CDTFA Cannabis Tax Guide for 2021

CDTFA Cannabis Tax Guide for 2021

The CDTFA (California Department of Tax and Fee Administration) Cannabis Tax Law is a set of regulations that were put in place to ensure cannabis businesses are complying with all state and local tax laws. This law was created by the California Department of Tax to govern the cannabis tax revenues, which includes both medicinal and adult-use marijuana. It also covers activities such as cultivation, manufacturing, distribution, sales, and use taxes.

Throughout this guide, we’ll provide an overview of the Cannabis Tax Law for 2020-2021. Whether you’re worried about cannabis tax revenues you’ll need to report or other revenue numbers, you’ll have a better understanding of how businesses in the cannabis space can make the most of the revenue they earn with each sale.

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Latest Updates on Cannabis Tax in California

CDTFA has determined that an 80% mark-up will be applied to the average market price of cannabis or cannabis products sold to a retailer in California in an arm’s length transaction.

The rate was set at 60% for 2019, but it is now up 33%. Distributors must adhere to the mark-up rate.

Basic Information on Cannabis Business Tax on California

Below is some basic information you should know before/while running a cannabis business in California.

Cannabis Excise Tax

Since January 1st, 2018, you will be charged a 15% cannabis excise tax for any cannabis sales made at the retail cannabis shop or dispensary. This tax is calculated by taking an average market price as your base and adding that percentage charge to it.

Cultivation Tax

You have to pay a ‘Cultivation Tax’ on any harvested cannabis product that enters the commercial market.

When cannabis plants are first harvested, they’re categorized as either “cannabis flower,” “cannabis leaves,” or “fresh cannabis plant.” The cultivation tax is imposed based on these categories and weight.

To qualify for the “fresh” plant category, a California grower must have their cannabis weighed within two hours of harvest.

Cannabis Business Registration

California Department of Tax and Fee Administration offers online registration on sales and use tax account. The service is available 24 hours a day, 7 days a week. For more information and register, click here.

In addition to CDTFA registration, you’ll have to collect tax permit(s) from other responsible authorities. This is a requirement for obtaining a cannabis business license(s).

For example,

Be sure to contact your city or county government office to learn more about any that you might need for operating the business in the area.

Seller’s Permit

No seller’s permit is required in California if you don’t sell tangible personal property. However, as per the requirements for a commercial cannabis license, one must provide a certification letter stating that no such permit is needed before they can be legally licensed to operate their business within this industry.

Obtaining such certification is not that difficult. You’ll need to email all the credentials to the California tax authority and declare that you are not engaged in any transaction of tangible personal property. After reviewing all the information, the authority will mail you the certification letter.

Tax Returns

Sales & Use Tax Return

As a licensed cannabis merchant, you have to file sales and use tax returns regularly. This will show the sales and help the authority to verify tax revenue.

If you incur no taxable transactions, you are still required to file your sales and use tax return, and report your business activities to the CDTFA.

Here you can find the deadlines for submitting tax returns.

Cannabis Tax Return

If you are a distributor of cannabis products, you have to file your cannabis tax return electronically. The tax return should include both the cannabis excise tax and the cultivation tax.

Online Services

The California Department of Tax and Fee Administration offers a wide range of online services to easily report cannabis sales, revenues, and taxes, especially during the pandemic. Here’s where you can find the link to all the video tutorials on their online services.

Cash Payment

Though the CDTFA intends to conduct its activities online as much as possible, it offers some exemptions for those who prefer paying their cannabis taxes in cash. To qualify for this exemption, they require you to make arrangements with one of their offices and explain why a change is necessary from the No Cash Policy before giving them your money.

If you are looking to pay in cash, call the office for an appointment at least 21 days before your due date.

For any amount over $10,000 for sales and use tax accounts or monthly cannabis tax account liability greater than $20,000 subject to EFT payments because they exceed those thresholds. If not paid electronically, will be assessed 10% penalties on top of whatever fees were already owed.

However, if you believe your payment was assessed as wrong, you can request relief from this penalty online.

Cannabis Tax and Fee Administration- Distributors

A distributor is a person who purchases cannabis from licensed growers/manufacturers or one another then redistributes it to their various endpoints, such as retailers on behalf of themselves and others. A microbusiness license can also be issued if they follow all distributor requirements.

Distributors will have to use the mark-up rate to determine the average market price of cannabis or cannabis-related products.

Below are the responsibilities of cannabis distributors:

  • Collect the cannabis cultivation tax from cultivators and manufacturers.
  • Collect cannabis excise tax from cannabis retailers.
  • Provide invoices or receipts to the businesses from which the cannabis taxes were collected.
  • Electronically submit both the sales and use tax and cannabis tax returns and pay the due amounts to the CDTFA.

Cannabis Tax and Fee Administration- Retailers

Cannabis retailers are those who sell cannabis products directly to the final consumers. A microbusiness can conduct retail sales if it complies with all the requirements of the cannabis retailers.

If you are a cannabis retailer, the CDTFA requires that you:

  • Register as a cannabis retailer with the CDTFA
  • Pay all taxes and fees owed to the CDTFA
  • Collect tax from consumers on every retail sale of cannabis or cannabis products, including any applicable local sales tax. The latest updates for 2021 are that retailers must collect both state excise tax (15%) plus retail sales taxes (7.25%).
  • Be sure not to remit the cannabis excise tax on the sales and use tax returns. Instead, pay the cannabis excise tax that is due to your distributor.

Taxes on Selling and Donating Marijuana of Medical Purposes

Medical marijuana purchases are not subject to the retail sales tax but still have a 15% cannabis excise tax. Municipalities can also slap on their own taxes.

Sales of cannabis and other related products are subject to sales tax unless they provide a Medical Marijuana Identification Card indicating they are qualified patients or primary caregivers. Along with this card, they will also need a government-issued identification card.

