Tag Archives: banking

Building a Cannabis Banking Eco-System with Terry Mendez

By Pam Chmiel
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The cannabis industry is still operating within a cobbled-together financial system—one defined by workarounds, instability, and uncertainty.

Most major banks remain unwilling to work with cannabis businesses due to the risk and compliance burdens associated with serving a federally illegal industry. In 2014, former Safe Harbor Financial CEO Sundie Seefried helped establish one of the first scalable models for compliant cannabis banking, setting standards for how financial institutions interpreted FinCEN’s marijuana guidance. The framework outlined how banks and credit unions could serve state-legal cannabis businesses while still meeting their Bank Secrecy Act and anti-money laundering obligations, giving institutions the confidence to engage with the industry.

Today, Safe Harbor is led by CEO Terry Mendez. In an interview, he explained that the company has evolved beyond compliance and is building financial safety nets to protect cannabis businesses from operational disruption when a bank abruptly exits the industry, leaving clients scrambling to access their own capital. “We have more than one cannabis-friendly bank on our platform,” explained Mendez. “If, for whatever reason, one of those banks decides they want to exit the cannabis industry. We have a place for you to go that doesn’t disrupt the flow of your business.”

Mendez pushed back against the assumption that federal rescheduling, or even full legalization, would automatically open the door to large national banks. He noted that several fully legal industries—including gambling, cryptocurrency, and even businesses operating on tribal lands—continue to face persistent banking challenges. For major financial institutions managing billions or trillions in assets, perceived regulatory and reputational risks often outweigh the potential upside. As a result, Mendez said, it is typically regional and state-chartered banks, along with credit unions, that step in to serve these underserved sectors by capturing market share where larger banks remain unwilling to engage. He did add that while rescheduling doesn’t address safe banking, it sends the message that the federal government, under a conservative administration, sees a path forward.

 

Making Cannabis Banking Work for Financial Institutions

Mendez explained that Safe Harbor’s core value proposition is to remove the regulatory and financial burdens that keep most banks on the sidelines. In the company’s early years, its systems were under constant regulatory scrutiny, ultimately becoming a national benchmark for compliant cannabis banking. Today, regulators across the country rely on Safe Harbor’s platform much like banks outsource payroll to firms like ADP—maintaining responsibility for compliance while leveraging an established, regulator-tested infrastructure.

Rather than forcing banks to build costly in-house cannabis programs—which can require $500,000 to $1 million in staffing, software, and compliance investments—Safe Harbor enables institutions to “rent” a turnkey framework. The platform embeds enhanced due diligence requirements unique to cannabis, including verifying product SKUs, ensuring regulated supply chains, preventing youth access, and continuously monitoring license status. These are obligations traditional banks are not designed to manage, and that can cost thousands of dollars per account to maintain independently.

Mendez emphasized that Safe Harbor’s role is not just to vet cannabis operators but also to protect banks, lenders, and ancillary businesses, such as law firms, from sudden account closures. He pointed to recent real-world examples of businesses that were abruptly forced out of non-cannabis-specialized banks, jeopardizing payroll and operations overnight.

 

Growing the Network

Drawing on his background at Fortune 100 companies, Mendez said the cannabis industry lacks institutional infrastructure that other regulated industries take for granted. Cannabis operators often have limited access to capital markets, professional services, and back-office support, such as complex financial, accounting, and compliance responsibilities, which impede growth.

Large multi-state operators may require loans in the tens or hundreds of millions of dollars, amounts that many regional banks and credit unions cannot support. Mendez pointed to a loan syndication program they are working on that will allow multiple banks to bid on a loan to spread out the risk, an option commonplace in more mature sectors. Until cannabis companies can access the same financial and operational tools available to other regulated industries, he said, scaling will continue to require workarounds rather than standardized systems.

 

RULES, RULES, RULES!

Mendez described compliance as one of the biggest deterrents keeping regional banks on the fence about serving the cannabis industry. Most banks are not typically equipped to oversee cannabis compliance, including local jurisdictional rules, product restrictions, and preventing minors from accessing dispensaries. These requirements can vary not only by state, but by city and municipality, creating a patchwork of regulations that institutions must navigate to avoid penalties.

While many banks attempt to manage this complexity through software alone, Mendez argued that technology without cannabis-experienced guidance can create additional risk. Compliance systems may surface issues, but banks still need to understand how to interpret the data, respond appropriately, and communicate with regulators during audits. Without expertise, institutions can expose themselves to costly enforcement actions, especially in a high-stakes, low-margin industry.

Mendez noted that many operators are already in survival mode, with a growing number entering receivership, since bankruptcy isn’t an option because it’s a federal legal process. Failing to understand the regulatory “game,” he said, leaves businesses vulnerable to audits, enforcement actions, and financial disruption they may not be able to recover from.

 

Filling The Gap For New Entrepreneurs

For most entrepreneurs, access to startup capital is the most challenging part of getting a business off the ground, and SBA-style lending is largely unavailable without years of operating history and proven sales. This catch-22 stops many new companies from ever opening their doors. Mendez supports BIPOCann, an incubator program that guides social equity and minority entrepreneurs through the business planning process and helps them secure capital. He said he wishes there were more programs like it.

Mendez described this as a working-capital desert, where lenders are wary of early-stage risk and many first-time operators lack the experience or financial history banks are looking for. Even established cannabis-focused institutions say “no” far more often than yes. One way Safe Harbor is beginning to address the imbalance, he said, is by rethinking how risk is evaluated and shared. Syndicated and participation-based lending, typical in other industries, allows multiple lenders to split exposure on a single loan, making it possible to support newer entrepreneurs without forcing any one institution to shoulder all the risk.

But access to capital is only part of the problem. Day-to-day banking for cannabis remains unusually burdensome, with heightened transaction reviews, delayed wire transfers, and jurisdiction-specific rules that can change with little notice. Mendez pointed to situations where operators have suddenly lost access to funds due to processor exits or regulatory uncertainty, causing disruptions that can jeopardize payroll and operations overnight.

Mendez does not believe a single policy shift will solve those challenges overnight. Even with rescheduling or broader federal reform, banks will still need industry expertise to help establish compliant frameworks before meaningful capital flows into the sector. In the meantime, Safe Harbor plans to continue building services designed to reduce disruption where traditional financial institutions remain reluctant to participate. Until then, cannabis businesses will continue to depend on regional institutions, credit unions, and specialized financial partners.

