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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

Property Insurance Key Component to Protecting Cannabis Businesses

Cannabis business owners are having financial success which is a the reason they are in the business of cannabis. The benefits of financial success are obvious, but there is a stark downside as well. Cannabis business owners have too much cash. The federal government considers marijuana a Schedule I drug along the same lines as heroin, therefore businesses that profit from the sale of marijuana and marijuana related products such as edibles are technically in violation of federal law. With that in mind, you may be wondering where cannabis property insurance comes into play? The connection is simple, cannabis businesses have lots of cash on hand due to banks and financial institutions refusal to do business with the cannabis industry. Criminals love cash. When you combine lots of cash on hand with criminals. there is a legitimate cause for concern for cannabis business owners.

s2s insurance, eric rahn, cannabis insurance, marijuana property insurance, cannabis insurance specialistsAs long as the federal government continues to consider cannabis an illegal substance. the problem of too much cash will continue to exist for cannabis business owners. Criminals and thieves see a cannabis dispensary as a piggy bank ripe for the taking. Often marijuana dispensaries have inadequate security systems and are often left completely unattended after business hours. Seasoned criminals may be able to get in and out of your establishment quickly causing minimal damage, while less experienced criminals may cause twice as much damage to the property and products on site. Cannabis specific property insurance is a key component to protecting your business. You can’t predict when a criminal may try to break into your cannabis business, cause damage, and steal your hard earned cash, but you can be prepared to cover the loss. Property insurance allows for cannabis business owners to take some comfort in the fact that if they are ever robbed, the loss can be mitigated with a cannabis property insurance policy.

With millions of dollars in medical marijuana proceeds — all cash — being moved across Pennsylvania monthly in unmarked cars, state banking regulators have appealed to leaders in the U.S. Congress to create protections for financial institutions so that banks and credit unions might serve the state cannabis industry.

s2s insurance, eric rahn, marijuana insurance, marijuana property insurance, dispensary insurance, liability insurance for cannabis“We urge Congress to consider legislation that creates a safe harbor for financial institutions to serve a state-compliant business, or entrusts sovereign states with the full oversight and jurisdiction of marijuana-related activity,” states the letter from Pa. Secretary of Banking and Securities Robin L. Wiessmann.

State banking officials from Alaska, Connecticut, Hawaii, Louisiana , Michigan, Montana, Nevada, New York, Oklahoma, Oregon and Washington State also signed the letter.

The federal government considers marijuana illegal, although 31 states and Washingto

n, D.C., have legalized the drug for either medical or adult recreation use.

The handful of institutions that provide service to the marijuana industry are at constant risk of federal prosecution, asset forfeiture or criminal penalties.

At S2S Insurance our experienced cannabis insurance specialists will evaluate your potential risk based on all available data. Once the risk assessment is completed, a specialist can help you put together a risk management strategy that protects your cannabis business from the various but specific threats that face a cannabis business owner. Contact Eric Rahn at S2S Insurance today to receive a quote.

read more at post-gazette.com

California Cannabis Business Owners Remain at Risk As State Congress Rejects Banking Measure

Cannabis business owners are in the marijuana business to make money, which has become a major problem. Cannabis business owners are dealing with a reality in which they are having marketing and retail success that is generating large revenue numbers. The large revenue being generated is coming in the form of cash and cash only, unless the company is an ancillary business and even then there are challenges. Due to the federal government refusing to remove marijuana from a schedule I classification, banking institutions and cannabis business owners are having a tough time finding common ground. While it is true that a number of states have legalized marijuana either for medical use, recreational use or both, many financial insinuations  are refusing to work with marijuana related businesses due to fear of facing federal charges for money laundering while the plant is still considered illegal federally.

S2s Insurance, Eric Rahn, cannabis insurance specialists, Schedule 1, marijuana business, cannabis ancillary business, weed insuranceCalifornia has attempted to shield it’s financial institutions from federal punishment by introducing a measure that would allow the banks to open accounts for marijuana businesses without being punished by federal regulators. The measure was voted on and rejected by the state’s congressional committee. For the banks and cannabis business owners, their hands remained tied. Banks cannot risk federal prosecution for money laundering or even possibly a RICO (Racketeer, Influence, and Corrupt Organizations Act) charge for helping a cannabis related business deposit money into a bank. The federal government could come in at anytime to freeze and or seize the bank’s assets due to the illegality of marijuana which most banks are not willing to risk.

The broader measure would have prevented the U.S. Department of Treasury from taking any action to “penalize a financial institution solely because the institution provides financial services to an entity that is a manufacturer, producer, or a person that participates in any business or organized activity that involves handling marijuana or marijuana products” in accordance with state or local law.

After a lengthy and impassioned debate during which at least 19 lawmakers spoke, it was defeated on a voice vote by the House Appropriations Committee.

Despite the fact that a growing number of states are legalizing marijuana for recreational or medical use, many financial institutions have remained reluctant to work with cannabis businesses for fear of running afoul of money laundering laws under ongoing federal prohibition.

s2s inaurance, eric rahn, weed banking, cannabis related business, cannabis insurance specialists, marijuana insuranceThe risk for the banking institutions is clear, frozen assets or seized assets both equal lost money. There is no insurance policy that can protect a bank if they are charged with federal crimes. The banks are protecting themselves by not working with cannabis business owners or cannabis related businesses. So how do cannabis related businesses protect themselves and from what exactly? While piles of cash seems like a good thing, the reality is that this creates a major liability and risk factor for business owners. As the money grows, storage becomes a problem. Where do you put large stacks of highly valuable and flammable currency? How do you transport it? And, how do you protect your business from would be thieves who know you have large amounts of cash on hand?

There are steps you can take logistically, such as large safes, special storage facilities, armored vehicle transport, and accounting teams designated for counting cash and keeping track of where the money physically is located. All this is very costly, but even with all this your business could easily become a target for a robbery. Your business could be targeted during business hours, after hours, or while the cash is in transport. As a cannabis business owner you should protect yourself, your team, and your business by working with the cannabis insurance specialists at S2S Insurance to properly assess your risk and develop a risk management profile. From Eric Rahn of S2S Insurance, “your cannabis business can’t afford to not have cannabis insurance.”

read more at forbes.com