Beginning March 1st, 2020, in California, cannabis retailers are allowed to donate free medicinal products as a way of saying thank you for being dedicated customers. This applies only when given away without charge and does not apply if the customer pays some form of the fee before receiving the product (i.e., donation box). Medical Marijuana is exempt from taxes when donated by retailers.

Cannabis Tax and Fee Administration- Cultivators & Manufacturers

A cannabis cultivator is a person engaged in planting, harvesting, growing, drying, grading, trimming, or curing cannabis. A manufacturer is a person engaged in manufacturing cannabis or cannabis-related products in a fixed location and packages or repackages them or labels or relabels its container.

Microbusinesses involved in any such activities (cultivators or manufacturers) must comply with all the requirements as cultivators or manufacturers.

Cultivators shall pay the cultivation tax to the manufacturers/ distributors. However, they shall file sales and use tax returns and pay any tax due to the CDTFA.

Manufacturers shall pay the cultivation tax to the distributors upon collection from the cultivators.

Cultivators of cannabis and cannabis products in California have to pay a cultivation tax. As discussed above, this ‘cultivation tax rate is determined based on the weight and category of the products.

Effective from January 1st, 2020, the cultivation tax rates are as follows:

  • Cannabis Flower- $9.65 per dry-weight ounce
  • Cannabis Leaves- $2.87 per dry-weight ounce
  • Fresh Cannabis Plant- $1.35 per ounce

For the latest updates, click here.

CDTFA Response to COVID-19 Pandemic

The CDTFA has created a cannabis tax guide for COVID-19. This new pandemic is going to affect the entire world and will devastate many lives. To make the lives easier for the cannabis businesses in California, the CDTFA is offering extended filing and payment deadlines.

To find the extended payment and filing deadlines for COVID-19, please click here.

California is one of the most regulated states in America, and it’s no different when it comes to the cannabis industry. The CDTFA has been doing its best to ensure a fair play situation for all parties involved, which means that you need to be educated on how they operate as well!

To help make things easier for everyone, we compiled this guide with everything you need to know about filing your taxes as a cannabis company in California.

Hopefully, this guide gave you a good understanding of the basics of filing with CDTFA. If not, feel free to contact us with any questions you might have!

Cannabis Excise Tax: What Should You Know?

Cannabis Excise Tax: What Should You Know?

California cannabis excise tax is an interesting subject for several reasons. One of which, is how it impacts theft and robbery that results in losses.

In the cannabis industry, theft and robbery are major problems. As cannabis becomes more accepted by states across the country, thieves have found new ways to steal from dispensaries and grow facilities.

However, there is some good news: if you’ve paid excise tax on your product that was lost or stolen due to crime, then you might be eligible for a refund under certain circumstances!

In this article, we’ll discuss CA cannabis excise tax, where it’s applicable, and what deductions are allowed for losses due to crime.

Looking to handle your financials while facilitating compliance? We help our clients grow their businesses without risking costly infractions! CONTACT US TODAY to learn what we can do for your operation.

CA Cannabis Excise Tax Insight

CA Cannabis Excise Tax Collection on Retail Sales

At the start of 2018, cannabis distributors had to begin calculating and collecting the cannabis excise tax from cannabis retailers on cannabis or cannabis products they sell or transfer. This involves the distributor calculating the cannabis excise tax based on the “average market price,” which means taking the CDTFA’s predetermined mark-up rate and applying it to the wholesale cost of cannabis and cannabis products.

At this point, the current mark-up rate is displayed under Cannabis Taxes on the CDTFA’s Special Taxes and Fees Rates Page.

CA Cannabis Retailers Cannot Apply Excise Tax to Free Medicinal Cannabis

If you’re giving away medicinal cannabis for free, use tax is still due on the cost. Cannabis retailers are not allowed to give away cannabis or cannabis products unless given permission by the Bureau of Cannabis Control (BCC). This is the agency responsible for administering the cannabis licensing activities for distributors and retailers.

If you’ve received permission to give cannabis or cannabis products away for free, the cannabis excise tax will not apply to you. However, if you are giving it away, you will owe use tax on the purchase price of the cannabis or cannabis products.

Discounted Retail Sales Warrant Cannabis Excise Tax Collection by Distributors

Cannabis retailers must collect cannabis excise tax from their customers. This is regardless of whether you’re selling cannabis or cannabis products at retail.

With this being the case, you’ll need to collect the same amount of cannabis excise tax from customers that you paid to your distributor.

CA Cannabis Excise Tax and Losses Resulting from Robbery and Theft

Cannabis Excise Tax for Cannabis Retailers

Cannabis retailers must pay the cannabis excise tax to distributors based on the average market price of the cannabis or cannabis products sold or transferred to them. But, if you’ve paid your cannabis excise tax to your distributor and those products were stolen after, you can request a refund of the tax from your distributor.

Of course, you’ll have to give the documentation substantiating the theft to your distributor.

For documentation purposes, some of the options include insurance claims, police reports, and other forms of documentation proving your products were stolen. Once you’re issued a refund, your distributor must give you a receipt showing how much cannabis excise tax was refunded.

All retail cannabis or cannabis product sales are due a 15 percent cannabis excise tax. Exemptions or deductions of the cannabis excise tax for the loss of proceeds resulting from theft of cash do not exist.

Cannabis Excise Tax for Distributors

Distributors need to collect the cannabis excise tax from cannabis retailers they’re supplying with cannabis or cannabis products. The cannabis excise tax doesn’t apply to cannabis or related products sold or transferred to cannabis retailers that are stolen from the retailer.

If theft of cannabis or cannabis products occurs at the retail level, and the retailer has already paid the distributor the cannabis excise tax, the retailer can request a refund for the cannabis excise tax paid. This refund comes from the distributor.

For distributor records, and for any claim for refund that gets filed, the distributor must get appropriate documentation from the cannabis retailer. Then, the distributor must give the cannabis retailer a receipt or comparable documentation indicating how much of the cannabis excise tax was returned to the retailer.