You can hear Terry Mendez’s full interview here.

Cannabis Payments in 2026: Why Technology Will Move Faster Than Congress

By Mark Lewis
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For more than a decade, the cannabis industry has been stuck in a state of contradictions: fully legal in many states and fully illegal at the federal level. When it comes to finances, the result is a sector with modern retail expectations supported by armored cars, cash drops, and payment workarounds duct taped together.

Looking forward, 2026 is shaping up as a break-open year, not because Congress will suddenly save the sector or rescheduling might pull through to gain voter attention in a mid-term election year, but because technology is finally maturing enough to do what legislation hasn’t: Create a more secure and affordable payments environment.

The political noise around cannabis banking is louder than ever. SAFE Banking legislation, rescheduling, or administrative reform all might offer relief, but even if Washington acts, payments will not suddenly normalize. Card networks won’t flip a switch, national banks won’t onboard en masse, and operators won’t wake up able to ditch cash.

The catalyst for real change isn’t Congress, it’s technology.

The Status Quo: Legality Without Infrastructure

State-legal cannabis businesses can open bank accounts, but only with smaller institutions willing to shoulder the compliance overhead. The big players like Bank of America are uninterested in the enhanced due diligence, ongoing transaction monitoring, and reporting obligations. Finding those banks that will work fairly with cannabis operators can feel like looking for a needle in a haystack.

Payments are even more constrained, as credit card processing is functionally off the table without workarounds. Even those tricks are starting to show cracks, as anything resembling the “cashless ATM” era is now scrutinized or shut down, and in 2025, we saw crackdowns on major players like Trulieve.

All while running a normal business, cannabis operators face higher compliance costs. Ask any operator what keeps them up at night, and the answer rarely begins with politics. It’s cash flow.

Because payment processors may hold reserves, delay settlement, or freeze funds when compliance alerts are triggered, retailers often experience unpredictable access to their own money. Liquidity becomes a moving target. Vendors wait. Payroll can go unanswered. Inventory decisions get narrower and more conservative.

The irony is that cannabis retailers are not looking for exotic financial products. They want what any bakery or hardware store has: predictable payments, stable banking, transparent fees, and the ability to focus on their business operations instead of compliance.

Where Technology Finally Steps In

What makes 2026 different isn’t a shift in legality; it’s a shift in capability. After years of patchwork approaches, tech-driven financial infrastructure has finally caught up to cannabis, and it is reshaping payments from the inside out.

The evolution centers on three areas:

  1. Card and Mobile Payments
    Cash isn’t just challenging to track; it’s also expensive for a business. Between the armored cars and security requirements, things add up quickly. The same technology principles behind mainstream apps like Venmo, Apple Pay, and even Starbucks Rewards can and should be adapted by cannabis operators seeking to modernize their payment systems.
  2. Real-Time Settlement through Innovative Payment Rails                  New rails make it possible for cannabis transactions to settle rapidly, often same-day, at a fraction of traditional high-risk processing costs seen in credit card and ACH rail infrastructure. Faster settlement stabilizes cash flow — the single biggest pain point in the industry — and shrinks the financial drag that comes with uncertainty. Tapping tech that understands both open and closed payment rails will only support an operator.
  1. Shutdown-Proof Infrastructure
    None of this innovation works if your bank or Visa finds out you are working in cannabis and closes your account, leaving you in the lurch. For Lüt, not only have we structured our payment rails to stay compliant in high-risk industries, but we’ve also created a multi-cloud server system so that if one server has an outage, another is already seamlessly supporting operations. If your payment support does not have a plan for network system outages, your operations will still be vulnerable. 

Smart tech is consolidating into a unified system. Instead of operators scrambling from one unreliable processor to another, they get stability, transparent pricing, and a cash-flow infrastructure anchored in technology and user-friendly interfaces rather than workarounds. This isn’t theoretical. It’s already happening, and operators adopting these systems are seeing lower fees, fewer outages, and dramatically improved financial liberty.

What About SAFE Banking and Rescheduling?

If SAFE Banking or rescheduling becomes a reality, banks will feel more confident providing services for the cannabis industry. However, confidence doesn’t equal capability, and the changes won’t happen overnight. For every state that has created an adult-use or medical program, it’s taken years for an actual sale to happen. Rescheduling and new federal laws won’t buck the trend here. 

That’s why the technology being built today is so critical. We know that rescheduling will help medical research, but the rest is uncertain and far off. Operators that modernize in 2026 will be positioned for true cash, whenever it finally arrives.

Cannabis doesn’t need to wait for Congress to improve payments. The real transformation is already underway, built not from policy but from engineering. Automated compliance, closed-loop payment rails, and real-time settlements from innovative tech design are doing what laws haven’t yet done, creating a safer and more predictable payments environment.

2026’s winners won’t be the ones who bet on legislative rescue. They’ll be the ones who bet on technology.

 

$1.3 Billion/Month Later: What Cannabis Banking Has Really Taught Us

By Kevin Hart
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A decade ago, most banks wouldn’t touch a cannabis business. Whenever banking access came up, the discussion stopped almost immediately. People said it was too risky, too unclear, or that the timing just wasn’t right.

Today, Green Check has over 180 financial institutions across the U.S. that actively serve more than 17,000 licensed operators. Together, those relationships represent more than $1.3 billion in legal, transparent cannabis transactions every month. That number tells a story of progress, not just for financial access, but for normalization.

It’s also revealed, through years of trial and adjustment, what actually works in cannabis banking, and what doesn’t.

 

From “No Way” to “How Do We Do It?”

The most significant shift hasn’t been in cannabis banking laws; it’s been in mindset. Five years ago, most financial institutions viewed cannabis as a compliance nightmare. Today, the more common attitude is cautious curiosity: “How do we enter safely, and who can help us understand the rules?”

That change came from proximity. After reviewing the data themselves, many banks realized cannabis operators were outliers. They were small business owners balancing compliance checklists that would make most industries sweat. What seemed risky on paper turned out to be ordinary once they saw how the work was actually done.

In short, the more the financial system learned, the less it feared.

