Report: More Banks Providing Services To Cannabis-Specific Businesses

DISTRICT OF COLUMBIA: A growing number of banks and credit unions are providing financial services to marijuana-related businesses, according to data released by FinCEN (the US Treasury Department’s Financial Crimes Enforcement Network) and first publicized by the news portal MarijuanaMoment.net.

The report acknowledged that the number of financial institutions actively banking with marijuana-related businesses rose from 401 in October 2017 to 486 in September 2018.

Although the federal classification of cannabis as a schedule I prohibited substance discourages banks from cooperating with state-licensed cannabis businesses, a 2014 US Treasury Department memo provided guidance to financial institutions wishing to transact with the marijuana industry. However, that memo was rescinded by the Justice Department earlier this year.


For more information, contact Justin Strekal, NORML Political Director, at (202) 483-5500.

 

Cannabis Trends To Watch In 2018

By Kathy T. Cooley

Enthusiasm for Cannabis has grown exponentially in recent years, from the legalization of it as a recreational drug in California and Maine to its potential for medicinal use. While medical research is scant on exactly what marijuana can do, the tides are set to change rapidly for the popular plant as the market warms up to its potential. The cannabis trends in 2017 may have included the creation of a variety of different products, from extracts to concentrates, and its decriminalization in New Hampshire, but what does the future hold for the newly booming industry?

According to a report from Arcview Market Research, the number of marijuana sales in North America grew to $6.7 billion in 2017, representing a 30% increase from the previous year. Amazingly enough, this growth is expected to continue since there’s more in store for cannabis in the coming year. With celebrity strains set to become more popular and the branding of CBD oil and cannabis as solutions for body ailments, the sky is the limit when it comes to the substance.

From trendy chocolates that contain CBD oil to more funding for the medical use of cannabis, here are some of the marijuana-related things you might see in 2018.

Increased Funding for Medicinal Research

lab beakers

Amy. Bio Lab. 2010. Flickr.com. Web. Nov 22. 2017. 

The Cannabis Indica and Cannabis Sativa plant varieties have been used for a number of years to help those undergoing chemotherapy deal with the treatment’s side effects. However, due to cannabis’s classification as a Schedule 1 drug, which can be prone to abuse, it’s been difficult for marijuana to be studied for its medical potential. Fortunately, as time goes on and the legality around the drug changes, so will our knowledge of its true medical potential. According to a report by Salar Media Group and Civilized, “The trend here is that cannabis is now being treated as a medicine with specific benefits and applications to specific diseases. This research will only continue to expand in the years ahead.” With medical marijuana in greater demand than the stuff used for recreational purposes, there’s too much possibility to be ignored.

The Branding of Cannabis 

Farmer Tom Honest Cannabis

Farmer Tom Honest Cannabis

Small batches have become popular for everything from craft beer to jam to coffee, but as cannabis continues to enjoy its more prominent reputation, there’s going to be a lot more market appeal for unique, sought-after strains. While there are sure to be some celebrity brands that appear in the coming years, big brands will likely stay away from the product until it has mass appeal, leaving the door open for marijuana-specific brands like Diego Pellicer, Toast and Recreator. While this economic boost will create a lot of expensive marijuana options that are unique in strain and luxurious in style, with so many producers there will still be options for every pocketbook. 

The Success in CBD Oil

Cannabidiol is the part of the cannabis plant that doesn’t cause the familiar effects associated with marijuana use; as a result, it’s often used in medical marijuana to treat pain or the symptoms associated with chemotherapy. Fortunately, with the ever-changing marijuana map and the bump in research of marijuana as medicine, the CBD oil industry is set to see a huge boost in profits over the next few years. Hemp Business Journal estimates a growth of $2.1 billion in sales by 2020, a figure that represents a 700% increase in sales from 2017. Not only that, consuming CBD oil in some of your favorite products will also be more common. Sakara Life, a Gwyneth Paltrow approved brand, is now producing delectable CBD chocolates, made with cacao butter, coconut sugar and CBD oil.