If the distributor has already reported and paid cannabis excise tax to the CDTFA, and needed to return it to the retailer due to theft, the distributor can report the amount returned on their next cannabis tax return. This will be reported on the line that’s labeled “Less excess tax collected, if any.”

The other option is to submit a CDTFA-101, Claim for Refund, to report the excess cannabis excise tax that was paid to the CDTFA and later given back to the cannabis retailer. Supporting documentation of the loss that was given to you by the retailer is essential for this to work.

Cultivation Tax for Distributors

All cannabis entering the commercial market has cultivation taxes due, even if the cannabis is lost as a result of theft. The cannabis must pass the necessary testing and quality assurance review. But if the cannabis is stolen before entering the commercial market, cultivation tax isn’t due on it.

So, if a distributor already collected the cultivation tax on cannabis that hasn’t been introduced to the commercial market, they must return the cultivation tax to the originating cultivator. However, if the cultivation tax cannot be returned to the cannabis cultivator, the distributor is responsible for reporting and paying the cultivation tax to the CDTFA.

Sales & Use Tax

Regardless of theft of cash, sales tax is required on all taxable sales. Losing merchandise because of theft does not result in a deductible for sales and use tax purposes because there was no sale.

However, the loss of merchandise from theft could impact your cost of goods sold (COGS). Thus, you will need to maintain appropriate documentation just in case there’s an audit.

Documentation Insight

The right documentation is essential; this is how you’ll support the losses incurred from theft. For sales and use tax, cultivation tax, and cannabis excise tax, you can use various forms of documentation. This includes but is not limited to:

  • Police reports
  • Insurance claims
  • Reports from private investigating agencies

If you experience cannabis inventory losses, you should record them in the California Cannabis Track-and-Trace (CCTT) system. For times you have losses resulting from theft, it’s ideal to contact the Bureau of Cannabis Control to determine the requirements in the CCTT system.

Interested in scaling your cannabis operation with expert assistance? We’ll organize your financials and ensure you don’t pay more than you owe every step of the way!

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How to Open a Dispensary in New York: What Should You Know?

How to Open a Dispensary in New York: What Should You Know?

Curious about how to open a dispensary in New York? You’ve come to the right place.

Here’s where you’ll find everything you need to know, including the most up-to-date news and insight you need to open a cannabis business in New York.

In March 2021, New York legalized adult-use recreational cannabis. The state has officially joined the ranks of states like Washington and California in legalizing marijuana for recreational use.

The state governor’s office says the entire approach to regulating New York cannabis will involve:

  • Creating an office of “Cannabis Management,” which will specialize in regulating medical, adult, and hemp programs
  • Social equity licensing opportunities through an economic equity program
  • Egalitarian adult-use market structure that will make it easier to access capital for cannabis businesses
  • Technical assistance and incubation for equity entrepreneurs
  • Efforts to resolve damage to communities that have been disproportionately impacted by prohibition.

Over the next year, we expect more information to surface regarding how to open a dispensary in New York. This should include the requirements, application process, and all associated costs.

As we gain more insight, we will create more articles and list them as resources in this article.

Interested in opening a cannabis dispensary in New York? We’re here to help!

CONTACT US NOW to get your dispensary organized and compliant in preparation for New Jersey’s budding adult-use market!

The New York Times has High Hopes for New York's Cannabis Industry

The New York Times has High Hopes for New York’s Cannabis Industry

The NYT reports that the recently approved bill is likely to create a $4.2 billion cannabis industry in the state.

While using marijuana recreationally in the busy state is now legal, sales will become legal once the state implements regulations.

New Yorkers can now have up to three ounces in hand for recreational use or 24 grams of concentrate. If you’re 21 or older, you can now use, smoke, ingest, consume cannabis.

Cannabis consumers are allowed to store up to five pounds of cannabis, as well. However, they’ll need to take “reasonable steps” to ensure it’s secure.

People can now legally smoke elevated plant matter in public where tobacco smoking is legal, setting a new precedent for consumption in New York.

We expect this will encourage dispensary success once rules are in place.

medical marijuana program new york ny

Medical Marijuana Program in NY

Medical cannabis use has been legal in New York for quite some time now.

While it wasn’t until recently that the state decided to legalize recreational cannabis, the state’s medical program has been in place since 2015.

The Department of Health started accepting applications for organizations interested in getting licensed to cultivate, dispense, and manufacture medical use cannabis and medical marijuana products.

Only five registered organizations would be granted licenses for each of the three categories, but the deadline is long passed (June 5th, 2015).

Allowing up to five organizations in this space means many entrepreneurs interested in opening a retail store will have to consider other business plans.

While Andrew Cuomo has signed legalization into effect, each of the license types will only allow so many licensee holders.

Whether for adult use or medical marijuana, dispensaries need to have the law on their side.

Ultimately, this will involve coming up with a business plan and, if the initial registration proves fruitful, adhering to the regulations put in place by the Office of Cannabis Management.

Due to the limit on the number of registered organizations operating dispensing facilities state-wide, we can expect each registered organization to operation with marijuana regulation in mind.

A cannabis business license is not easy to get. For anyone running a dispensary in New York, marijuana laws will be essential to follow in order to avoid prosecution from the Cannabis Control Board of New York state.

Back in 2015, 43 applicants applied for licenses to manufacture and dispense medical cannabis. The law only allowed these organizations to operate up to 4 dispensaries state-wide, though.

The state has not issued new medical licenses since then. However, New York has been working on state government proposals to initiate full legalization.

Since then, the state’s medical marijuana program began accepting applications for a license in one or more of these areas: Cultivation (up to four state-wide cultivation site licenses), Dispensing (four medical use dispensary licenses), and Manufacturing (three manufacturing facilities).

Is New York’s market significant?

New York’s market could be the next California. This sector is valued in the billions (New York Comptroller believes the state could earn a whopping $3.1 billion in revenue).

The New York cannabis market is the second-largest, and when considering the state’s population, wealth, and cultural acceptance, the opportunity here is massive.