 

Where Banking Works and Where It Still Doesn’t

In mature markets, access to banking has become stable and predictable. For compliant operators, maintaining a transparent account is no longer the exception. In newer states, however, the pattern still repeats: financial institutions hesitate, regulations move slowly, and businesses open their doors before they have access to a secure account.

The gap is widest for early-stage operators, those still seeking licenses or building facilities. These companies often can’t yet show revenue or deposits, making them less appealing to institutions that prefer an established track record. Yet those early relationships are exactly what can prevent later compliance issues. Bridging that gap through education on both sides remains one of the most urgent needs in the ecosystem.

 

The Data Behind $1.3 Billion per Month 

At this scale, some clear patterns emerge. The strongest cannabis banking relationships all share one trait: they feel ordinary. When operators and financial institutions stop talking about “banking cannabis” and simply talk about “banking,” that’s a sign the system works.

Predictability defines maturity, and transparency drives growth. Businesses that keep clean records, communicate openly with their financial partners, and proactively share compliance documentation not only retain accounts longer but also gain faster access to credit. Over the past year, deposit growth has risen sharply, and lending programs are expanding. Roughly four in ten institutions that serve cannabis now offer lending, a number that continues to climb as confidence grows.

Lending, after all, is where healthy banking relationships evolve. When both sides trust the data, money can finally move in both directions.

 

Misconceptions That Still Get in the Way

Among operators, one misconception persists: that banking should be free. It’s understandable; it’s their revenue after all, but maintaining compliance requires real infrastructure. Cannabis banking involves transaction monitoring, due diligence, and ongoing regulatory reporting. Those processes take time and resources that extend well beyond traditional business accounts.

On the other side, financial institutions still harbor myths that cannabis is inherently unsafe or tied to bad actors. In reality, licensed cannabis businesses are among the most heavily regulated in the economy. Every product, sale, and employee is documented. When banks apply the same standards they use in other industries and rely on data rather than perception, the risk profile becomes far less intimidating.

The greatest barrier now isn’t legality or even compliance; it’s outdated assumptions.

 

What Regulators Still Miss

From the ground level, one truth is clear: cannabis banking already works. It’s safe, compliant, and scalable when structured correctly. What regulators and policymakers often underestimate is how much of this progress has happened under existing frameworks.

Licensed operators are not waiting for permission; they are building systems within the rules available to them. Every compliant account represents millions of dollars that are now traceable, reportable, and integrated into the financial system,  the exact outcomes policymakers claim to want.

The call for reform isn’t about possibility; it’s about consistency. Federal guidance that aligns with state programs would reduce friction, expand access, and make it easier for small businesses, not just multistate operators, to participate safely.

 

What Comes Next

The next chapter of cannabis banking won’t be about opening more accounts; it will be about connecting systems. As markets mature and interstate commerce edges closer, financial institutions will need tools that link compliance, payments, lending, and reporting into a single framework. Manual processes won’t scale in a multi-state or federal model.

The institutions that succeed will be those that think beyond deposits and fees, viewing cannabis as a long-term business segment rather than a compliance project. The operators that thrive will be those who treat transparency as an asset, not a burden.

And for policymakers, the opportunity lies in learning from what already works. Real-world data shows that compliant banking strengthens communities, reduces risk, and provides law enforcement and regulators with clearer oversight than any cash-based system could.

 

Lessons from the First Billion

Looking back, the first billion dollars in cannabis banking wasn’t defined by profit; it was defined by proof. It proved that local institutions could safely serve a federally restricted industry. It proved that compliance could scale, and it proved that stigma, once confronted with data, tends to lose its power. The next billion will be defined by connection: connecting data to credit, operators to opportunity, and policymakers to evidence.

If there’s one lesson worth carrying forward, it’s this: the closer we get to transparency, the further we move from fear. This is how legitimacy takes root, not through legislation alone, but through everyday practice, repeated a billion dollars at a time.

Cannabis Banking Today: Navigating Verification, Compliance, and Regulatory Change

By Kevin Hart
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Banking for cannabis businesses has come a long way. Ten years ago, most banks wouldn’t even consider it. Conversations would stop almost as soon as they began. “Too risky,” they’d say. “Too unclear.” Or, “Maybe someday, but not now.”

Fast forward to today, and Green Check Verified works with more than 180 financial institutions across the U.S. and over 17,000 licensed cannabis operators. Together, these accounts move more than $1.3 billion each month safely and transparently. That number doesn’t just reflect dollars. It tells a story about the gradual normalization of cannabis banking and what actually works when compliance, verification, and operational realities intersect.

 

From “Impossible” to Operational

The biggest shift hasn’t been in the laws themselves. It’s been in the mindset. Banks have moved from outright refusal to cautious curiosity, and now to adoption. They want to know how to serve these businesses safely. What changed their perspective? Proximity tied to Opportunity. Banks started reviewing real compliance data, not assumptions. They saw that cannabis operators were running tightly regulated, heavily documented businesses, not risky enterprises. Suddenly, what looked like a red flag on paper became routine once they understood the daily operations.

For operators, the challenge hasn’t disappeared. Even with a willing bank, verification requires documentation at a level most other industries never encounter. Multi-state operators must track licenses, deposits, and reports across different tax systems. For newer operators, establishing an account before revenue begins is often the biggest hurdle. Those early relationships, while tricky, are essential. 

 

Where Banking Works and Where It Still Doesn’t

In established markets, compliant operators can now open and maintain accounts with a level of predictability that was unheard of just a few years ago. In newer states, however, financial institutions remain cautious. Some move slowly, and in many cases, businesses begin operations before their banking accounts are fully set up. The most difficult situations involve operators who are still finalizing licenses or have yet to establish a financial track record. In these cases, the solution isn’t just waiting for revenue streams; it’s education and communication on both sides. When both banks and operators understand each other’s processes, requirements, and expectations, access becomes far more achievable, and the groundwork for long-term, compliant banking relationships is laid.

 

The Role of Technology and Advisory Services

Banking platforms that combine verification, detailed transaction monitoring, and compliance dashboards make a real difference in cannabis banking. They give banks the confidence to take on new clients while giving operators a clear view of what’s expected. When sales reports, licenses, and transactions are easy to see and understand, it removes friction, helps accounts get opened faster, and makes lending possible. Today, about four in ten financial institutions serving cannabis businesses offer a variety of loans, and that number keeps growing as trust builds on both sides.

