And while there is a bill on the floor to legalize at a federal level, it’s stalled out at the moment.

As such, it is nearly impossible for federal financial institutions to give loans to cannabis entrepreneurs. So how do you fund your cannabis business if you’re not currently wealthy or well-connected?

Three Ways to Fund Your Cannabis Business

There are ALWAYS ways (insert sinister music here). Suffice it to say, we’ll only cover three completely legal methods here.

1. Personal Loans

If you have friends or family members that are well hooked up and believe in your vision, this could be a solid route. It’s important that you procure the employ of a law firm though so you can create a legally binding contract that holds everyone accountable. Otherwise, those family gatherings could get ugly (or uglier, as it were).

You could also apply for a personal loan free of family and friends through a lending institute. This is only viable if you have a solid credit score and you provide full disclosure to the lender of your intention for the funds.

2. Crowdfunding

Here in 2021, crowdfunding is one of the more innovative ways to get funding for a cannabis business. You could even say it’s trending. We won’t though.

With crowdfunding, an array of folks give you a small amount of money to fund your business. You’re not required to give away equity in return. And you don’t have to return the money they invest – though it helps to offer free products, “merch”, and other special services.

Cannabis-specific crowdfunding platforms are a great place to start. These sites gather great minds in the hemp and cannabis industries who are hungry to help new cannabis business entrepreneurs.

3. Investors

Seeking investors is still a tried and true method to fund your cannabis business. Especially these days with cannabis industry growth soaring. Investors are eager to get involved.

If you’ve got a solid business plan in place, take advantage of cannabis-related events to meet investors and prove your savvy. If staying home is more your jam these days (and we DO understand), you can find groups on platforms like LinkedIn and Facebook loaded with potential investors.

These investors may be extremely wealthy venture capitalists who provide capital in exchange for equity. Or they may be angel investors who have less to invest, but act more as silent partners who will help you get your business started.

Then there is a potential fourth option…

Wait for the SAFE Banking Act to Pass

There are recent legislative developments suggesting that the antiquated policy of prohibiting financial institutions from lending to cannabis ventures could be going the way of the dinosaurs.

In June, the U.S. House of Representatives overwhelmingly (by a margin of 321-101) passed a bill that would no longer prohibit federal banking regulators from penalizing institutions that provide banking services to legitimate cannabis businesses.

Known as the Secure and Fair Enforcement (SAFE) Banking Act, it also aims to reduce the riskiness of running a cannabis business. Because there is a lack of credit cards, loans, and deposit accounts, everything must be done in cash. And this has made the industry a target for more violent crimes.

As such, the U.S. has fallen behind Canada and Mexico in production and innovation in the cannabis industry. There is a clear need for fair and secure financing within the industry.

The potential of the SAFE Banking Act is promising. Yet it still needs to be ratified by the more conservative (though now Democrat majority) Senate later this year. And even if if it does pass, you’re looking at least a year or two before the bill moves forward.

Still, it might be worth the wait.

Eager to Start a Cannabis Business?

As tough as it can be to get the capital to fund your cannabis business, it is a thriving industry that currently promises only growth.

Be sure that a strong cannabis marketing strategy is part of your business plan though.

Contact us today to see how we can put our years of experience and expertise as cannabis marketing specialists to work for you. It could make all the difference.

The post Three Ways to Fund Your Cannabis Business appeared first on GROW Cannabis Marketing.

We could also say that more than a few Americans are doing a fine job of that all by themselves. But that’s a topic for another time.

At any rate, the Secure and Fair Enforcement (SAFE) Banking Act is a bill that was six years in the making. It was endorsed by 50 state banking associations and the National Association of State Treasurers, as well as the top financial regulators of 25 states. (If you’re keeping track, that’s HALF the states.)

Plus, a majority of state attorneys general and bipartisan governors of 20 states also endorsed it.

That might be why 291 Democrats and 91 Republicans in the House came together in bipartisan agreement to pass it last week. And by a landslide.

Yes, Bipartisan Agreement!

We could use a lot more of that.

And if the Act passes in the more conservative Senate, it will be easier for marijuana companies to open checking accounts and get business loans.

Essentially, this juicy piece of legislation would protect banks and other financial institutions that service state-legal marijuana businesses from being penalized by federal regulators.

Plus, the entire market will be safer since companies forced to operate on a cash-only basis won’t have to keep stock piles of cash at their place of business.

So this feels like a good thing. And as we mentioned in our most previous post, that’s how (for the most part) we see it.

But there are those who disagree. And they’re allowed. Afterall, this is America.