Will localities have cannabis restrictions and laws in place?

Counties that will not allow marijuana sales exist. Some of these include Chemung, Nassau, Putnam, Suffolk, and Columbia. Oneida and Cattaraugus counties might not allow sales, too. However, these counties haven’t implemented laws at this time.

Who can buy through New York state’s medical marijuana program?

Patients suffering from certain severe medical conditions can receive certification from a licensed practitioner to access medical marijuana products. This is how one can obtain a registry identification card. Once issued, registrations remain valid for two years.

Here’s a list of the qualifying conditions you’ll serve as you dispense medical marijuana. Each qualifying condition in this list is another reason why it’s essential to legalize cannabis at the federal level:

  • Cancer
  • HIV or AIDS
  • Amyotrophic Lateral Sclerosis (ALS)
  • Parkinson’s disease
  • Multiple sclerosis
  • Spinal cord nerve injury with intractable spasticity
  • Epilepsy
  • Inflammatory bowel disease
  • Chronic pain
  • Opioid alternative for pain that degrades health and functional capability
  • Neuropathy
  • Huntington’s disease
  • Post-traumatic stress disorder
  • Substance use disorder

Other associated or complicating conditions that qualify for medical marijuana use include:

  • Cachexia or wasting syndrome
  • Severe or chronic pain
  • Severe nausea
  • Seizures
  • Severe or persistent muscle spasms
  • Post-traumatic stress disorder
  • Opioid use disorder​

Medical cannabis can offer relief to patients, which is why legalization for medical use has been essential in states like New York.

The Compassionate Care Act initiated in 2014 ensures these patients have access to medical cannabis through the registered organization of their choice.

Despite cannabis prohibition at the federal level, a marijuana dispensary in New York has the potential to be successful while helping people.

Each accessible cannabis dispensary ensures patients can get the medicine they need when they need it, and New York’s program has made tremendous strides in the right direction.

What are the costs of starting a medical marijuana dispensary?

At the start of the application, two fees are due. One is a non-refundable $10,000 application fee; the other is a registration fee of $200,000.

Even if the applicant does not get approved for registration, they will receive the $200,000 fee back.

Do I need a marijuana business license to set up shop in NY?

Yes. While NY has legalized the plant for adult use, you will still need to apply and register with the state to get a marijuana business license in New York state.

Here’s some additional insight into the application fees and registration costs.

Applicants have to submit the following:

  1. Non-Refundable Application Fee of $10,000
  2. A $200,000 registration fee, which will be refunded if the applicant is not issued a registration.

How to Open a Dispensary for Recreational Marijuana in NY

New York was the 15th state to legalize recreational marijuana. This happened on March 31, 2021, when Governor Andrew Cuomo signed a bill into law to legalize recreational marijuana for adults 21 years of age and older.

The bill, the Marihuana Regulation and Taxation Act, is set to create the US’s most progressive legalization laws.

The MRTA does the following:

  • Legalizes recreational products for adults over 21 years old
  • Allows retail sales to start in New York by 2022
  • Permits up to 12 plants per household with more than one adult inhabiting the home
  • Created a system for licensure
  • Prohibits vertical integration to ensure individual marijuana businesses do not have control over the entire supply chain
  • Permits cannabis delivery services in New York
  • Allows social consumption sites, also known as lounges

Cannabis Management Solution: Get Your Financials in Order Now

Cannabis management is challenging enough. Take control of your operation’s financials with expert assistance and contact us today.

Businesses interested in setting up a dispensary or one of the other cannabis businesses available in New York (or scaling an existing one), we’re here to help!

CONTACT US NOW to learn how we’ll get your business organized and compliant for New York’s budding adult-use market!

 

 

Federal Cannabis Bill Backed by Michigan Banking Groups

Federal Cannabis Bill Backed by Michigan Banking Groups

With federal legislation making its way through Congress this session, we’re expecting more banks offering services to cannabusinesses throughout the U.S. – particularly in Michigan.

In April, we saw the Secure and Fair Enforcement (SAFE) Banking Act pass the U.S. House on a bipartisan 321-101 vote. Currently, we see the Senate divided on the bill as Democrats ponder whether they will push the bill on, shoot for federal cannabis legalization, or combine the issue with widespread criminal justice reform.

Looking to grow your cannabis business in Michigan? We help our clients scale their businesses while maintaining compliance! Contact us today to learn what we can do for your operation.

Supporting the SAFE Banking Act: A Far Cry from Supporting a Budding Cannabis Industry

The Bankers & Credit Union in Michigan: Thoughts on The SAFE Banking Act

At this point, the SAFE Banking Act has plenty of support. Mike Tierney, the president and CEO of the Community Bankers of Michigan, claims he’s “very optimistic” that the bill will pass to the Senate. For this to happen, it will need 60 votes to avoid a filibuster.

But there’s still reason for concern. Democrats might go after full legalization even with widespread support for the SAFE Banking Act throughout the banking industry and financial institutions. Since the industry has expanded to nearly $1 billion in Michigan alone, these professionals understand that it’s time to get involved.

“Chances are good, except if they decide they want to go for the more aggressive legislation,” Tierney told MiBiz. “We’d all like to just see the SAFE Banking Act. It would be fine if we could provide services to the cannabis industry without any federal repercussions. We don’t need to have marijuana legalized on the federal level.”

The SAFE Banking Act was recently reintroduced in March after it didn’t get enough support to pass in the last congressional term. This bill stands to keep federal agencies from targeting financial institutions serving cannabis-related operations in states where these businesses are legal.

At this point, marijuana is still illegal federally, even though 38 states have legalized it in one way or another. This includes Michigan, where cannabis is legal for medical and adult use. The problem this bill aims to solve is that the banks and credit unions serving this industry have to comply with rigorous requirements, which keeps many from offering these operations traditional banking services.

