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.


2016’s Trends in the Marijuana Industry

unnamedWith more states heading into the legalized marijuana realm, trends are likely to change. Even if more states were not legalizing this valuable herb, trends would change for those in this ever-changing world. New consumers and new locales mean that different things will be in demand – as well as different types of technology. Below are a few prospective trends to watch for in 2016.

First off, new clients mean introducing a new variety of people to the legalized drug. While some would use marijuana, legal or not, others are interested in the new legal remedy for many ailments. From migraines to seizures to cancer, marijuana has medical benefits that many are willing to embrace. Marketing to both groups can help you gain customers, as well as not alienate those familiar with the industry. In addition, prices are likely to drop thanks to a supply overage. Yes, a massive supply of marijuana that is not being bought and used. That is our reality in 2016, and these lower prices can help attract customers – and keep them satisfied.

Edible goods are also projected to boom in 2016. While edible brownies and lollipops have been around for a few years, many in the culinary field are becoming creative with their marijuana-laced wears. From sauces and marinades, to cake frosting, and even gum flavorings, marijuana is everywhere, and it is becoming a hot item to market. However, you must be careful to keep these items away from the reach of children – and educate your customers to do the same.

Perhaps not a trend, but a very important business move, is the ability to process checks. A dispensary check processing account is in much demand, thanks to the small percentage of customers who pay with cash. Check writing is becoming a lost art for some, but for those who do it, the ability to accept their payment can keep them happy, and give you a new customer. This technology can be hard to find, but the search is well worth it, because it gives you a new avenue to customers.

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Marijuana May Bring Forth an Argument over Federal Preemption

Marijuana Leaves on Top of PlantsFor everything under the sun, if state and federal law contradict each other, the Feds win. However, new court cases are challenging this rule, and the cases involve marijuana. Legalized marijuana merchants have a tough time finding everything from funding to marijuana payment solutions, so state law typically helps these merchants. However, the banks are held close by the Feds, so you see why this is a problem. With preemption arguments about to open, will the marijuana industry set precedent for other types of conflict in the courts?

Preemption concerns the conflict of state and federal law if a “conflict” arises between the two. With marijuana, the conflict is state legalization and the federal illegal status. The status of preemption concerns the “conflict” issue, wanting a clear definition of what a conflict actually is. Many claim that there is no conflict; that the Feds want their way, and the state (i.e. the citizens of the states) have voted to amend the law. They claim that no conflict exists, so federal preemption should not occur, and state law should take precedent. Congress has expressly indicated that its intention in enacting the Controlled Substances Act was not to totally preempt all state drug laws. States have long enacted their own criminal laws relating to marijuana possession, so there is no conflict. Or, at least if there was conflict is should have brought up decades ago.

There should be something said for state citizens who have voted to legalized marijuana. Not all states have legalized it via a vote; the attempt failed in Georgia a few years ago, even though medical Cannabis Oil has been hot new as of late. With our upcoming Presidential election looming, and many wanting a “non-insider” politician, will this have any effect on the ruling on federal preemption? Probably not, since the courts will rule before November. However, it will be interesting to see the effect the entire process has on, well, everything. From consumers to merchants to banks, and even politicians, this ruling will have a major impact one way or another.

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Medical Marijuana Bill is Slowed Down in the U.S. Senate

Washington DC MarijuanaMany are disappointed in the amount of time it is taking to build support in the Senate for a medical marijuana bill. At the moment, it is not getting the backing it needs to advance before the August recess. While the bill has the support of influential Democratic senators, the bill needs more support from Republicans.

Two of these influential Democrats include senators Charles E. Schumer of New York and Barbara A. Mikulski of Maryland. The bill currently has two Republicans co-sponsors: Sens. Rand Paul of Kentucky and Dean Heller of Nevada. This bill would allow states to set their own medical marijuana policies by rescheduling marijuana.

Finding a third Republic senator has been extremely difficult. It would seem that any consideration in the Senate Judiciary Committee will be deferred until at least September. According to Sen. Rand Paul, while he admits that the process has been slow, he says that “we’re trying”.