 

Misconceptions That Still Persist

Operators often expect free banking because it’s their money, but that overlooks the compliance infrastructure required. Cannabis banking isn’t just deposits. Cannabis banking requires careful attention to detail. Banks need to verify operations, keep up with ongoing reporting, and make sure every transaction meets compliance standards. Yet some institutions still rely on old assumptions that the industry is risky or that operators can’t be trusted. In truth, licensed cannabis businesses are heavily regulated. Every product, every sale, and every employee is recorded and tracked, often more closely than in many other industries. When data replaces fear, the risk profile becomes far less intimidating.

 

Regulatory Lessons

From the ground up, cannabis banking already works. Licensed operators build compliant systems in accordance with the rules currently in force. Every compliant account represents millions of dollars that are traceable, reportable, and integrated into the financial system. Which is the exact outcome policymakers claim to want. Reform isn’t about possibility, it’s about consistency. Federal guidance aligned with state programs would reduce friction, expand access, and make operations easier for all businesses.

 

Looking Ahead

The next chapter in cannabis banking isn’t just about opening more accounts. Financial institutions must focus on connecting compliance, payments, lending, and reporting into systems that can scale. Manual processes won’t be enough as businesses expand across states or prepare for federal rules. Banks that treat cannabis as a long-term growth segment, rather than a compliance headache, will be the ones that succeed.

Operators also need to treat transparency as a priority. Keeping accurate records and openly sharing information with banks builds trust, supports safer communities, and makes oversight easier for regulators. These practices create stability that cash-only operations can’t provide. Businesses that put these systems in place now will be better positioned to succeed as the industry grows and regulations evolve.

 

Turning Crisis Into Opportunity- Navigating Cannabis Receivership Successfully

By , Gordon K. Sattro
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The age of cannabis receiverships is here. If you’re a creditor, operator, landlord, or investor in a troubled cannabis business, you have a choice: watch value evaporate, or step up and run a disciplined, court-supervised sale that maximizes recoveries and preserves the company as a going concern. Because federal prohibition blocks access to bankruptcy courts (cannabis companies can’t file Chapter 11 like other businesses), state-court receivership has become the go-to process for plant-touching companies to orderly market and sell assets under a receiver’s oversight.

Importantly, receivership doesn’t have to mean rock-bottom pricing. In cannabis especially,  where licenses are scarce and operations are fragile, real value is preserved or lost based on execution. From my experience, great outcomes come from controlling key variables, reducing buyer risk, and spotlighting a path to upside even in distress.

 

Green Life Business Group: Setting the Market in Cannabis Receiverships                                 At Green Life Business Group, we’ve been at the center of several high-visibility cannabis receiverships nationwide. Our team has designed competitive sale processes, driven bidder engagement, and closed transactions under court confirmation; often setting the market for what distressed cannabis assets can fetch. A few examples:

  • High Times / Hightimes Holding Corp.: We handled the receivership sale of the iconic High Times portfolio, marketing everything from the flagship West Hollywood dispensary to valuable IP like the domain 420.com. The process reportedly generated 36 offers in just 17 days, and ultimately the High Times magazine and Cannabis Cup brands were bought out of bankruptcy for $3.5 million. (The premium web domain 420.com alone attracted six-figure bids, underscoring the demand we tapped into.
  • StateHouse Holdings (Harborside / Urbn Leaf / Loudpack): In late 2024, we brokered what may be the largest cannabis receivership sale in U.S. history – the StateHouse Holdings asset portfolio. This statewide collection of 11 retail stores (Harborside and Urbn Leaf brands), plus cultivation, nursery, and processing facilities, boasted over $120 million in combined annual sales. Under our management, the court-supervised bidding (ending Jan 15, 2025) drew strong interest and set a new benchmark for distressed deals at this scale.
  • Element 7 (Multi-Site Retail & Licenses): In mid-2025, we ran an innovative Zoom auction for Element 7’s California portfolio – five retail/license sites located in Marina, Rio Dell, South San Francisco, Oakland, and Firebaugh. This court-ordered receivership sale was widely marketed with a June 30 bid deadline. By conducting the auction via Zoom (with upfront bidder deposits and pre-approved procedures), we maximized participation from qualified buyers across the state.
  • Canndescent: Our track record extends to distressed cultivation assets as well. We facilitated the sale of a 67,000 sq. ft. cannabis cultivation facility (part of Canndescent’s holdings) through receivership, highlighting that even large-scale grows can find eager buyers when packaged and presented correctly. This demonstrated our ability to execute receivership transactions not just in retail and brands, but also in high-value cultivation operations.

 

What Actually Maximizes Value in a Cannabis Receivership?                                                  Whether you’re a receiver, secured creditor, board member, or potential buyer, focusing on the following levers can mean the difference between a mediocre outcome and a great one:

Sell it as a going concern whenever possible: Keep the business operating (and in good standing) throughout the sale process. Retain key staff and continue serving customers if feasible. Buyers will pay a premium for continuity i.e., active licenses, sellable inventory, and revenue still flowing. Even if operations must pause, maintain all licenses in good standing and have a clear, budgeted plan to restart. The goal is to present an ongoing business, not a shuttered one, at auction.

