The cannabis industry has been booming for several years now, given the lax regulation on the state level throughout many parts of the U.S. because of the boom in the market, many companies have sprung out of the woodworks to come take advantage of this new and growing industry.
One example of this comes from Amanda Ostrowitz. Amanda worked for the Federal Reserve of Kansas City before founding her own marijuana company. A few years back, Ostrowitz decided to leave the banking industry to found a marijuana-legal research firm known as CannaRegs. In only a few short years, her business had developed into a multi-million dollar company, looked at by some of the largest publicly traded cannabis corporations out there. Amanda recently was interviewed to discuss some of the challenges that one might face when getting into this industry. She stated that “I say if I go a week and nothing new (or no new problem) hits, then I must not have done anything that week. Anything you think, as a regular business person, would take you one day to do; give yourself three, because you are going to come into some new obstacles.” This advice can be thought of as quite general for business, but the industry around marijuana can present some obstacles that other industries may not face. One of the main issues comes with that of legislation. Given that marijuana is still a Schedule I narcotic as far as the federal government is concerned, many of the normal business practices across other industries do not apply to that of cannabis.
One of the primary resources with starting a cannabis-based company is the issue of banking. It is no surprise that companies need to have bank accounts when starting up, but this is easier said than done in the cannabis industry. While some of the more standard services from banking such as checking accounts are available to those who run cannabis-based businesses, the fact that it is still federally illegal means that other issues can arise such as that of credit card payments and so on.
Surprisingly, these regulations do not only apply to businesses that touch the physical plant but other ancillary companies as well. Ostrowitz stated that “I’m the bank girl, the former regulator. But, we’re still having banking issues.” The positive in this case comes from the fact that every day we as a country are moving toward legislation on a federal level for cannabis. While over half of the country has legalized marijuana on a state level for either medicinal or recreational use, it seems as though the rest of the country is simply waiting to act. She further stated that “Our bank is wonderful as far as conventional banking goes, but merchant services have been extremely challenging for us lately. We take credit cards from clients and run them monthly and our merchant services provider cut us off . . . We have enough money coming in each month to pay everyone, but my challenge this week is to figure out how to get it into the bank.” The issue of security often comes up when entering the marijuana industry as carrying around a bunch of loose cash is obviously not the safest option. Services in the industry such as Brinks money transportation can help to alleviate some of this stress, but options are still being made for individuals.
The industry on marijuana has become extremely lucrative over the past five years or so. With so many new businesses coming into the space, the demand for other services such as legal, PR, advertising and many others, becomes apparent. The hopes are high that these services will soon become easily available to those in the cannabis market.
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