So far, the bill is supported by sixteen senators. Cory Booker, D-N.J. and Kirsten Gillibrand, D-N.Y. are two of the original co-sponsors. More of the co-sponsors include: Barbara Boxer, D-Calif; Michael Bennet, D-Colo; Ron Wyden, D-Ore; Jeff Merkley, D-Ore; Tammy Baldwin, D-Wis; Brian Schatz, D-Hawaii; Tom Udall, D-N.M.; Martin Heinrich, D-N.M.; Angus King, I-Maine and Mazie K. Hirono, D-Hawaii.

While things have been slow in the Senate, progress has been moving a little faster elsewhere. Many senators have applauded the recent decisions that have been made by the Obama administration, which have been to deregulate medical marijuana research; thus, calling on more research.

In addition, Elizabeth Warren, D-Mass, is co-sponsoring a different bill that is sponsored by Jeff Merkley, D-Ore. This bill would allow legitimate marijuana businesses to use banks. Something marijuana businesses would rejoice over in light of how difficult it has been for these businesses to secure the funding and payment processing they need. At the moment, this bill is also stuck in committee.

Many feel that the fact that thousands of legal businesses are forced to operate on a cash-only basis is outrageous, since they do not have the support of traditional financial institutions. Because things are still moving so slowly, many businesses have turned to alternative sources of processing. Marijuana payment processing from providers like Marijuana Merchant Account (MMA), for example, has become the solution for many business’ processing needs.

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Legal or Not, Big Banks Say No to Big Cash From Marijuana

A lot of one hundred dollar bills in a bag isolated on whiteAfter a long time of legal battles to have medical marijuana legalized in the US, the nation has finally given a green light to have this business recognized. This means heavy cash in the hands of the people. When you have such volumes of cash, what do you do with it? Take to the banks. Interestingly the America’s big banks don’t want this cash.

Merchants of both medical marijuana and the recreational cannabis have been contending with a serious predicament. They have had to conduct their businesses almost entirely in cash. The reason for this being the fact that it is exceedingly hard for them to open and operate bank accounts. They can thus not accept and deal in credit cards.

The US Treasury Department through its financial-crimes arm is trying to make it easier for marijuana merchants to deposit this young industry’s growing revenue. The latest count approximated this revenue at around 3 billion dollars every year. All of it is almost entirely in cash. As a way to effectively tap taxes out of this revenue base, the government intends to use the country’s major financial organizations. This way it could keep the cash out of the way of organized crime.

There is a problem with the targeted banks though. Even though the government feels that their strong compliance departments are strategic and could help track this money, most federal bank regulators have so far remained silent on the subject.

This has created uncertainties regarding what is likely to happen to banks should they accept this cannabis cash.  The banking industry is therefore confused about what to do. On one hand there is quite a lot of prospect given the 23 free marijuana states together with the District of Columbia are flooded with hard cash awaiting banking services. On the other hand it is unclear what the regulators are holding up their sleeves.

Crucial decisions need to be made fast. Otherwise the marijuana merchants may have to consider only the alternative marijuana payment processing bodies to help them out with safeguarding the cash. In that case the government problem regarding taxation and how best to tap revenues from this industry remains unsolved.

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Banks Get Conflicting Message on Pot Funds

Marijuana and Dollar notesEveryone knows that the legalized marijuana business is a moneymaker. However, marijuana is still illegal in the federal government’s eyes, and they can make the moneymaking ability difficult. Even though three states have legalized recreational marijuana, and others have legalized medical marijuana, state law is often trumped by federal law. While the House of Representatives recently renewed a law that protect legalized medical marijuana merchants from searches, seizures, and overall harassment from the feds (and DEA), but this leaves out one important issue: the banking issue.

The federal government regulates the banks, which may lead merchants to believe that banks should not be allowed to accept funds from legalized marijuana merchants. However, the feds and banks are sending mixed signals. The biggest new line of business for America’s biggest banks is, in fact, the legalized marijuana industry. While many believe the industry to be cash-based, and in certain aspects, it is, many choose to find marijuana payment solutions, such as the options offered by MMA. This helps keep your accounts safe from fraud. For instance, if a fraudulent charge hits, your processor and bank can help figure it out. If you are a “cash only” business and are dealt fraudulent bills, there is nothing you can do about it. “Cash only” businesses are also risky, as they are often targets of robbery.

