Discrimination Jeopardizing Cannabusinesses

Even though cannabusinesses are legal in many parts of the country – for recreational users in Washington and Colorado and medicinal patients in 16 other states – banks and credit card companies discriminate against them by refusing to do business with them.

As this CNN video explains, this discrimination could potentially jeopardize cannabusinesses. They are forced to rely almost exclusively on cash transactions, creating a risky situation where businesses have far too significant amounts of cash on hand at any given time. And, when combined with the cash value of their products, cannabusinesses are at a high risk of facing a devastating loss due to robbery.

Such discrimination forces them to invest heavily in security measures – security guards, motion detectors, infrared sensors, cameras, and security services – to protect themselves. According to CNN Money, this situation is made even more complicated by the decision of ADT, the largest such company in the nation, to refuse its services to cannabusinesses since their activities are illegal under federal law. National banks state the same rationale for refusing their services to cannabusinesses.

This discrimination hobbles many cannabusinesses. Since they cannot access traditional banking services, even innovative, experienced entrepreneurs are hard-pressed to find investors willing to grant loans for startup or expansion capital. Yet they must spend huge sums of money on security measures to protect against theft, money which could be spent on improving their business such as marketing, increased product/service offerings and paying better wages to qualified staff.

Thankfully, as the industry grows their needs are being taken seriously. Brave American capitalists are launching new-companies or expanding their offerings to meet the needs of the expanding cannabis industry to prevent federal prohibition from crippling this explosive industry.