  • Design a competitive process and prove it in court: Don’t run a secret or sloppy sale. Set up a structured, transparent bidding process and be prepared to show the judge you left no value on the table. This means establishing a secure data room with a universal NDA and requiring proof-of-funds from all interested parties. Launch a national marketing campaign to reach strategic and financial buyers (not just local operators). Publish a clear timeline (launch date, Q&A cutoff, bid deadline, auction date, court hearing) so everyone knows the rules. Whenever appropriate, use a stalking-horse bidder to set a floor price,  with reasonable overbid increments and a modest breakup fee that encourages challengers rather than deterring them. Finally, get the court to bless simple, defensible bid procedures up front. By the time you’re in court for approval, you can demonstrate a competitive, fair process that maximized value.
  • Package assets the way buyers underwrite: Present the business in the same way a buyer will evaluate it. That means providing the data that matters for each asset type. For retail dispensaries, highlight the license status, lease terms (and assignability), store performance (revenue, customer traffic, normalized margins), any local taxes or fees, and valuable assets like POS data or loyalty program stats. For cultivation or processing facilities, detail the canopy size and production capacity, yields and cost of goods by SKU, the state of environmental controls (HVAC, lighting, etc.), genetics or IP included, harvest schedules, and any offtake or tolling contracts in place. For brands and intellectual property, provide clarity on trademark ownership (classes and territories covered), domain names and social media handles, historical revenue attributable to the brand, and assurance of clean title (no hidden liens or infringement issues). In short, package each component as a turnkey opportunity with clear upside, so buyers can easily underwrite value without uncertainty.
  • De-risk the close ahead of the auction: One of the biggest value-killers is a winning bid that falls through due to transfer issues. Proactively remove as many closing uncertainties as possible before the auction. For example, work with landlords early to secure estoppel certificates and consent to assignment of leases; have those assignment documents ready in the data room. Coordinate with regulators ahead of time on change-of-ownership approvals or any required M&A filings – and set realistic timelines for transfer so bidders know what to expect. Map out any tax obligations, successor liability questions, or UCC lien releases that could affect the sale, and clearly communicate which liabilities a buyer will assume (or avoid). By delivering a near “plug-and-play” deal to the highest bidder, you increase bidder confidence and the price they’re willing to pay.
  • Tell a growth story buyers can model: Buyers pay up when they see a credible path to ROI. Offer a concise investment memo or executive summary that outlines the growth opportunity post-sale. This might include market comparables, the store’s customer demographics and trade area, any expansion or optimization projects in the pipeline, and even a 13-week cash flow forecast to bridge the business through the closing period. Show how the buyer can step in and quickly ramp revenue or profitability. When bidders can easily model the upside, they are more likely to bid aggressively rather than low-ball for perceived risk.

 

Why Receiverships Are Surging (and What It Means for Pricing)                                               The recent surge in cannabis receiverships is no coincidence. Legal operators are struggling under crippling tax burdens and fierce illicit-market competition, which squeeze margins and cash flow. In some cases, companies are also saddled with heavy debts or legal liabilities from ambitious mergers and expansions that didn’t pan out (for example, Gold Flora’s 2023 merger left it absorbing a partner’s $575 million burn rate). All these pressures have pushed more operators into court-monitored sales as a last resort to repay creditors.

The good news is that a well-run receivership process can still attract capable buyers and command respectable valuations – even in today’s stressed market. By removing liens and uncertainties, keeping the licenses alive, and running a competitive auction, distressed cannabis assets don’t have to sell for pennies on the dollar. With multiple bidders and a clear path to operation, receivership sales can approach fair market value rather than true “fire sale” prices. In short, even though the circumstances are distressed, the outcome doesn’t have to be, if you execute the process correctly.

 

Why Buyers Pursue Receivership Assets                                                                                          For savvy buyers, receivership sales can be rare opportunities to acquire licensed cannabis assets at significant discounts compared to traditional M&A deals. Distressed sales often reflect temporary hardships rather than long-term potential, allowing well-capitalized purchasers to swoop in at a fraction of the cost of building or buying similar assets in a healthy market. Moreover, because these transactions are court-supervised to protect creditors, the assets are typically sold “free and clear” of liens and encumbrances, giving buyers clean title and minimal legacy risk.

These court-approved auctions enable buyers to unlock hard-to-secure assets – retail licenses in limited markets, fully built-out cultivation facilities, established brands with loyal followings – that would be otherwise difficult or costly to obtain. And since many receivership sales keep the business running through closing (with licenses, staff, and customers still in place), the buyer can step directly into an operating enterprise on Day One. Essentially, you’re acquiring a functioning cannabis business at a distressed valuation, with immediate cash flow upside once you stabilize and optimize under new ownership. For those positioned to move quickly, it’s an attractive way to expand into new markets or verticals at a bargain price.

 

Bottom Line                                                                                                                              Receiverships don’t have to be fire sales. With the right brokered process, transparent bid rules, and pre-cleared closing paths, everyone wins: the court gets certainty, creditors get fair recoveries, buyers capture real upside, and the industry keeps valuable assets as going concerns rather than seeing them fall apart. That’s how you truly maximize value in a cannabis receivership.

 

What You Will Learn:

  • What is a cannabis receivership and why is it becoming more common?
  • How does federal prohibition impact bankruptcy options for cannabis businesses?
  • Why is state-court receivership the preferred process for distressed cannabis companies?
  • How can a disciplined receivership sale preserve value in a struggling cannabis business?
  • What factors determine whether a cannabis receivership sale fetches a strong price?
  • How did the High Times receivership demonstrate demand for cannabis IP and brand assets?
  • What made the StateHouse Holdings receivership one of the largest in U.S. history?
  • How did Element 7 use a Zoom auction to maximize bidder participation?
  • Can large-scale cannabis cultivation facilities, like Canndescent, successfully sell through receivership?
  • What steps should receivers take to design a competitive and court-approvable sale process?
  • How should cannabis assets be packaged to match buyer underwriting expectations?
  • Why is de-risking the closing process critical to maximizing sale value?
  • How can a well-run receivership sale prevent assets from selling for “fire sale” prices?
  • Why are receivership assets attractive to buyers compared to traditional M&A opportunities?

 

 

Making the Cannabis Industry SAFER for America

By Melissa Kuipers Blake, Osiris Morel
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After nearly a decade of conversation and education on the Hill, the Senate Banking, Housing and Urban Affairs Committee finally held a markup on the Secure and Fair Regulation (SAFER) Banking Act. Previously known as the SAFE Banking Act, the “R” was included to account for Sen. Jack Reed’s (D-RI) concerns with Section 10. The senator shared his concerns publicly on May 11 during the “Examining Cannabis Banking Challenges of Small Businesses and Workers” hearing. Sen. Reed said that Section 10’s language “would make it more difficult for federal regulators to raise the alarm about relationships with any customer that presents significant risks to the bank” and shared that such a provision is “not limited to the marijuana industry or the cannabis industry,” but that it “could allow pyramid schemes or all sorts of other interesting activity to go on without an effective response by the regulator.” Since then, he and a group of bipartisan members, including Majority Leader Chuck Schumer (D-NY), Senate Banking Committee Chair Sherrod Brown (D-OH), and Sens. Steve Daines (R-MT), Cynthia Lummis (R-WY), Kevin Cramer (R-ND) and Kyrsten Sinema (I-AZ), have worked endlessly to develop language to resolve such concerns while maintaining GOP support, leading to the SAFER Banking Act.