“There are a lot of banks that don’t want to, regardless of whether it’s legal,” Tierney said. “That may change once it’s legal, but there are bankers that just don’t feel it’s an industry they want to serve right now. Some just don’t feel it’s a benefit to their community.”

However, despite this belief running rampant in some banking communities, the fact of the matter still stands: legal cannabusinesses are supporting communities. Between tax revenue states are generating, local jobs created, and community initiatives, most of these legitimate businesses contribute their fair share to the communities they serve.

An Update on Michigan's Legal Cannabis Sector from a Banking Perspective

An Update on Michigan’s Legal Cannabis Sector from a Banking Perspective

Last year, the Marijuana Regulatory Agency reported that Michigan’s medical and adult-use marijuana sector generated an impressive $984.7 million in sales. However, equally important to note is the $360 million in sales observed during the first quarter of 2021. In March alone, adult-use marijuana sales accounted for $97.5 million in revenue.

Tierney claims that around ten banks in Michigan offer services to the cannabis sector. The Michigan Credit Union League believes around ten credit unions are working with cannabusinesses, too.

“The appetite is definitely there because it’s what their communities are demanding and what their businesses are demanding. Even those that might not necessarily have a strong desire to get their feet wet in cannabis, that’s what they’re hearing from their communities and their businesses, and they’re going to roll up their sleeves and look into it,” said Michigan Credit Union League CEO Patty Corkery. “The bottom line is it is legal in our state, and we need to support the businesses that are engaged in legal activities.”

The SAFE Banking Act stands to support cannabis businesses, as well as the banking and credit industry. Cannabis operations will receive more access to the financial services it needs to expand, while the bankers and credit union will be free to participate without federal repercussion.

However, some believe this isn’t the right way to provide these services to the cannabis sector.

Supporting the SAFE Banking Act: A Far Cry from Supporting a Budding Cannabis Industry

Working with and supporting the cannabis industry is a far cry from supporting its expansion. Despite so many credit unions wanting to serve cannabis business with the SAFE Banking Act passing, the passage of this law would likely be a setback for those operating in the space and consumers alike.

Many fear that passing this modest bill could be problematic for the cannabis industry. Senator Chuck Schumer is actually working against this idea.

Senator Schumer’s Comprehensive Bill

Senator Schumer’s Comprehensive Bill

Senator Schumer and his colleagues have been working on a bill. They say they’re not going to “bargain” against themselves by accepting the modest SAFE Banking Act. While he believes banking reform is necessary, he thinks this will risk comprehensive reform.

The idea here is that Republicans and moderate Democrats haven’t yet decided about bolder policy change. Those on the fence are less likely to vote for it if they receive a modest bill like the SAFE Banking Act. So, while Michigan banking groups support this bill, it has the potential to push federal legalization back if passed.

While banks, credit unions, and cannabis operations have much to gain from the SAFE Banking Act, there’s more to be won here than accessible banking services. But it seems that some are more interested in instant gratification than a federally legal cannabis space.

The problem here is that it’s hard to make progress when the people who stand to gain from the SAFE Banking Act are willing to settle. If and when federal legalization goes into effect, cannabusinesses will be open to the entire U.S. cannabis market. This, of course, includes shipping product across state borders without needing to worry about federal prosecution.

The federal government needs to provide guidance if they want cannabis businesses in states where it is legal, like Michigan, to survive and thrive. The current banking system makes this impossible for these companies because of their inability to have access or maintain capital as an industry. But if the SAFE Banking Act passes, there’s a chance that it will take months – or even years – to get lawmakers to approve another bill.

Schumer’s bill targets more security for cannabis operations through accessible banking, as well as their assets and resources. But he’s taking it even further by pushing for more comprehensive cannabis banking legislation. He wants to “ensure restorative justice, public health, and implement responsible taxes and regulations,” which some have compared to the recent legalization bill passed in New York.

Serve The Great Lake State While You Prepare for Federal Legalization

Looking for assistance scaling your Michigan cannabis operation in preparation for federal legalization? We’ll organize your financials and maintain compliance every step of the way!

Contact us today for expert help!

Cannabis Business Social Network Insight for 2021

Cannabis Business Social Network Insight for 2021

As the cannabis industry gains more traction throughout the United States, more professionals in the space are looking to connect online.

Even though many well-known social media networks exist, including Facebook, Instagram, and Twitter, many cannabis professionals are exploring cannabis social networks in order to build their brand, make cannabis industry connections, and engage with customers.

With increasing legality and popularity, we’ve seen cannabis social network use grow exponentially. The cannabis industry is now a huge market with plenty of room for growth, and there are currently many networks that can help cannabusiness operators succeed at connecting to marijuana enthusiasts.

Whether you want to use a cannabis business social network to meet professionals or are interested in making personal connections with other cannabis enthusiasts, these top cannabis social networks will make the process more straightforward.

Here’s a list of some of our favorite social networks catering exclusively to cannabis business owners and other cannabis enthusiasts.

Interested in becoming a part of our cannabis business social network? We connect our clients with other professionals in the space!

Contact us today to learn more about how we can scale your business within our community of industry experts

GrassCity Forums

GrassCity Forums

As one of the first of its kind, GrassCity Forums is a good place to start. This cannabis social media network was originally created to connect cannabis cultivators.

Since its start, it’s transformed into a forum that discusses marijuana consumption methods, legalization updates, the best cannabis dispensaries in certain regions, and other cannabis industry topics.

GrassCity Forums is where you’ll find cannabis-related news, along with years worth of archives that track the evolution of cannabis world culture. It also has a dispensary directory, which enhances cannabis professional reach and cannabis enthusiasts.

WeedLife Network

WeedLife Network

Since its conception in 2013, WeedLife Network has become a massive platform for the cannabis business world. This cannabis social network consists of more than 40 websites offering a cannabis social network news feed bringing the latest from cannabusinesses.

Marijuana enthusiasts post videos and photos, and they can connect with others through the website’s discussion forums. This cannabis social media platform also has fan pages, social media marketing capabilities, and groups that let connaisseurs connect with other cannabis fans across 120 countries globally.