So they’re certainly entitled to believe that these esteemed members of Congress have endorsed a bill that would “help legitimize a business that’s destroying and endangering lives.”

And it’s okay if prohibitionists oppose the legislation because they feel the SAFE Banking Act is a gateway (if you will) to federally legalizing marijuana.

In the land of the free, it’s totally kosher to Tweet that in states where pot is allowed, there are more arrests, hospital visits, suicides, crime, DUIs, and work-related problems. DESPITE the fact that research says the opposite.

Apparently, free speech allows for fake news. And speaking of fake news…

Enter Tucker Carlson

Earlier this week, Carlson dedicated part of his show to demonstrate just how crooked these lawmakers are. According to him, this act is an attempt to make the American population indifferent to the many shortcomings of Congress.

The man with two last names believes that a bill aimed at protecting banks who service marijuana businesses will invariably lead to every American becoming a a hardcore stoner incapable of publicly scrutinizing what’s happening in the government.

Pretty crafty of them, huh? It’s a truly brilliant and diabolical plan!

It’s all too clear that Congress is dropping the ball on issues like immigration and repairing the infrastructure. We can’t have that. SOOOOO, they decided to come together on this banking issue so that all Americans can just get high instead. They’ll be so busy singing Kumbaya, they won’t notice .

“When you mismanage the country this badly, you want the people to be so out of it they don’t respond,” he said. “That is really true. They want you to be dumb.” How ironic, given he’s one of the most well-known pundits for a network that bases its success largely on this sort of thinking.

It’ll be interesting to see what his new theory is should the Senate not pass it. But honestly, we won’t be watching his show.

The SAFE Banking Act Is a Sign of Progress

As far as we’re concerned, the SAFE Banking Act is a move in the right direction.

Whether it passes in the Senate remains to be seen. But at least there are some Republican members in the House who are opening their eyes to the many benefits of cannabis.

We can only hope that others eventually awaken.

In the meantime, keep checking back with our blog to stay up-to-date on the latest in cannabis industry news.

The post Is the SAFE Banking Act Conspiring to Make Americans Stupid? appeared first on GROW Cannabis Marketing.

Although 103 representatives in the House opposed it, an overwhelming 321 supported passing the act. It was a red-letter day witnessing such strong bipartisan support.

Of course, it’s difficult to say how it will fare in the more conservative Senate.

And, as with most things in life, the passing of the act in the House is not all wine and roses either.

How SAFE Threatens MORE

Critics of the act aren’t all conservative Republicans terrified of “hemp’s illicit cousin” (Mitch McConnell’s words, not ours) and its Schedule 1 status.

Some critics of the act include the Drug Policy Alliance (DPA), who are concerned that SAFE will take the focus off the long fought for Marijuana Opportunity Reinvestment and Expungement Act (MORE).

In fact, there’s a legitimate fear that the way the act is currently written will not only maintain, but potentially create even more inequity in the industry.

They don’t want to see momentum on marijuana reform stall out and had hoped for a more comprehensive bill that prioritized equity and justice for the communities who have suffered the most under prohibition.

So now the biggest hope is that the major reform legislation that was introduced by House Democrats in July that aims to reschedule cannabis and expunge past marijuana convictions will not become an afterthought.

So What Is the SAFE Banking Act?

You know how when you run a business and you need financial help, you can just zip on over to the bank or some other financial institution and if everything is kosher, they’ll help you out?

Not so with a cannabis business. This is among one of the many challenges of running this sort of business.

Because, archaic as it is, marijuana is still sitting cozily alongside cocaine and heroin as a Schedule 1 drug. And that means that financial institutions and other businesses that provide loans, capital, investments, or other financial services to cannabis businesses would not be protected by the Federal government.

The SAFE Banking Act would offer them protections.

And get this. The measure also protects companies that service cannabis businesses – such as plumbers and electricians. Currently, these non-cannabis companies are frequently penalized by banks for working with them.

Furthermore, because cannabis facilities often possess large amounts of cash that they aren’t permitted to keep in a bank, they are targets for criminal activity. The act, by proxy, would protect the actual cannabis companies and the neighborhoods that surround them.

Advocates See It As a Victory

Despite the fact that some House Republicans who voted against the measure have expressed concern the bill will actually give criminals and cartels easier access to these financial institutions, 91 House Republicans supported it.

This represents the first time in history that a House supermajority voted to ease federal cannabis enforcement. A milestone, to be sure.

So maybe the tides are turning. It’s just really difficult to know what’s going on in the federal government anymore these days.

