![]() ![]() ![]() She also frequently taps personal experience, comparing the process of buying fresh produce as a CSA member to purchasing similar items at a big box store. Judge, whose academic work shows a keen interest in finance and regulation, writes in a clear and insightful voice, drawing meticulously from academic journals and sources that include reports from the US Department of Agriculture, research from the National Bureau of Economic Research and the US Federal Reserve, as well as detailed accounts from the public writings of members of community supported agriculture (CSA) groups, which allow consumers to buy directly from local farmers. In more forceful passages, she charges the most dominant intermediaries with contributing to loneliness, isolation, and lack of “human flourishing” around the world. But for Judge, costs go beyond mere economic hazards and represent an artificial intermediary that diminishes the integrity of direct exchange. The costs of middlemen are multiplying, and appearing in places where we might not expect, including higher fees paid to realtors for house sales. In time, this enables them to expand their domains, entrench the need for their services, contort consumer decision making, and otherwise promote their interests at the expense of those they are meant to serve.” While some expenses, such as licensing fees, are never going to go away, eventually cannabusinesses will be able to access the banking industry and that, at least, should cut down on some of the costs of doing business.Judge writes, “The very attributes that make middlemen good connectors also give them outsized power. These can cost thousands of dollars every month.Īs the cannabis industry expands, the amount of money expended on these extras will grow proportionally. They need custom POS systems that integrate with mandated governmental systems and specialized software that tracks the details of every sale to comply with state laws. A generic retail point-of-sale system won’t work for most cannabusinesses. Then there’s the day-to-day operating costs. In Massachusetts, for example, edibles labels must contain 20 separate data points, including a list of ingredients and the cannabinoid profile, plus a 49-word warning statement, some of it in all caps, which leaves precious little room for brand building. Labeling guidelines differ from state to state but generally are fairly onerous and expensive. That can be costly if the shop happens to be in a state that doesn’t allow retailers to produce their own products. Once a shop is up and running, an owner still has to stock the shelves. But as long as cannabis is a Schedule 1 drug (at the same level as heroin and methamphetamines) access to banking will be limited. Some states - and even a handful of senators - are considering laws to allow state-charted banks to work with the cannabis industry. One Colorado credit union was required to file 7,000 reports for 220 cannabusinesses, as opposed to 226 reports for its other 33,000 customers combined. But those often charge fees of as much as $2,000 a month because there is little competition but also because of the overly burdensome paperwork requirements. In some states, cannabusinesses can use credit unions or special cannabis banks that are cropping up specifically to meet their financial needs. So paying the electric bill, for example, requires a trip to the actual location where payments are taken, during the hours when it is open and waiting in line to make a payment and receive a receipt. ![]() That means owners must do everything in person. ![]() That’s led to an estimated 70% of cannabusinesses being unbanked, which means not only are most of their transactions in cash but they also have to pay bills, salaries and even income taxes in cash. The major credit card companies themselves also prohibit using their cards for cannabis purchases. But one industry estimate puts opening a cannabis outlet at a minimum of $250,000, with an additional $65,000-plus for security, including multiple camera feeds, weapon detectors, roll-down steel doors and motion-triggered warning systems inside and out since cannabis is still a mostly cash business.īecause cannabis is still federally illegal, banking laws restrict access to banks and credit cards. Opening a clothing boutique costs between $50,000 and $150,000, for example. Setting up the actual retail space isn’t cheap either. And you have to find a lawyer first – some won’t take on cannabis customers. Then there’s the specialized legal work required when dealing with a commodity as highly regulated as cannabis, which can run upwards of $50,000 annually. ![]()
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