Marketing the Marijuana Seeds

image3

“thöR. seedz. 2010. Flickr.com. Web. Nov 22. 2017. 

While CBD oil is projected to make itself known on the marketplace in the short term, one can also make a bet that marijuana seeds will be showing up in a variety of other marketable products. Given the low concentration of THC (the compound that provides the familiar high) in marijuana seeds, they should be showing up in a few more corners of the world, from beauty products to well-known food items and CBD water. With the sales for a company like Medical Marijuana Inc. at approximately $8 million in 2016, a figure that has more than doubled from $3.4 million in 2013, the market is changing rapidly. With the falling prices of cannabis and marijuana seeds, this product is set to be more economical and readily available than ever before.

Delivery, Anyone?

Nurse Nancy on call 24/7

A Ring Brings Marijuana

Options for marijuana use may be more attainable than ever before with producers popping up all over the place, but alongside this newfound prominence you can also look forward to getting your pot like you would your pizza! The cannabis delivery company Eaze just recently received $27 million in funding to become a home delivery service that caters to all your cannabis needs. And not far behind them, other companies like Buddha Blossoms and Kind Courier are also following the potential for this up-and-coming delivery service. With Oregon and Alaska already set to allow the delivery of recreational marijuana, more states will likely follow suit in the coming year, with the delivery start-ups right behind them.

 

 

 

Largest U.S. Banks Host Accounts for Marijuana Businesses, Says American Banker

FLORIDA: A recent study commissioned by industry journal American Banker reveals that the nation’s four largest banks have opened accounts for pot shops and marijuana-related businesses. Conducted by MRB Monitor, a firm that helps financial institutions identify the risks associated with the marijuana industry, the study examined public records in the state of Massachusetts and found that 34 percent of businesses that filed to operate medical marijuana dispensaries in Massachusetts between June 2015 and September 2016 had one or more accounts at Bank of America, Citigroup, Wells Fargo, or JPMorgan Chase.

If a similar pattern of working with the marijuana industry takes hold in Washington D.C. and the U.S. states that have legalized marijuana, the prospect of financial services for cannabis outfits may not be as dire as it at first appears.

Bank of America seems to have been the most accommodating. Over half of the marijuana businesses included in the survey had accounts at the bank, though it previously told the Statesman Journal that, “As a federally regulated financial institution, we abide by federal law and do not bank marijuana-related businesses.”

Guidelines issued by federal authorities in 2014 appeared to have offered financial institutions a legal avenue to provide their services to marijuana-related businesses (MRBs). Back then, the Financial Crimes Enforcement Network (FinCEN), part of the U.S. Treasury Department, provided guidance[3] it said was meant to enhance the availability of financial services for, and the financial transparency of, marijuana-related businesses.

Yet, under the Controlled Substances Act (CSA), it is illegal to manufacture, distribute, or dispense marijuana, and marijuana – like heroin, LSD and ecstasy – remains a Schedule 1 substance under the statute.

In December 2016, U.S. Senator Elizabeth Warren, D-Mass, a member of the Senate Banking Committee, along with nine other senators sent a letter to FinCEN requesting guidance on how banking services might be offered to ‘indirect businesses’ that provide services to the state-sanctioned marijuana industry.

Hopefully, after nomination season comes to a close, a response to that letter will be forthcoming; there’s a lot at stake. As ArcView Market Research wrote, “Cannabis is arguably the fastest growing industry in the world. Regulated marijuana sales in North America totaled $6.9 billion in 2016, a 30 percent increase from 2015. Sales are projected to increase to $21.6 billion by the year 2021 representing a 26 percent compound annual growth rate.”

CannaScore Wins Banking Appeal – Has Account Fully Restored

COLORADO: CannaScore announced it is has been successful in its appeal, and its banking privileges have been restored. As reported here on MJ News Network last month, the company had certain banking privileges revoked when its financial services provider discovered the company was providing services to the marijuana industry. During the appeal, the company offered its products free of charge.