The Senate is pretty busy right now taking care of year-end appropriations bills that have to be passed in order to avoid a government shutdown. And whether Mitch McConnell will move to bring the bill to a vote at all re-mains to be seen.

It’s anyone’s guess.

Do You Own a Cannabis Business?

If so, you more than likely see the passing of the SAFE Banking Act as a victory.

And we celebrate anything that helps cannabis businesses succeed. That’s why we specialize in cannabis marketing and public relations.

Contact us today to find out how we can contribute to the success of YOUR business.

The post SAFE Banking Act Passed by House appeared first on GROW Cannabis Marketing.

No?

Well, if you’re wondering, just ask the owners of dispensaries who must routinely engage in this activity because banks won’t work with them for fear of repercussions.

Hence the Safe and Fair Enforcement Banking Act – i.e. the SAFE Banking Act.

Filed last Thursday and led by Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-O) and Warren Davidson (R-OH), this bipartisan bill aims to protect financial institutions from being penalized by federal regulators for servicing marijuana-related businesses.

The bill was initially introduced in 2017, but didn’t garner legislation. So Perlmutter decided it was high time to reintroduce the bill so that cannabis businesses can at long last access the banking system.

“Congress needs to act to reduce risks for employees, businesses & communities across the country,” he says.

And he’s right.

The Current Challenges

Medical marijuana is legal in most states in the U.S. Even so, its status as a dangerous Schedule 1 drug under the Controlled Substances Act makes it illegal under federal law.

Thus, in the (decidedly cloudy) eyes of the federal government, selling marijuana is at par with dealing heroin or other dangerous narcotics.

Banks that step up to service legal cannabis operators are required to file a suspicious activity report for every transaction made with the business. And these rules stretch out to every company the marijuana operators interacts with – creating mountains of red tape and mounting expenses that are simply too much of a pain in the ass for most banks.

And the banks that ARE willing to help them out have to recoup all those costs by applying exorbitant fees. Plus, they’re still putting themselves at serious risk of criminal prosecution.

On what charges, you ask?  Aiding and abetting a federal crime and money laundering.

As a result, many commercial operators are forced to conduct most business with cash. Not only does this stir serious security concerns, but also creates a lack of funding to scale these businesses.

High-Fiving Our Neighbors to the North

Along with the mess above, these banking restrictions mean that cannabis firms can’t list on NYSE or NASDAQ until federal prohibition ends.

So they’re looking north to the Canadian Securities Exchange.

In other words, this arcane act of prohibition is setting up Canadian investors to get rich from the success of the U.S. cannabis market. In fact, finance firms there are already setting up options contracts so they can buy shares in cannabis firms once prohibition ends here.

Do marijuana opponents in D.C. really want to keep squelching growth of one of the fastest-growing industries in the U.S. – subsequently handing over control of that sector to our neighbors to the north?

That seems unlikely. But without sensible banking laws in place, that’s exactly what’s going to keep happening.

The SAFE Banking Act Makes Perfect Sense

Even though the prior version of the SAFE Banking Act didn’t advance to votes in the last Congress, folks are optimistic about its prospects this time.

And it truly is bipartisan. Somewhat, at least.

Of the 108 members who have signed onto the bill as initial cosponsors, nine of them are Republicans.

If the bill passes legislation, proceeds from transactions conducted by marijuana companies would no longer be considered the result of unlawful activity.

“If Congress fails to act, we are discouraging responsible, regulated markets and allowing a serious public safety threat to go unaddressed,” says Heck. In last month’s hearing before a House financial subcommittee, he added that the body has the power “to prevent murders and armed robberies,” referring to the dangers these businesses face being forced to operate on a cash-only basis.

Furthermore, it’s time to look at the civil liberties issue of deeming cannabis business owners as having certain reputational risks that other businesses don’t. Because the reality is, every small business face challenges.

And barring legally recognized small businesses from financial institutions available to every other business is a threat to the liberty and freedom upon which the country was supposedly founded.

It feels like a big step backward.

Improving Transparency and Public Safety

In a nutshell, that’s what the SAFE Banking Act really aims to do.

It’s not a call out for everyone to condone marijuana businesses. It’s simply a request to create an auditable trail, while keeping neighborhoods safe.

And it’s a request we hope Congress will honor.

In the mean time, if you’re a cannabis business owner, decrease the challenges of running your business by ensuring your marketing strategy is up to snuff. Contact us today to see how we can help.

The post The SAFE Banking Act Offers New Hope to Cannabis Businesses appeared first on GROW Cannabis Marketing.