The largest necessity to start up companies is proper funding in order to succeed in their own markets. If you decide to open a restaurant or clothing store, you might decide to go to a traditional bank to get a loan. This process fully changes if you decide to start up a hopefully successful marijuana business. Due to the risky legislation between federal and state governments, banks cannot simply loan money to marijuana-related businesses. Recently, a few banks and credit unions have been able to offer merchant services including; deposits, lines of credits, credit card processing, and in some cases, loans. Several other non-institutional investors and venture capitalists have been able to take advantage and get ahead in the market.
Banks are usually not inclined to give loans to marijuana ventures despite the potential profits which has a lot to do with the Federal Deposit Insurance Corporation (FDIC). The FDIC cannot insure money that has existential risks, such as money that comes from a federally illegal source. Some banks have decided to invest in marijuana ventures that do not touch the physical plant such as manufacturers of growing materials, lobbying groups and so on.
This has left a market for individual investors to take up the slack left by banks. These include private investors, private equity funds, angel investors, marijuana business consultants, and private high-interest loaning individuals.
The other need for marijuana companies need a way to deposit money, write/cash checks and pay their employees as well as suppliers. Another big issue is security. This has made a black market-esque area where owners of marijuana businesses use banks individually. To avoid getting caught with the source of the money, they will spray it with air fresheners and even go as far as making fake businesses to cover it up.
Because of this, as soon as marijuana becomes federally legal, banks will hopefully see millions flood in in revenue as the large market for legal marijuana is already in the billions.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