Number of Depository Institutions Actively Banking
Cannabis-Related Businesses in the United States
(Reported in SARS)

The difference between the SAFE Banking Act and the SAFER Banking Act can mainly be found in Section 10. Changes focus on and determines:

  • How regulators terminate bank accounts;
  • How the Federal Deposit Insurance Corporation (FDIC) develops guidance for financial institutions serving state-licensed cannabis businesses;
  • How income derived from state-legal cannabis business activity is managed;
  • That personal and political beliefs cannot impact a financial regulator’s decision making;
  • That federal banking regulators and state banking supervisors and their secretaries of Commerce and Treasury would create rules to increase access to deposit accounts and how such individuals would enhance customer relationships with rural, low- and moderate-income, unbanked and tribal communities; and
  • How the FDIC would conduct a biennial survey and report on barriers for small- and medium-sized businesses.

During the markup on Wednesday, members introduced and discussed a range of amendments related to criminal justice reform, the racial wealth gap, federal regulators and their processes, rescheduling and the opioid epidemic. In total, there were six amendments, one by Chairman Brown, as well as Sens. Mike Crapo (R-ID), Bill Hagerty (R-TN), Mike Rounds (R-SD) and two by Sen. Raphael Warnock (D-GA). Sen. Brown’s amendment, which would make technical changes to the bill, was the only amendment to prevail on a 17-6 vote.

Senate Majority Leader Chuck Schumer (center), Senate Finance Committee Chair Ron Wyden (right) and Senator Cory Booker (left)

To begin the markup, Chair Brown said that propelling this legislation is a critical step in reversing the damage done by the war on drugs and clarified that the SAFER Banking Act would create a better financial system for small and medium-sized cannabis businesses that lack access to such traditional banking services. Sen. Daines, who served as the committee ranking member in place of Sen. Tim Scott (R-SC), who was in California preparing for the Republican presidential debate, shared that although he opposes legalization or decriminalization, he agreed to sponsor and support the SAFER Banking Act because it would fix the current banking system for cannabis businesses nationwide. After hearing remarks from Sens. Lummis, Catherine Cortez Masto (D-NV) and Sinema, the committee voted on the bill, and approved its passage to the Senate floor on a 14-9 vote. Senators voting in favor of the bill were Brown, Tester, Warren, Reed, Menendez (by proxy), Smith (by proxy), Warner, Fetterman, Cortez-Masto, Sinema, Van Hollen, Lummis, Cramer and Daines, and voting against the measure were Sens. Warnock, Scott (by proxy), Crapo, Tillis, Kennedy, Haggerty, Vance and Britt.

After the vote, Sen. Jeff Merkley (D-OR) thanked Sen. Rand Paul (R-KY) and former Republican Sen. Cory Gardner (CO) for their early efforts and for bringing the legislation and issue to the chamber’s attention and concluded that he hopes to have a robust discussion with the full Senate chamber.

With the bill out of committee, it heads to the Senate floor for additional input, discussion and potentially a vote. Majority Leader Schumer has said he intends to bring the SAFER Banking Act to the floor “with all due speed” and noted that he is committed to attaching Rep. Dave Joyce’s (R-OH) Harnessing Opportunities by Pursuing Expungement (HOPE) Act and Rep. Brian Mast’s (R-FL) Gun Rights and Marijuana (GRAM) Act to the final legislation. Sen. Schumer also shared that such provisions would address the war on drugs, bolster social equity and criminal justice reform and protect Second Amendment rights for medical cannabis patients.

When the SAFER Banking Act will receive floor time remains unclear, but Leader Schumer has made numerous representations that he would like to see it done this year.

Soapbox

Cannabis Industry Banks Still at Risk Without Passage of the Safe Banking Act

By Leslie Bocskor
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Here we are again, crossing our fingers, hoping that the Senate will approve the passage of the Secure and Fair Enforcement Banking Act (SAFE Banking Act). This Act would provide banks with regulatory protections, allowing them to offer critical financial services to cannabis businesses without risking the loss of their banking charter.

As the 2024 elections loom, the stakes have never been higher for passing the SAFE Banking Act.

Cannabis Legalization is On the Rise

As of August 2023, 40 states, four territories and the District of Columbia have legalized medical or adult use cannabis. While some states have moved more slowly, the entire West Coast (including Nevada and Colorado) has voted to pass laws allowing the sale and purchase of adult use cannabis. Most of the East Coast has followed suit; New York, Pennsylvania, New Jersey and Massachusetts have all voted to regulate cannabis. It has become evident that the majority of U.S. citizens are now comfortable with legalized cannabis (156 million people live in jurisdicitons that have legalized adult use).

Banking Roadblocks for the Cannabis Industry

Under current federal policy, banks and other large financial institutions face regulatory restrictions that make it challenging to provide the most basic services to local cannabis companies, regional cannabusinesses and MSOs (Multi-State Operators).

Federal anti-money laundering laws and related record-keeping regulations, such as the Bank Secrecy Act (BSA), have presented complex compliance protocols that prevent banks from meeting the business needs of local growers, manufacturers and dispensaries. Local cannabis business owners are therefore put in a difficult position, as they must balance daily business activity against the potential dangers of operating as a cash-only business.

How Would the SAFE Banking Act Help Banks Serve the Cannabis Industry?

The proposed SAFE Banking Act would protect banks from federal penalties for offering their services to cannabis businesses in states with regulated cannabis industries. Critically, the bill would shield banks from losing their deposit insurance. Without reform through the SAFE Banking Act, financial institutions will remain essentially prohibited from working directly with legal cannabis companies.

What Will It Take to Pass the SAFE Banking Act?

While the bill has successfully passed in the House of Representatives seven times, it has yet to pass in the Senate. Considering the current political climate, the clock is ticking to finally pass the SAFE Banking Act in the Senate.

Policymakers may need to introduce the Act as a stand-alone bill that outlines clear objectives and specifically addresses the issue from a public safety perspective. Cannabis is a hot-button issue, so adding additional legislation will muddy the water and make it easier for Senate members on the fence to vote against the bill.