Even though WeedLife is mainly for weed lovers, many businesses in the cannabis industry create accounts. This is where the cannabis market hangs out, which means if you’re a business owner in this space, you should at least gain access to and create a business page on WeedLife.

Businesses can perform social media marketing for products and dispensary listing in the WeedLife directory. Posting promotions is also possible through this social media network.

Besides the various functions available, WeedLife Network is user-friendly. Since this is a mobile app, it’s easy for the cannabis community to connect and find cannabis companies, including cannabis growers and dispensaries, as they move around.

Weedable

Weedable

Weedable’s mission is to promote medical marijuana legalization globally by offering a platform for people passionate about cannabis. This cannabis business social network serves the innovators, the people making big moves, and, of course, cannabis users.

The most interesting aspect about Weedable is that it offers solutions for its cannabis business community. This platform is passionate about cannabis, allows cannabis companies to target weed lovers with ads, and offers advertising solutions on its social, store, and mobile app to expand reach.

This cannabis business social network offers a way for cannabusinesses to target based on practice area and location. It also provides detailed reporting to show ad performance.

Since the network has no long-term contracts or setup fees, it’s also a flexible option to boost a business’s online presence.

While Instagram and Facebook are popular for other businesses, Weedable is a highly targeted alternative that works specifically for cannabis products and other businesses operating in the cannabis industry. From dispensaries to delivery services, doctors, testing labs, and more, this platform is becoming the go-to for many professionals looking to connect with weed enthusiasts.

MassRoots

MassRoots

MassRoots is one of the most popular social networks in the cannabis industry. It was originally created to connect college students with other cannabis users. Eventually, it acquired the investor interest it needed to take the site public.

Early on, MassRoots had an obstacle to overcome; the Apple App Store removed its app. But eventually, the platform edited its application to ensure its availability for both iOS and Android users.

Unlike other social networking sites, the site is only available in states that have legalized cannabis. Despite this hindrance on its online presence, MassRoots still has acquired beyond 1 million current users.

With this popularity, dispensaries and other cannabis operations are promoting their businesses. After listing a dispensary on the site, the business operator has access to valuable customer analytics to optimize marketing and promotional efforts.

The platform’s forums also let businesses connect with users. It requests users review and rate cannabis brands and other industry products, which encourages engagement that’s unique to MassRoots.

Cannabis consumers are attracted to this social media site with an impressive rewards program that offers movie and concert tickets, festival entry passes, and other appealing rewards.

Duby

Duby

Duby got its start back when cannabis prohibition was running rampant. It quickly became a safe space for cannabis lovers to post and connect without worrying about the law.

Eventually, Duby evolved into the social platform it is today, which includes an app connecting hundreds of thousands of people who enjoy cannabis.

The app was launched in April 2015, and since then, it has had over 250,000 installs. Each day, the app processes 100,000+ likes and dislikes.

Like an Instagram-Tinder hybrid, Duby makes it easy to connect with other users and network with professionals – not to mention, score dates with cannabis lovers.

Even though this platform isn’t exclusively a business social network, it offers cannabusinesses opportunities to market their operations and connect.

Through the new Duby Explorer, the network has increased business profile views by 645% within just 4 months of being released. It combined cannabis social with lifestyle, brands, and products to offer a social media platform that brings users and businesses together while facilitating communication.

“I started Duby to invest in what is right, not right now. We are all just babies in an emerging market… a market that will someday exceed the sales of tobacco and alcohol combined.”

Russ Thomas

CEO of Duby

LeafWire

LeafWire

The LeafWire platform is a cannabis and hemp business network connecting professionals to one another. Even Montel Williams uses it!

Think of LeafWire as a LinkedIn for cannabis. This cannabis business network primarily focuses on connecting investors with cannabis businesses, which has aided in growing this massive industry.

So, if you’re a cananbusiness owner looking for an investment or an investor seeking an exciting investment opportunity, LeafWire is where you can make that happen.

In the past, it was challenging for cannabis-related businesses to attract investor interest. This was mainly because of the stigma and uncertainties surrounding the industry.

With legalization spreading throughout the US, the stigma is beginning to fade – and many investors are realizing just how much growth this industry will experience.

LeafWire is where these entities can make their connections.

Just like with LinkedIn, LeafWire is a networking platform that brings professionals together to share content, discuss trends and techniques and analyze the medical and adult-use marijuana spaces.

WeedMaps

WeedMaps

Whether you’re a consumer or a professional operating in the cannabis space, you’ve likely heard of WeedMaps. Even if you haven’t heard of this platform, you probably saw the company sponsor the recent Mike Tyson fight.

Looking at the site’s name, it’s easy to see the focus. The website helps cannabis consumers find local dispensaries and shops. But it’s so much more than that!

Besides incorporating WeedMaps in a cannabis SEO strategy, this platform helps cannabis businesses reach consumers. This massive online community lets dispensaries promote their products, and the platform even allows online ordering.

WeedMaps is also an impressive content producer. Between reviews of brands, strains, and other cannabis-related products, it’s easy to see what attracts users and professionals operating in cannabis to this site.

How to Promote Cannabusinesses Using Cannabis Social Networks

Cannabis business social networks are a unique opportunity for brands. Here’s a list of strategies you can implement on these platforms to get great results:

Create & Distribute Educational Content

Create & Distribute Educational Content

Throwing promotional content at consumers isn’t an effective marketing campaign; instead, try focusing more on creating and distributing educational content.

In a space that’s historically characterized by misinformation, it’s safe to safe that people need an education on how to choose the right products and services.

Instead of telling prospects why your operation is the best choice, show them. This way, they’ll know before they even get there.

In other words, don’t tell your audience what you’re selling – show them!

For example, if cannabis strains are the product that you offer at your cannabusiness operation, share a video of an expert explaining the different types and benefits of each strain. This will help potential customers make informed decisions before shopping while encouraging them to buy from you as an industry expert.

