As Pennsylvania is preparing to distribute permits and allow distributors
and growers to begin selling their products, many applicants are preparing
their applications carefully and hoping to be among those businesses that
are granted licenses to sell their products. Unfortunately for the brand
new industry, the struggle is still starting. Under federal law, marijuana
and its derivatives are still illegal, even if states like Pennsylvania
have taken steps to legalize cannabis use.
There is a veritable maze of regulations to navigate for those who wish
to receive one of the limited licenses, as well as the more traditional
struggles of starting a new business. It can be a difficult process, but
mistakes can cost organizations their chance at receiving a coveted license
that would allow them to open a dispensary or grow and cultivate marijuana.
Financial compliance is one of the most important issues for these organizations
to address. Since marijuana is still a controlled substance under federal law,
medical marijuana organizations are subject to special banking, tax issues, and accounting
that are unique to the industry.
These businesses will be facing strict scrutiny as their applications are
reviewed, so it can be in their favor to seek help from experienced attorneys,
accountants, and bookkeepers. These professionals can help the new businesses
face the challenges of starting a new business as well as the complexities
of running a business in the hotly contested medical marijuana industry.
Starting a business correctly and setting it up in compliance with regulations
can save a lot of money in the future for these companies, and can save
them the hassle of trying to correct problems later.
Because of the federal restrictions surrounding the distribution, possession,
and use of marijuana, even for medicinal purposes, it can be particularly
difficult for new businesses to work with banks and lenders the way other
industries are able to. Many financial institutions are reluctant to work
with medical marijuana businesses and possibly run afoul of federal regulations.
This can leave new businesses struggling to raise start-up capital, and
it can also leave businesses unable to accept credit or debit card payments.
If these businesses are operating with cash sales, bookkeeping, payroll,
and tax issues can be even more complex.
Unfortunately for Pennsylvania dispensaries and growers, there is little
that the state can do to help. Many major banks have already refused to
work with marijuana-based businesses, citing the lack of protections and
the possibility of prosecution from the federal government. As many banks
are federally insured, they are bound by federal regulations, as well
as states. There may be smaller banks who are willing to work with medical
marijuana businesses, but it is still possible that businesses may struggle
to find the financial services they require.
There may be relief coming soon for medical marijuana businesses and banks
alike. A bipartisan group of representative introduced a bill called the
Secure and Fair Enforcement Act in Congress. If passed, this bill would
provide protections to banks who deal with marijuana-related businesses.
It has been lagging in Congress in past years, but the representatives
are hopeful. With more than half of the states in the U.S. having legalized
some form of marijuana use, there is mounting pressure on Congress to
make efforts to address the issues raised by the $7 billion a year industry.
Sacks Weston Diamond LLC, we are passionate about protecting medical marijuana businesses and patients.
We are proud advocates of legalized medical marijuana, and we strive to
help those involved in the medical cannabis industry.
If you have questions about your medical marijuana case,
contact our firm to request a