Cannabis industry representatives and political allies must be strategic in navigating the bill’s potential passage and take the process step by step. First, the SAFE Banking Act must pass to allow cannabis businesses the opportunity to stabilize, grow and prosper. As the sector grows stronger and more accepted by mainstream America, more progressive bills can be introduced and will have a greater chance of successful passage in the House and Senate.

The SAFE Banking Act is an Issue of Public Safety

Every day the Senate chooses to sit on their hands, they put more Americans in harm’s way. This is unacceptable.

Because dispensaries and other cannabis businesses must process daily transactions without basic banking services, they often accumulate large amounts of cash. Dispensaries are, therefore, frequent targets for criminals. Even as the cannabis industry matures and contributes significant tax dollars to State coffers, banks and financial institutions have no choice but to sit with their hands tied, watching with horror as organized criminals literally take aim at dispensary staff.

The passage of the SAFE Banking Act is literally life and death for many cannabis industry employees. How many workers and customers must suffer harm before the Senate wakes up and passes this critical bill? Regardless of their stance on cannabis, members of the Senate must do their jobs, heed the will of the American people and pass the SAFE Banking Act to rectify this increasingly dangerous situation for the good of their constituents.

Digital Assets & Cryptocurrency in Cannabis

By Itali Heide
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As the cannabis industry experiences a significant shift toward general acceptance and mainstream adoption, new modes of operation are popping up everywhere. The evolution and expansion of the industry beg for constant innovation, and the integration of NFTs and cryptocurrencies as payment options is at the crossroads between tech and cannabis.

Crypto and NFTs have grown in popularity in recent years. Non-fungible tokens are an interesting asset in the art and collectibles world, while cryptocurrency has made a name for itself by providing a unique kind of financial independence. More and more payment processors are embracing these new payment methods, and the cannabis industry is also slowly welcoming them.

In order to fully understand the cannabis-crypto connection, Swaroop Suri, founder of Melee Dose, a cannabis brand that’s been embracing NFTs and crypto as payment options, shared some insights. Their innovative approach to creating unique cannabis experiences with technology and creative branding makes them a pioneer of this movement.

What’s Happening with Cannabis and NFTs?

NFTs and cryptocurrency are exciting developments in an industry that carries the reputation for having a rocky relationship with the banking industry. The legal gray area surrounding the connection between cannabis businesses and the banking industry has given way to an onslaught of challenges, with many banks shunning cannabis because of its federally illegal status. While traditional banking can limit cannabis companies’ access to basic financial services, the decentralization that’s characteristic of blockchain opens up many doors.

In recent years, different brands have tested the waters by using cryptocurrencies and NFTs to enhance marketing and offer alternate payment options. While it’s still early in the game, trends are starting to appear.

Bitcoin quickly became one of the more popular cryptocurrencies

One of these trends is using NFTs in marketing and branding, creating unique digital assets that can be collected. This gives an air of exclusivity, creates more immersive experiences, and helps forge a brand identity. NFTs are often a great tool to engage with customers and create a sense of community.

Melee Dose recently started integrating NFTs from Bored Ape Yacht Club (BAYC) into product packaging and branding. This has allowed the brand to offer unique experiences, foster community engagement, enhance storytelling and demonstrate adaptability to an ever-changing world.

“This collaboration merges the worlds of fashion, art and technology, providing our customers with exclusive “IRL” products incorporating digital assets and driving brand affinity”, says Swaroop Suri. “By embracing the digital revolution and connecting with the influential BAYC community, we aim to redefine consumer experiences and build lasting relationships with our audience.”

Crypto Payments Aren’t Futuristic Anymore

Payment is another trend to look out for. Cryptocurrencies are becoming more accepted in many big industries, including cannabis. With traditional banks limiting access to banking services, crypto allows cannabis companies to offer decentralized and secure payment options.

Cryptocurrency offers more enhanced privacy than traditional payment methods, which is great for those who want to stay under the radar. Lower transaction fees are another plus, as a decentralized system is more flexible. The speed of crypto payments is also an enticing feature, as payments are usually processed more quickly than traditional payment methods.

Swaroop Suri, Founder of Melee Dose

So, how are brands accepting crypto as payment? Is it safe? Melee Dose started accepting cryptocurrency payments on their e-commerce store by partnering with Coinbase Payments, a leader in the crypto industry with a strong reputation and ease of integration.

Cryptocurrency may seem perilous to those who don’t know much about it, but siding with the right company can help ease those fears. Addressing concerns about crypto volatility, Suri “opted for a feature provided by Coinbase Payments that allows for immediate conversion of cryptocurrency payments into our local currency, ensuring stable revenue despite market fluctuations.”

By working closely with reliable payment partners like Coinbase Payments and implementing necessary features, companies like his are able to successfully overcome crypto roadblocks, providing customers with increased flexibility and convenience.

The Future of Crypto, NFTs & Cannabis

The future of integration between cannabis, crypto and NFTs is exciting and always on the move, meaning there are opportunities constantly arising and challenges ahead we have yet to tackle. As cannabis legalization continues to evolve, we might expect changes in regulatory frameworks that impact how cryptocurrency is used in the industry. While we can’t say what those changes might be, the fact that NFTs and crypto have become mainstream indicates a clear adoption, as the industry finds ways to integrate them. From blockchain integration and creative marketing to payment options and immersive experiences, they are here to stay.

Swaroop Suri and his team might’ve gotten in on the game early, but they know the future is expansive: “It’s possible that NFTs could become a significant part of cannabis marketing strategies in the future,” He says. “The cannabis industry can use NFTs in various ways, such as tracking crops and using intellectual property to promote products through packaging artwork, which is what our team at Melee Dose has accomplished.”

NFTs won’t stop there. “There is a possibility to use NFTs for establishing VIP programs that offer exclusive discounts and access”, Suri says. “The ownership of an NFT could grant special privileges and perks to customers when shopping with an e-commerce company, fostering a deeper connection with the brand and community and leading to customer loyalty in the long run.” NFTs offer diverse possibilities for cannabis brands to improve their marketing techniques and get creative.

When it comes to crypto payments, brands will surely continue to add crypto as an option in addition to merchant processors. Highly-regulated industries like cannabis can find many benefits in crypto, as experienced by Suri: “Accepting cryptocurrency can mitigate some of these issues by providing an alternative payment option that is not subject to the same restrictions as traditional payment methods.”