Banks are now required by the feds to file “suspicious activity reports” on each customer. While intrusive, this can help keep businesses safe, and categorized better. Typically, marijuana payment solutions and their clients are considered “high risk” to the banking industry. This new system can help keep customers, merchants, and the entire industry safe and in check. However, while this idea is floating around, many big banks are not biting yet. They find that the risk is too big, especially due to the fed’s ability to override any state laws regarding the legalization of marijuana in any form. The best thing for all legalized marijuana merchants is to make sure that their marijuana processing solution is educated and up-to-date with all information and changes regarding the industry.

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Top 5 Things to Avoid in the Marijuana Industry

medical marijuana payment processingOver the last few years, there has been a lot of chatter and legislation about the marijuana industry. As an increasing number of states have decriminalized marijuana, more companies that grow and distribute the drug have cropped up. But as with the growth of any legitimate enterprise, there has been an increase in the number of scams and amateur organizations that have given consumers misinformation about marijuana and have fleeced new marijuana enterprises.

Marijuana Real Estate Agent – Agencies locating commercial properties for marijuana growers has become a new niche. Unfortunately, very few realtors are to be trusted, nor do they know state and local laws relevant to commercial cannabis use. Sometimes realtors act as advocates for marijuana businesses, but their goal is really to gouge as much money out of cannabis tenants as possible.

Publicly Traded Companies – Beware of investing in publicly traded cannabis companies. Very few of these companies are profitable or clean. Do extensive research before handing over money to management companies.

Management Companies – Many marijuana merchants have a difficult time running their businesses because traditional financial institutions refuse to supply them with merchant accounts because of liability issues. As a result, some organizations become desperate and run their money through a management company to set up their bank account. This strategy is dangerous and criminal, as banks often eventually realize their accounts are fraudulent. This discovery can lead to federal charges of laundering.

Find the Right Representation – Do not hire criminal lawyers to be marijuana business lawyers. These are two completely distinct areas with different processes. One is settled in court and one is typically done in a business setting.

Be Wary of Regional Trademarking – Your brand is your most precious commodity and must be protected. Too many lawyers are claiming that your trademark will carry and be lawful in other states. This is not true. To be assured that you are protected anywhere, apply for a federal trademark for your marijuana products or a state trademark.

Don’t resort to tricks, illegal activity, or leave your business in the hands of amateurs or crooks. The experts at MMA can provide comprehensive marijuana business funding, account management and more. We have been helping legally operating marijuana merchants with payment processing for over 10 years.

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Legal Marijuana Industry Sheds Light on Its Long Illegality

Medical Marijuana Payment ProcessingMillions are locked up every year for drugs in the United States, and a big percentage of those are for marijuana possession, usage, or manufacturing. The rush of states to legalize pot have made many wonder what happens to those who were locked up before its legality. The green brings pleasure to many and cash to some, and while the Feds still outlaw it, the rapid legalization of states may soon turn the tide on what once was a promising war on drugs.

Legal or not, there will always be pot smokers. The states that have legalized marijuana for recreational use (such as Colorado), and the states that have turned possession into a simple ticket (New York) are setting the stage for the rest of the United States to bring leniency to the users to the drug. What separates marijuana from drugs such as ecstasy, cocaine, and heroin, is that marijuana is grown and dried, with the majority of the time no additives. No processing other than sunlight, and no kitchen chemicals. While the new legality in many places should affect the prison sentences of pot dealers, traffickers, and users, it more than likely will not. In the early 2000s, Congress passed laws to bring leniency to crack cocaine prison terms. This change did nothing to tens of thousands who were already incarcerated for the crime, and the same will probably happen with marijuana.

However, these new legalization’s make it a great time for a merchant to hop onto the medical marijuana bandwagon. Twenty-three states, plus Washington DC, have legalized medical marijuana, and others, such as Colorado and Georgia has legalized medicinal cannabis oils for certain chronic and terminal conditions. This is a rewarding industry, and it can be lucrative, as well. While rewarding and lucrative, it can be a pain in the neck to file a reputable medical marijuana payment processing account. Luckily, it can be done if you do your research. One of the top-rated over the last 10 years is MMA. Ten years is a long time in any business, and the knowledge of MMA’s staff can help you get the right foot in the door with the local governments to ensure your medical marijuana business is not only following the laws, but also following payment processing mandates, as well.

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