Category: Marijuana Industry News

Federal appeals court gives Colorado marijuana credit union another chance

A federal appeals court has breathed life into a plan hatched in Colorado to open a credit union for the marijuana industry.

A three-judge panel for the 10th U.S. Circuit Court of Appeals on Tuesday vacated a district court ruling that nixed Denver-based Fourth Corner Credit Union’s bid to receive a master account with the Federal Reserve Bank of Kansas City.

Fourth Corner Credit Union first formed in late 2014 with the goal of serving licensed marijuana-related businesses, which have had trouble accessing financial services from traditional banking institutions. Any credit union or bank needs a Federal Reserve master account to operate.

The judges remanded the case to the district court with instructions to dismiss the amended complaint without prejudice.

“The district court dismissed the amended complaint, reasoning that Fourth Corner would use the master account to violate federal drug laws. This ruling was erroneous,” U.S. Circuit Judge Robert E. Bacharach wrote in one of three opinions published Tuesday. “The district court should have presumed that Fourth Corner would follow the court’s determination that servicing marijuana-related businesses is illegal. And in the amended complaint, Fourth Corner essentially promised to obey the law that would be set out in the eventual declaratory judgment.

“In these circumstances, the district court had little reason to jettison the standard on a motion to dismiss and rely instead on suspicions about what Fourth Corner would do.”

Officials for Fourth Corner and the legal counsel for the Federal Reserve could not be immediately reached late Wednesday for comment.

It’s unclear whether the Federal Reserve would want to appeal and whether the Supreme Court would take the case, said Tom Downey, a Denver-based attorney who specializes in cannabis regulations and law with Ireland Stapleton Pryor & Pascoe P.C.

Next steps aside, the 10th Circuit’s decision is telling about the progression of the marijuana industry, Downey said.

While “core issues” like states’ rights and federal drug scheduling dominate, he said the battles are being fought on the margins: zoning, civil RICO lawsuits, banking, employment law and intellectual property.

“I think that this ruling is an example of the normalization of this issue — that this is about banking, not about the federal-state conflict about marijuana,” Downey said.

Fourth Corner received a state credit union charter in November 2014, which allowed it to acquire a bank routing number and apply to the Federal Reserve Bank of Kansas City. The regional bank for the Federal Reserve System denied the application, prompting Fourth Corner’s lawsuit.

This story is developing and will be updated.

10th U.S. Circuit Court of Appeals ruling on Colorado marijuana credit union (PDF)

10th U.S. Circuit Court of Appeals ruling on Colorado marijuana credit union (Text)

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How to Find an Investor for Your Small Business by Thinking Outside the Box

find an investor for your business

find an investor for your businessThe fear of the unknown (or a fear of failure) can keep even the brightest business minds stuck in unrewarding jobs and professional insecurity. But, lack of finances shouldn’t be the prime factor for either staying in a job you’ve outgrown or not growing your existing business. Sometimes, all you need is someone to help get you over the hump. So how do you find an investor for your business?

Finding an investor takes more than just hanging a sign on your door or posting an ad that says, “Private Investors Wanted!” or “Looking for Investors for My Business!” Plus, it may even require more than meeting with a bank loan officer or seeking a venture capitalist.

Here are some ‘think outside the box’ strategies to help you find an investor for your small business:

  • Start with the Small Business Administration. The SBA may have loans and grants available for your specific needs and business plan. Why start here? Because approximately 90% of all start-ups are small businesses. Customers are the foundation of any business, regardless of size, but not all businesses can successfully share the same marketing plan. The SBA offers help (most of which is free) with market research and planning so you can reduce potential and common business risks, recognize current and upcoming issues in your industry, and identify or target prime sales opportunities.
  • Consider incubators or accelerators. These are serious private investors who are interested in having a larger role in your business. If you’re open to this, incubators and accelerators can quickly help you take your business to the next level. They offer physical space and professional help to get your business set up so you can focus on the actual work. Begin with the National Business Incubation Association to see which local incubators may work for your needs.
  • Check out online lending clubs. Traditional banks and government (or big business supported) lending services have a lot of red tape and restrictions when it comes to providing financial support to any business. It’s almost impossible nowadays to get a bank loan for a small start-up. Before letting that fact crash your professional dreams, look online for the right solution. TrustLeaf, Lending Leaf, and Prosper are good places to start for peer-to-peer lending options when you need an investor.
  • Search beyond LinkedIn or Facebook. There are hundreds of social media platforms online today, but the top five rarely change. Facebook still leads the pack, but the site has around 83 million fake accounts. Business sites like LinkedIn are great, but most people listed there are in the same boat and they’re trying not to sink or drown. Consider trying to find an investor on sites where they hang out, such as Confundr, Efactor, StartupNation, and Xing instead of swimming in circles.
  • Join a Crowdfunding site. Some of the greatest success stories occur when innovators think outside the box for multiple stages of their business plan. Crowdfunding sites help entrepreneurs get the funding they need in a hurry, whether that’s the general public looking for the next big trend or an eager private investor interested in a big payoff. Kickstarter, RocketHub, and OurClub are just a few ways to get others in your personal network to help share your investment goal to reach it in a hurry.