Final Thoughts

The excitement surrounding crypto and NFTs is understandable, and as the cannabis industry introduces new opportunities for those who are at the intersection of these two global forces, companies everywhere are changing their relationship with technology.

There are other brands hopping onto the this train as well. Household cannabis brands and popular companies like Plain Jain, Highland Pharms, American Green and Pharma Hemp are just some of the many that have begun accepting crypto as payment.

As the industry continues to evolve and grow, staying ahead of the curve and embracing technology with critical thinking and environmental consciousness is key. As a new, dynamic and exciting space with as many opportunities as it is filled with challenges to tackle down the road surrounds us, the one thing we know for sure is that this is just the beginning.

A Guide to Dispensary Insurance

By Itali Heide
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As a business owner, insurance is always a must. If you are interested in entering into the cannabis industry or you already have, it’s important to know what to expect when it comes to insuring your cannabis-related business.

That’s why we’ll be exploring what dispensary insurance is, different options for business owners and general advice regarding dispensary and other CRB insurance.

What is Dispensary Insurance?

Insurance for cannabis-related businesses refers to policies that protect the business against risk. This can include dispensaries, cultivation centers and testing labs – all of which require different levels of coverage and liability.

We spoke to Alexander Marenco, an insurance broker from Marenco Insurance, who explained what dispensary owners should know before seeking out insurance. Marenco says it’s similar to shopping for insurance for other businesess. “You need to have full details of the business and location to receive a quote.” He adds. “The applications will ask questions such as location, renovations, or improvements to the location, ownership information, payroll details, and sales or projected annual sales.”

How is Dispensary Insurance Different From Other Forms of Business Insurance?

Because non-hemp-derived cannabis is still considered a schedule one controlled substance under the Controlled Substance Act, cannabis insurance can be more expensive than regular insurance for non-cannabis businesses. Because of the risks associated with being considered a potential retailer of a controlled substance, liability policies and other options can cost a pretty penny.

budtenderpic
The cash-only nature of the business makes insuring dispensaries more costly

Additionally, when asking Marenco about how dispensary insurance differs from other brick-and-mortar retail insurance, he says: “With more states increasingly legalizing medicinal and recreational marijuana, insurance carriers have started to open risk acceptability. However, since marijuana is still federally illegal, businesses will find it difficult to find multiple quotes from different carriers.”

Types of Insurance Available for Cannabis-Related Businesses

What kind of insurance is available for cannabis-related businesses? Let’s find out.

First off, it’s important to keep in mind that CRBs are at risk for a lot of things: workplace accidents, damage to property, theft, general liability and product liability. Plus, the fact that most dispensaries work on a cash-only business model until the Secure and Fair Enforcement (SAFE) Banking Act is approved by Congress, CRBs tend to handle big amounts of cash, further putting them at risk of theft and liability. CRB insurance can be as low as $350 and as high as $7,500 depending on the type of business and policy.

Here are some of the most common types of insurance for CRBs and what they cover:

  • General liability: third-party claims for bodily injury, property damage and reputational harm.
  • Commercial property: damage to a business-owned property.
  • Professional liability: third-party accusations of negligence and mistakes.
  • Workers’ compensation: employees’ medical bills and lost wages due to injury or illness.
  • Inland marine: damage or theft of business-owned property in transit.
  • Crop: costs from damage to seeds and plants.

With so many things to watch out for, insurance for cannabis businesses and dispensaries isn’t cheap. Here, Marenco says what CRB owners can do to keep their premiums as low as possible:

A smart safe like this one can help secure cash handling

“Premiums are primarily based on sales (actual or projected). After the term expires, the insurance carrier will conduct an audit for the prior term to confirm the information from the application. The audited discrepancy will adjust the next term’s sales figures. Dispensary insurance will typically be placed through an excess & surplus market which do not provide traditional discounts.”

So, in essence, the best thing a dispensary owner can do is be honest about their projections.

Navigating premiums can be a detailed process, as we learned when speaking to Jesse Giffith, an owner of Smokeless CBD and Vape: a chain of retail shops across the twin cities Minneapolis–Saint Paul, Minnesota:

“Our shops carry insurance that has been offered with a modified rate for vape retailers. This route was not as straightforward as some traditional retail insurance options, but may offer benefits, and a better fit for coverage than other dispensary insurance options.”

A Growing Number of Dispensaries Across America

With the growing legalization and normalization of adult use, medical and hemp-derived cannabis across the nation, it should come as no surprise that the number of dispensaries across the country grows exponentially.

In 2021, the cannabis market in the U.S. was valued at 10.8 billion dollars, with an expected annual growth of 14.9% annually. This is a sign of what’s to come. Cannabis may be an industry that’s been considered taboo for decades, but the growth shows the growing acceptance of the plant for medical and adult use reasons.

Insurance providers remain cautious as cannabis laws are still in flux.

With that growth comes a greater need for insurance providers, opening the door to the possibility that these two industries will grow in tandem. The future may bring a greater variety of options for coverage at cheaper prices. But for the time being, insurance providers remain cautious as the fate of federal and local cannabis laws are still in flux.

Are There Limited Carriers that Issue Dispensary Insurance?

Every CRB needs insurance, just like any other type of establishment, business or company. The issue within the cannabis industry is that there is still a limited insurance market, with insurers willing to provide insurance constantly exiting and entering the market. Plus, the overall capacity and variety of policies that cover different types of risks are limited. Lastly, it can be difficult to use CRB insurance when you read between the lines of the policy. Because cannabis with THC is still federally illegal (excluding hemp-derived cannabis products containing less than 0.3% THC), insurers can negate coverage when a loss or claim occurs.

Because of the complications that may arise even if you do have insurance, Marenco offers some advice for dispensary owners that are searching for the right insurance option for them: “Before shopping for insurance make sure you have all your licenses and are in full compliance with all regulations. Insurance carrier’s requirements from the state. Additionally, consider different coverage options.” He continues. “At a minimum, a business needs general liability insurance. Insurance companies can also consider covering business property including inventory, betterments, and improvements to a rented space, among others. When shopping for insurance make sure your agent reviews different coverage options.”