Welcome to New York, Where Marijuana Merchants Are Left Without Business Funding

marijuana banksEven though New York has legalized medical marijuana sales and usage, merchants are still having issues finding a marijuana business funding source. While most of the major US banks are headquartered – or have offices – in NYC, they are turning down applications from these merchants, due to its stance in the Federal law. Banks are regulated by the Feds, and marijuana is still illegal in the Feds’ eyes, so it is only natural that the banks want to protect themselves. However, it is legal in NYC, and these merchants must have a way to process payments.

With the amount of controversy surrounding this issue, it would seem that NYC is snowed under with dispensaries. The fact is, there are only five. Yes, five legalized medical marijuana dispensaries. It seems as though five may not do much damage to a bank or processor, but you have to consider that the goods are not legal in the Feds eyes, and that one chargeback can send a company spinning. One of the licensees is the talks with a processing source, and another is positive that they will find a source. The ability to accept plastic card (i.e. debit and credit card) payments tremendously helps businesses, and medical marijuana businesses are not different. Besides the ease of payment acceptance, it is also safer. “Cash Only” businesses are targeted, and once they money is gone, it’s gone.

Medical marijuana merchants from the 30+ states in which it is legalized are also having issues finding a cooperative marijuana business funding source. From payment processing to business cash advances, it is tough finding anyone to deal with your business. Luckily, there are some available, such as MMA, who offer up service and expertise in the industry. Regardless of who you choose, you need to make sure that they are indeed experienced in the industry, because this industry is one of the fastest to change, due to ever-changing states laws. Dealing with the local government is tough enough, but many times these processors must deal with the Feds, as well. You need to make sure that your processor will not back down and dump your account when the government comes calling. This has happened, and it leaves the merchants, the patients, and the local economy is a mess.

Contact us for Marijuana Business Funding today!


The 5 Winning New York Companies Receive Their Medical Marijuana Licenses

Marijuana Merchant ProcessingIn July 2014, New York Gov. Andrew M. Cuomo signed the Compassionate Care Act which also authorized the marijuana outlets. The Health Department called the decision on the issued registrations a “rigorous and comprehensive” review on prospective purveyors of the drug. At the end of July, the New York State Health Department named the five organizations that would be permitted to grow and sell the drug for medical use in the state; this includes in New York City.

Even with strict rules and precise regulations that were announced this past spring, the bidding for these licenses were incredibly intense. Forty-three companies submitted their applications in the hope that they would be selected. However, five, and only five, lucky companies would receive licenses. After the selections were announced, State Senator Diane Savino reassured the losers by saying, “To those who did not make the cut, stick around. New York is a very big state”.

Now that the licenses have been issued, the organizations will be registered with the state. Each of them has plans to open four dispensaries statewide. According to the requirements of the licenses, the organizations must be doing business within six months. For those with conditions that are in need of medical marijuana, this means that medical marijuana could be on sale in New York as soon as the end of the year.

The winning companies now have the challenge of cultivating the marijuana. Keeping in mind the large pool of potential customers, dispensaries have been planned for New York City; this includes the Queens, Manhattan and the Bronx. Etain, one of the winning companies, plans to grow the drug in Chestertown and sell the end product in Kingston, Syracuse, Albany and Yonkers.

The other winning companies have also revealed their plans now that they have acquired their licenses. Bloomfield Industries plans to grow in Queens and dispense the product in Manhattan, Nassau County and two other upstate counties. Empire State Health Solutions has stated that its manufacturing facility will be located in Albany and its dispensaries will be in Albany County, Queens and two other locations. Illinois-based PharmaCannis – abbreviated name is PharmaCann – will grow its product in Hamptonburgh, located in Orange County. Its products will then be dispensed in the Hunts Point neighborhood of the Bronx as well as Syracuse, Buffalo and Albany.

Even with these great milestones for medical marijuana, businesses are still struggling to secure the payment processing they need from banks to ensure their business’ profitability. Obviously, operating as cash-only is not a great option. Marijuana payment solutions through alternative providers has really become an ideal option for many marijuana companies. Application approval is much faster than a traditional source and the process is hassle-free and simple.

For the entrepreneur, time is money. Marijuana payment solutions allow businesses to skip the waiting, offer their customers safe payment processing and operate their business in an efficient and profitable way. Until medical marijuana is recognized at the federal level, alternative providers will continue to prove to be invaluable.

Need payment solutions? Contact us today.