People want to know about news and information connected to medicinal and adult use. New cannabis users in particular want to know more about safe product consumption.

Educating your audience on various social media gives people a reason to trust and buy from you as opposed to the competition. But this also encourages them to share this information to help their friends, too. And in such a competitive space, this engagement is valuable.

Use Hashtags to Reach More Cannabis Users

Use Hashtags to Reach More Cannabis Users

Hashtags categorize posts with short labels that allow people to find social media posts regarding a specific theme or topic more easily. When you create relevant hashtags for your content, you can reach a larger organic audience that’s highly targeted.

Be careful though; the wrong hashtags can cause controversy for cannabis entrepreneurs.

Equally important to note is that if a marijuana enthusiast wants to find your cannabis brand, using the right hashtags can ensure your content is found.

For instance, if you operate a dispensary in LA, you might include #dispensaryLA, #dispensaryLosAngeles, #LAdispensary, and #LosAngelesdispensary on your posts. This will ensure that the people looking for dispensaries in LA on that social media platform will find your content.

Work with Other Professionals in the Cannabis Industry

Work with Other Professionals in the Cannabis Industry

Early on in your marketing efforts, it’s important to establish yourself as an industry leader. To do this, you’ll need to follow and engage with other brands in your niche.

For instance, if you’re an extractor, it’s a good idea to follow equipment manufacturers, solvent suppliers, and other cannabis extractors. Not only will they see your posts in their feed, but this is a great opportunity for cross-promotion.

Find Social Media Influencers as Part of Your Cannabis Business Social Network Strategy

Find Social Media Influencers as Part of Your Cannabis Business Social Network Strategy

Cannabis social media influencers can help your business get the attention of millions of consumers.

Since influencers already have a highly targeted following that trusts them, they’re the perfect people to promote your business on a cannabis business social network.

The best way to find influencers in your space is by looking on social media platforms. You can use tools like Klout or Buzzsumo for help finding these individuals as well.

Performing an influencer marketing campaign means you can work with macro-influencers, micro-influencers, or a combination of the two.

Macro-influencers are people who have over a million followers from various demographics. These individuals are perfect for raising brand awareness and encouraging conversions.

On the other hand, micro-influencers also have a place in a strategy. These influencers have 10,000 to 100,000 followers and offer personalized content on a certain subject. In this case, it’d likely be cannabis.

Micro-influencers tend to be more compelling to their followers, which means they have more potential to get followers to your site and convert.

Build a Community on Social Media

Build a Community on Social Media

Communities support each other, right? So it makes sense that by building a community, your cannacompany will get more support.

By creating a community on a cannabis social network, you’re making an online communal space for content surrounding your brand. You can invite consumers interested in comparable products, as well as businesses that might work with you without competing.

As your community expands, so does your reach!

Through this community, you’ll share educational and entertaining content. But you can also sponsor events and support charities with the support of the community you create. This enhances your brand in the eyes of your audience, which ultimately leads to more trust, more engagement, and more conversions.

As you attend cannabis-related seminars and conferences, you’ll meet others operating in the industry. Create these meaningful partnerships and invite them to join your online community. By offering them your platform, you’re encouraging them to promote your brand as they promote their own.

Stay Active on Cannabis_Social Networking Platforms

Stay Active on Cannabis Social Networking Platforms

It’s not enough just to have an Instagram account or Facebook page; you need to use them effectively! This means actively engaging with other brands and consumers on these platforms.

It’s also important that you provide valuable content on social media platforms like Facebook Groups or LinkedIn Groups related to the industry as well. This can help increase your following and engagement.

Maintaining a social media presence is important for cannabis business operators, as cannabis continues to be legal in more states every year. In order to stay competitive with other brands across the industry, it’s important that you invest time into your marketing efforts.

The Power of Cannabis Business Social Networks in 2021

As the cannabis industry continues its expansion, we’ll continue to see advancements and innovations. But in-person connections aren’t the end-all-be-all for cannabis professionals. Businesses operating in this space need to become more involved in the digital world of social media.

Whether connecting with professionals or marketing to consumers, cannabis business social networks have a lot to offer. The right platform paired with social media marketing can produce valuable engagement that will grow your brand.

The industry needs more educational content. While promotional messages have a place in cannabis, you’ll reach more people and find positive results when you have free value to offer, whether you’re connecting with other cannabis businesses or consumers in the space.

Looking to scale your cannabusiness? Contact us today to get our experts working on your operation’s success!

 

New Jersey CREAMMA & What to Expect

New Jersey CREAMMA & What to Expect

New Jersey voters recently voted to legalize recreational marijuana. Not long after, Governor Phil Murphy issued the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA), which outlines rules and regulations regarding legalized adult-use cannabis in the Garden State.

Despite federal law still listing marijuana as a Schedule 1 drug, people in New Jersey will be allowed to smoke and carry marijuana on their persons legally. But CREAMMA takes legalization in New Jersey several steps further to outline specific regulations.

This law regulates a few aspects of the new space, including employers’ responsibilities and employees’ rights pertaining to marijuana use and how it should be regarded in and out of the workplace. Furthermore, CREAMMA will allow microbusinesses to open within the state.

In this article, we’re covering CREAMMA in New Jersey and the regulations we can expect as this state’s new market develops.

Interested in opening a cannabis microbusiness in New Jersey or scaling an existing one? We’re here to help!

Contact us now to get your microbusiness organized and compliant in preparation for New Jersey’s budding adult-use market!

CREAMMA Supports a Craft Cannabis Industry in New Jersey

We all know about craft beer and its popularity. But what about craft cannabis?

CREAMMA aims to expand the cannabis industry in New Jersey by encouraging microbusinesses to set up shop.

