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American Banks Missing Out On Legal Cannabis In Canada

S2S Insurance, cannabis insurance, contact Eric Rahn today, marijuana liability insurance, cannabis bankingThere are articles and news reports across the internet that recognize the money making potential in the legal cannabis industry. In the US, in states that have legalized marijuana in some form, people have invested heavily in the industry banking on big returns. People working in the trenches of the industry are starting to see early returns on their investments and they have the cash to prove it. While it is good to be rolling in dough, it is not ideal, and leads to some serious problems.

Most banks, large and small are not willing to extend their services to cannabis related businesses because of the plants status with the US government. Cannabis is listed as a Schedule 1 controlled substance in the Controlled Substance Act. As long as this federal law lists the drug as a Schedule 1 controlled substance, the financial industry will face significant challenges all the way from banking to merchant services by risking running afoul of federal law if they work with weed related businesses. The problem is not limited to the United States, it is impacting Canada as the entire country has legalized the use and sale of the drug.

Even though Canada legalized recreational marijuana and opened the door to a flurry of business activity, big banks in the United States and Canada are keeping the industry at arm’s length because of pot’s muddy legal picture in the United States.

Cannabis, while legal for recreational use in nine US states, and Washington D.C., remains illegal under US federal law. American banks have largely stayed away from providing services to the industry because federal regulations prohibit lenders from working with any business that deals in illegal drugs. Lenders could face money laundering charges in the United States if they do.

But banks could be missing out on a bonanza. The marijuana industry is expected to grow substantially in the next five years, with sales in the United States expected to hit $23.4 billion by 2022, according to cannabis market research group Arcview. Canadian sales are expected to hit $5.5 billion.

cannabis insurance specialists, s2s insurance specialists, legal cannabis, dispensary insurance, marijuana insuranceStill, most of the largest banks remain on the sidelines for now — even in Canada, where banks have to worry about potential compliance issues abroad. The American Bankers Association, the US industry’s powerful lobby, has said it wants Congress to resolve the conflict between federal and state laws so banks aren’t stuck in the middle, though it doesn’t have a position on legalization itself. Right now, banks that do decide to take a chance and quietly work with marijuana businesses are expected to file suspicious activity reports for every transaction related to those accounts — a huge and potentially expensive logistical headache. TD Bank (TD), the Royal Bank of Canada and Bank of Montreal (BMO), all of which have an international presence, declined to comment for this story.

As long as cannabis is considered a Schedule 1 controlled substance there will be an inherent risk to working in the cannabis industry. Not only are there legal risks, but because normal financial services are not available, you’ll  be dealing in cash which posses it’s own set of problems. Your business could be targeted for theft and robbery, which may come with property damage and more. If you are considering or already involved in a cannabis related business, you need a risk management strategy. Reach out to S2S Insurance Specialists and talk with Eric Rahn about your business and risk management strategies.

read more at cnn.com

Why Cannabis Testing Labs Need Insurance

Cannabis testing labs are not the first thing people think of when thinking of the cannabis business. When we begin to think of why cannabis is becoming legal in many states, it begins to make sense why the cannabis should be lab tested. Cannabis has a number of medical benefits and uses. For safety reasons the traditional medicinal products we use have certain information clearly displayed on the label. Our medicine is labeled with information regarding strength, dosage, and necessary warnings about side effects. As cannabis moves from the illegal market into the mainstream, these same standards will need to apply to marijuana. In order to define the parameters of safety, dosage and best use, cannabis must undergo testing. The need for testing is where cannabis testing labs come into play.

Due to a demand and need for cannabis testing labs, owners of these labs must be aware of the risks associated with the labs. Cannabis business owners should always look to mitigate risks in all facets of business including their cannabis testing lab facilities. Failure to properly insure your lab could lead to massive financial losses that many business owners cannot recover from. Expensive testing equipment, computers, documents, samples can all be damaged in an accidental fire, burglary, or other types of unpredictable peril. Business owners can protect their investment by mitigating risk and having property insurance for their cannabis testing labs.

One scientist analyzed a number of marijuana testing labs in Washington and discovered that four labs cannabis lab testing insurance, cannabis insurance, cannabusiness riskshad gone months without rejecting any of the marijuana they had tested. These perfect results are virtually impossible to achieve without turning a blind eye or tampering with the data. In other words, the labs were simply letting the marijuana slide through the regulatory process, regardless of its contents or contaminants. As a result the legal cannabis available in many states may still contain contaminants and unknown levels of cannabinoids. Smoking certain bacterias that can develop in cannabis—the types that these testing labs are supposed to root out— can be dangerous to human health.

A qualified scientific laboratory will be required to follow specific scientific guidelines for testing and verifying the levels of CBD, THC and contaminants of the cannabis. These testing procedures are expensive and require high levels of expertise, are complex, and create a greater chance for mistakes to be made. Mistakes in testing could lead to recalls, stops in production and sales, product liability law suits and punitive damages which are all costly to the business owner. Cannabis testing labs must be protected through errors and omissions insurance matched with general and excess liability to prevent suffering financial losses that can cripple a business. Even certified labs that use highly trained professionals are at risk. No matter how well trained a professional is, there is the ability to make a mistake in the very complex field of scientific testing. It is critical that cannabis business owners work with an insurance agency that specializes in cannabis insurance to put together the right insurance package for their business.

read more at herb.co