MARIJUANA BUSINESS OWNERS HAVING A HARD TIME CASHING IN

Marijuana

Marijuana business owners who are currently having a hard time banking their cash will have an even harder time; this is after Attorney General Jeff Sessions rescinded Obama’s Cole Memo which had been introduced to ease federal marijuana regulations.
Business owners are left confused on where to bank incoming cash.

Jeff’s legislation came days after adult marijuana use had approved, in theory, this should have encouraged banks to open accounts for cannabis businesses, but instead, it froze bank activities. These left businesses which were contemplating to support marijuana businesses in a dark state.

Robert McVay, a partner at Harris Bricken, said that Jeff’s legislation had come at the worst time, there was the time when banks willing to take more risk would have emerged. For those thinking to enter the industry would not have chosen the worst time.

Attorney General James Cole during the second term of Barack Obama’s presidency wrote memos giving out regulations to states allowing marijuana businesses to operate.
Providing banking services for cannabis businesses was risky this is because cannabis is still considered illegal by the federal government.

With the already growing marijuana industry, incoming cash will increase with nowhere to put it. According to a state database 675 temporally licenses got issued to retail dispensaries, food production businesses and grow operations.

A study carried out by the researchers at the University of California Davis Agricultural issue center shows that the approval of adult marijuana use will add approximately $5 billion to the market. Currently, it is estimated to be about $2.7 billion.

Head researcher at the UC Davis, Jonathan Barker said this would be due to the redistribution of revenue between the black market and medical marijuana.
The new market would undoubtedly attract individuals who neither wanted prescribed nor illegal marijuana.

Business owners selling legal weed will have to come up with ways to cope with the non-existing banking services. Adjacent financial co-operations have opened up offering alternative banking services for cannabis businesses.
CanPay being one of the known adjacent financial services offers an app with debit banking.

At CanPay’s core are banks which allow cannabis business owners to cash in using their names, sometime CanPay also connects dispensaries to banking services.
CanPay’s model relies mostly on the Cole Memo, but since Sessions’ law, some banks stopped offering their services.

Dustin Eide CEO of CanPay said his business would lose a lot should banks decide the risk too significant to take, Eide is more worried about building new partnerships to tackle California’s cash problem than he is of losing the existing ones.

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