Investor Truths You Need to Know

Professional investors are interested in making money, pure and simple. Private investors know the risks and will expect the following before deciding in your favor:

  • You may need to show that you will be using a proven business model.
  • Keep your business plan thorough yet simple and relatable. Do not try to reinvent the wheel.
  • Explain why you are the best person to run and grow the business, and make them believe it.
  • Keep all financial projections on the conservative side, so you over-deliver on promises.
  • Opt for low risk/lower fund requests, even if it means you’re recruiting multiple investors.
  • Provide a solid exit strategy in the event the business unexpectedly fails or you need to sell it.
  • Understand and accept that the investors will essentially be your bosses until they are repaid in full.

Remember, finding the right private investor can make all the difference in the world when trying to start or grow your small business. So, if you need to find an investor, take the necessary steps to ensure you find the best options for your small business needs.

Yet, sometimes private investor funding may not be enough and you may still need additional capital. Learn 4 other ways business owners can finance their ventures and how to qualify for each of these.

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UN Drug Office can’t find a single cannabis drug overdose, despite it being most widely-consumed drug

The United Nations Office on Drugs and Crime (UNODC) has released its 2017 World Drug Report, covering 2015 statistics from around the world. The report finds that cannabis is the most consumed, most widely cultivated and most confiscated drug the office tracks.

Despite leading in all of these categories, UNODC reported zero fatal marijuana overdoses in 2015, unchanged from 2014.

Here’s a look at some of the intriguing stats in the report:

Use

The report states that cannabis is the planet’s most widely consumed drug, with an estimate of 3.8 percent of the adult population using it in 2015. This translates to an estimated 183 million people (with a lower range on the estimate of 128 million and an upper range of 238 million). Other drugs tracked in decreasing order of use include opioids (upper limit of .88% of population), opiates, cocaine, amphetamines and ecstasy. 39 percent of individuals reported in treatment for “drug disorder” are being treated for cannabis.

Prevalence of use varies by country. The report states that in the European Union, about 6.6 percent of people age 15-64 used cannabis in 2015. On the younger side of the demographic, those age 15-34 use at a higher rate of 13.3 percent. Around 3 million adults (1 percent) in the European Union are estimated to be daily or near-daily cannabis users, 70 percent of whom are between 15 and 34 years old and mostly male. In the countries that allow medical cannabis use, past-month, non-medical use of cannabis increased significantly among the population aged 26 years and older, from 5.8 percent to 7.2 percent over the period 2004-2013. However, among the younger age groups (12-17 years and 18-25 years), changes in the prevalence of non-medical cannabis use were not statistically significant and not considered to be related to the measures that allow the use of cannabis for medical purposes.

Cultivation and seizure

The report also found that cannabis is the most widely “illicitly produced” drug worldwide. From 2010-2015, UNODC tracked reports of cultivation of cannabis by 135 countries. For contrast, 49 countries reported cultivation of opium poppy (the source of heroin) and only eight countries reported coca bush (the source of cocaine).

Cannabis seizures were reported in 164 of 168 countries.

For cannabis, in terms of number of plants grown and “eradicated,” there’s a reason it’s called “weed.” In single years reported ranging from 2011-2015, Paraguay eradicated 12,122,750 plants; Ukraine: 7,550,000; Peru: 6,200,578; Tajikistan: 2,180,121; Costa Rica: 1,727,175; Netherlands: 1,600,000; Brazil: 1,364,316; and Jamaica: 1,053,000.

In this file photo taken in August 2015, masked police officers burn cannabis plants in Kurvelesh commune, 200 kilometers south of the Albanian capital, Tirana. Authorities in Albania say they destroyed about 2.5 million marijuana plants last year, four times more than the year before. (Hektor Pustina, Associated Press file)

The United States doesn’t give stats on plant counts but reported that it had eradicated 396,620 indoor sites and 3,904,213 outdoor sites. At a conservative estimate of 10 plants per site, that would be 43,008,330 plants that did not make it to anyone’s pipe bowl.

For opium, the report’s best estimate was 304,800 hectares grown (1,177 square miles) around the world, and for coca, 156,500 hectares (604 square miles), with 97,560 hectares reported eradicated (+45,266 plants in Ecuador).

6,000 tons of cannabis herb and 1,300 tons of cannabis resin were seized annually around the world. More than half of all drug seizures (53 percent) were of cannabis (35 percent flower, 13 percent resin, 3 percent plants, 2 percent other).

Deaths

Globally, UNODC estimates that there were 190,900 drug-related deaths in 2015, (lower limit 115,900 to upper limit 230,100). The report notes that “this is most likely an underestimate.” North America accounts for more than 25 percent of drug-related deaths.

The report notes:

Mostly driven by opioids, overdose deaths more than tripled in the period 1999-2015 and increased by 11.4 percent in the past year alone, to reach the highest level ever recorded. Of the 52,000 total drug-related deaths reported for the United States, those related to opioids accounted for more than 60 percent. In 2015, the death rate from synthetic opioids, increased by 72 percent compared with the previous year, whereas heroin overdose deaths increased by 23 percent over the same period.

While the UNODC noted that cannabis was involved in 16 percent of drug-related emergency room visits in Europe, the organization had no statistics to report on deaths caused by cannabis. The report did list a statistic for cannabis in “healthy years of life lost,” at the lowest rate among any drugs listed.

(UN Office on Drugs and Crime, World Drug Report 2017) (UN Office on Drugs and Crime, World Drug Report 2017)

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