“Although we have full banking access again, we are still giving all customers a free trial of our award-winning cloud-based software,” said Thomas Smith, Managing Partner.

The CannaScore system audits compliance with a wide range of regulations governing the cannabis industry, including licensing, security, personnel safety, food handling, pesticides, and chemical exposure.

Legal cannabis growers, producer/processors, and retailers can use the system to identify areas of non-compliance before problems occur, and provide assurance that they are adhering to the myriad of state and local regulations. Failure to comply with regulations can often result in fines, shutdowns, license revocation and even prison.

Additionally, banks, insurance firms, accountants and real estate developers can use CannaScore as a tool to ensure that their clients operating in the cannabis sector are in compliance as mandated in the Cole Memo and finCEN Guidance.

CannaScore is easy to use, and quickly analyzes compliance that exceeds state parameters. The system also produces a score, which is useful for anyone in the cannabis industry, including consumers, to quickly evaluate the quality of an organization.

“Companies that score high may be more likely to attract funding, obtain favorable rates, demonstrate reliability to landlords, and even attract new customers,” Smith said.

Got Bank? Election Could Ereate Flood Of Marijuana Cash With No Place To Go

By Lisa Lambert

Although the sale of marijuana is a federal crime, the number of U.S. banks working with pot businesses, now sanctioned in many states, is growing, up 45 percent in the last year alone.

Still, marijuana merchants say there are not nearly enough banks willing to take their cash. So many dispensaries resort to stashing cash in storage units, back offices and armored vans.

Proponents believe the Nov. 8 election could tip the balance in favor of liberalizing federal marijuana laws, a move seen as key to getting risk-averse banks off the sidelines.

Measures on ballots in California, Florida and seven other states would bring to 34 the number of states sanctioning pot for medical or recreational use, or both. That could push annual sales, by one estimate, to $23 billion.

The prospect for a market of such scale is adding urgency to calls for a national approach to marijuana that expands banking options. Law enforcement and Federal Reserve officials have expressed concern about the fraud and crime associated with un-bankable cash.

Nearly 600 dispensary robberies have been reported in Denver since recreational pot was legalized in Colorado three years ago.

“There’s not a single human being who thinks there is any benefit at all in forcing marijuana business to be conducted on an all-cash basis,” said Rep. Earl Blumenauer, a Democrat from Oregon who has called for the decriminalization of marijuana since coming to Congress in 1996.

 

CannaScore Offers Free Compliance Auditing Tool After Bank Revoked Its Credit Card Processing Privileges

COLORADO: CS Compliance Systems, developers of CannaScore – the world’s first real-time regulatory compliance auditing application for the cannabis industry, announced that its credit card processing privileges were revoked after their bank realized that CannaScore was providing services to the marijuana industry. In response, the company announced that it is now offering its products free of charge, on a limited basis.

“It is absurd that we had our credit card processing revoked,” said Thomas Smith, Managing Partner of CS Compliance Systems. “CannaScore is a software application that helps cannabis businesses stay compliant with the complex web of regulations that govern this sector. Ironically, some of our biggest customers are banks, because they like to use our auditing tools to give them assurance that their cannabis-based business customers are following all regulations.”

After the company had its credit card processing revoked, management decided to offer the award winning product suite at no cost, for a limited time. Cannabis growers, producer processors, dispensaries, retailers, extract and edible manufacturers, along with those that do business in the marijuana sector, including insurance companies, landlords, and yes, banks, can now visit the CannaScore website and use the system for no charge.

“Our team comes from within the compliance and cannabis industries,” Smith said. “We are not Wall Street outsiders. We are a team of dedicated professionals that knows this industry inside-out, and has developed an innovative program designed to protect cannabis-businesses,” he added. “Now we share some of the same challenges with banking that our customers face on a daily basis.”

To take advantage of the free use of the CannaScore system, log on to www.cannascore.net and follow the link to “Free Trial.”

