the right side of the fence, all should be good. Look for the right account and keep your nose clean. Good luck!

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.

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Category Archives: Uncategorized

Cannabis Production May Limit Inventories, Create Dispensary Shortages

Marijuana Properties are having a Hard Time Finding Financing in Colorado

After Colorado’s Legalization of Marijuana there are still more banking questions than answers

Denver Joins Chorus Calling for Marijuana Banking Access

Unmanned Drone Deliveries; the Future for Marijuana Dispensaries?

Spread the word…

How to get a Medical Marijuana Dispensary Merchant Account

The road is clearing up for marijuana dispensaries

Will my Marijuana Use Prevent Me From Getting Life Insurance?

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

Get Approved!