Under CREAMMA, the definition of a microbusiness is a person or entity that receives licensing from the Cannabis Regulatory Commission as either a marijuana cultivator, manufacturer, wholesaler, distributor, retailer, or delivery service. Here’s a synopsis of how these microbusinesses are expected to operate under CREAMMA:

  1. Microbusinesses can have up to ten employees.
  2. Microbusinesses can operate a cannabis establishment that occupies up to 2,500 square feet. If it’s a cannabis cultivator, the grow area cannot exceed 2,500 square feet, measured on a horizontal plane. The grow operation cannot grow in excess of 24 feet above that plane.
  3. Microbusinesses are allowed to possess up to 1,000 cannabis plants per month. However, distributors can possess plants for transportation without being subjected to this limitation.
  4. Manufacturing microbusinesses can obtain up to 1,000 pounds of usable cannabis each month.
  5. Wholesaling microbusinesses can obtain up to 1,000 pounds of usable cannabis or the equivalent in any form of manufactured cannabis products or cannabis resin, as well as combinations of these various cannabis products.
  6. Retailer microbusinesses are allowed to obtain up to 1,000 pounds of usable cannabis or the equivalent amount of manufactured cannabis products or cannabis resin, as well as combinations of these different types of cannabis products.

Restrictions & Conditions NJ Cannabis Microbusiness Operators Should Know About

Restrictions & Conditions NJ Cannabis Microbusiness Operators Should Know About

If you plan on starting a cannabis microbusiness in New Jersey, you’ll need to follow these ownership requirements and restrictions:

  1. Your microbusiness must be 100 percent New Jersey resident-owned. This resident must have been living in the state for at least the last two consecutive years.
  2. A minimum of 51 percent of the owners, directors, officers, or employees working for the microbusiness must be residents of the municipality that the business is located or to be located. They can also reside in a municipality bordering it.
  3. Owners, directors, officers, or other people with a financial interest in the operation who also maintains decision-making authority cannot hold any financial interest in another licensed cannabis establishment, regardless of whether it’s a microbusiness.
  4. Owners, directors, officers, or other people with a financial interest in the operation who also maintains decision-making authority for a licensed cannabis establishment, regardless of whether a microbusiness, are not allowed to hold a financial interest in a microbusiness.

More Information About What CREAMMA Means for Cannabis Microbusinesses

More Information About What CREAMMA Means for Cannabis Microbusinesses

CREAMMA makes microbusiness licenses valid for a year with the option to renew annually or be replaced while it’s still valid. The annual license lets microbusinesses convert and continue operating as a licensed person or entity that’s not a microbusiness, which will be based on a process and criteria the CRC establishes.

At this point, there is a maximum of 37 cultivation licenses available under CREAMMA. But this doesn’t apply to the growers who are issued a microbusiness license.

Under CREAMMA, microbusiness owners are not allowed to sell or transfer a microbusiness license. Also, CREAMMA does not allow microbusinesses to have a cannabis consumption area. This is reserved only for licensed cannabis retail establishments and medical cannabis dispensaries.

Eventually, it’s possible for CREAMMA to include cannabis consumption areas. But, for now, retail microbusinesses will have to wait if they’d like to obtain an endorsement for cannabis consumption areas.

CREAMMA also impacts employees and employers, regardless of whether they’re involved in the cannabis sector. This is exciting for some and potentially stress-inducing for others.

CREAMMA – What Does it Mean for Employees & Employers?

CREAMMA – What Does it Mean for Employees & Employers?

After being signed into law on Monday, February 22, 2021, CREAMMA makes marijuana use will be legal and regulated for adults 21 and older. It decriminalizes possession of limited amounts of marijuana, as well.

But it does more than that, particularly for employers and employees.

At this point, the regulations that interpret this law are still a long way away from being decided. However, it’s crucial for employers to begin thinking about how it will impact their drug policies and drug testing programs.

Through CREAMMA, employees receive new substantial protections, specifically in regards to engaging in lawful behavior involving marijuana. This has the potential to be a real challenge for employers, especially when considering the fact that testing for tetrahydrocannabinol (THC) is still not accurate.

THC, which is the primary psychoactive cannabinoid found in cannabis, takes quite some time to break down. Since the metabolites can be measured for an extended period of time, it’s challenging to test whether an employee is impaired on the job or legally ingested it the night or even weeks before.

However, there is some good news for employers. Under CREAMMA, you’re still allowed to ban “the use… consumption, possession, transfer, display, transportation, sale, or growth of cannabis or cannabis items in the workplace” while work is in session. Employers are also able to ban employees from coming into work while still feeling the effects of marijuana.

Furthermore, as an employer, you can still administer drug tests to employees and can discipline or discharge employees who have used, possessed, or were intoxicated by marijuana while at your place of work during work hours.

But it’s not all good news. Employers are not permitted to discipline or dismiss employees if they fail a drug test for the substance. Rather, the employee must go through a physical examination “conducted by an individual with the necessary certification to opine on the employee’s state of impairment, or lack thereof.”

With CREAMMA in place, the Cannabis Regulatory Commission must prescribe “standards in regulation for a Workplace Impairment Recognition Expert (WIRE) certification, to be issued to full- or part-time employees, or others contracted to perform services on behalf of an employee’s usage of, or impairment from, a cannabis item or other intoxicating substance, and for assisting in the investigation of workplace accidents.” After the WIRE certification is available, which is unlikely to happen for several months, employers will need to have supervisors and/or management-level employees obtain the certification.

In essence, employees now have the decision to use marijuana recreationally with protected status under New Jersey law. While this is a win in and of itself for the cannabis industry as a whole, it’s important to understand that this will impact the way businesses operate, regardless of whether they’re working in cannabis.

CREAMMA is legislation that establishes the ground rules for how microbusinesses in New Jersey’s newly legalized cannabis sector are expected to operate. But it also provides protection to employees who want to consume legally. As a result, we can expect more consumers to enter the space as more microbusinesses get up and running.

If you’re interested in setting up your own cannabis microbusiness in New Jersey or scaling an existing one, we’re here to help!

Contact us now to learn how we’ll get your microbusiness organized and compliant for New Jersey’s budding adult-use market!