Banking On The Marijuana Industry?

OREGON: It is legal to sell marijuana in 23 states. But pot businesses can’t deposit their money in banks because of federal banking laws. While the dilemma has been a back-burner issue in Congress for several years, a solution may be in the works.

A provision in the upcoming financial services spending bill would prevent the federal government from spending money on penalizing financial institutions that accept legal marijuana businesses as clients. That would greatly reduce the ability of federal agencies’ to prosecute the banks.

Increased access to banking would, in turn, decrease the currently cash-only businesses’ risk of robbery by allowing customers to pay with debit and credit cards, reduce the likelihood that the business could be used as a money-laundering front and solve the nightmare of trying to pay taxes with cash

“Forcing businessmen and businesswomen who are operating legally under Oregon state law to shuttle around gym bags full of cash is an invitation to crime and malfeasance,” said Sen. Jeff Merkley, D-Ore. “It’s time to let banks serve these legal businesses without fearing devastating reprisals from the federal government.”

Pot Risk Vs. Profit: Bankers Cautious Of Marijuana Dispensaries

COLORADO: Every month, Jamie Perino hires a security detail to come to her three recreational marijuana dispensaries. They stop by, collect thousands of dollars in cash and head out to deliver the money to the state, county and city.

Perino, the CEO of Euflora dispensaries, said she can’t find a bank that will work with her. She pays her employees and her landlord in cash. She can only accept cash from customers. She must even pay her taxes in cash.

“I can’t bank my money,” she said. “It’s really frustrating. … When I go to pay my federal taxes, you get a 10 percent penalty for paying in cash, but we can’t have a bank account. So it’s just a big Catch-22.”

I-502 Compliant Banking & Merchant Services Is Monday, June 29th In Bellevue, WA

WASHINGTON: If you have anything to do with banking or merchant services for Washington’s legal cannabis industry, you’ll want to make sure to attend the Marijuana Business Association’s Professional Education Seminar on I-502 Compliant Banking & Merchant ServicesMonday, June 29th, 2015 1:00-4:30PM a the Red Lion Hotel, 11211 Main St. Bellevue, WA 98004. Featuring an impressive lineup of the state’s leading authorities on cannabis industry banking and finances, the event was organized by the MJBA at the behest of state’s I-502 Licensees and applicant, MJBA members and other cannabis industry service providers. The half day seminar will feature presentations and panel participation from:

  • Washington State Department of Financial Institutions Director of Banking, Rick Riccobono;
  • Timberland Bank COO, Jonathan Fischer
  • Washington Liquor and Cannabis Board CFO, Mike Kashmar
  • Legal Officer at Foundry Law Group and I-502 Retail Licensee Myles Kahn
  • PayQwick CEO Ken Berke and CFO Keith Marks
  • President & Executive Director of the Community Bankers of Washington, Mark MacDonald
  • Moderation, David Rheins, Executive Director of the Marijuana Business Association

Foundry Law Group will sponsor a post-event reception at the hotel bar at the conclusion of the seminar.

How Would Lifting Of Federal Medical Marijuana Ban Affect Massachusetts?

MASSACHUSETTS:  For Robert Mayerson, chief executive officer of Patriot Care Corporation, a medical marijuana company, the basics of setting up a business were not always easy.

“The ability to take credit cards, to bank, is challenging,” Mayerson said. Mayerson said some landlords are hesitant to lease space to dispensaries out of concern that the bank holding their mortgage would disallow the lease. He would not reveal what banks his company used.

Patriot Care Corporation has received provisional state approval to open medical marijuana dispensaries in Greenfield, Lowell and Boston, one of about a dozen medical marijuana companies currently moving through the state’s licensing process. Banking for these companies is one area that is complicated by the conflict between state and federal laws. While Massachusetts voters voted in 2012 to allow medical marijuana, and the first dispensaries are now preparing to open, all forms of marijuana remain illegal under U.S. law.