Cannabis Update For 2023 Things You SHOULD Know! | Biz to Biz Podcast

Yo, what's up everybody? It's Justin live from B2B Vault, the biz to biz podcast sponsored by Nationwide Payment Systems, hosted by this guy, the Craig Biggio of payment processing himself, Allen Kopelman. And we'll be providing you educational information about fintech, small business payment processing, and the technology businesses are using in the world today. And in today's podcast, we'll be talking about, uh, cannabis-related businesses and merchant services and all the updates in that lovely world. If you're in there, a lot of stuff is happening, uh, negatively to, to the business— negatively impacting the business, rather, the industry, rather. Um, so yeah, man, they're shaking it up, and we thought it'd be a good idea to, uh give it a shout and talk about it. Anyway, how are you doing, man?

I'm doing great. Went to the Marlins game yesterday, watched them play the Yankees.

Go Yankees!

It wasn't go yet. What was go Yankees for 9 straight innings until the bottom of the 9th. Yeah, I know, man. And then all of a sudden the Miracle Marlins showed up and the whole Miracle Marlins, this guy says. Yeah, the miracle— a miracle happened at Marlins Stadium today. That's good. And, uh, it was pretty fun. So because the entire game I was being— we were getting our butts kicked, and the lovely fans from New York were very happy every time Aaron Judge came up. Everybody was going bananas.

Nice.

And then in the end, Luis Arraez hit a shot down the right field line that went back all the way to Luis. Luis Arraez. Whatever his name is.

Luis Arraez.

Luis Arraez. Okay. The guy's like the hottest hitter in baseball with over .400 average right now, right?

Nah.

Okay. He's one of the hottest.

Go Brewers, man.

Go Brewers. Okay.

Brewers are doing all right.

So yeah, Marlins, they Yeah, the Marlins won. And it was Jacob's birthday celebration game.

And you were on TV.

Yeah, and I was on TV for 0.0001 seconds.

Exactly. For a millisecond. No, but you could see if you— I don't know, you might have, if you really knew who you were.

If you had a big screen TV, you definitely saw us.

Oh yeah. And if you knew who you guys were.

Yeah. You knew where we were sitting. Yeah, exactly. The best part was we're cheering and And then the Yankees fans are all like—

Did you buy beer?

Huh? Yeah, we had teal beer.

I asked you, I knew you were gonna— I figured. How was it?

It was good. The Marlins beer. You had to get a Marlins beer.

How tall? I mean, how much was it? Like $14? No, $3. Why?

I don't know. They have a special beer that's the color of the Marlins for $3. It's like this color.

Blue 40.

Yeah, I guess. I don't know.

No, I have no idea. That's cool though, man.

Real beer they have.

Yeah, I've never been a fan, like, on like St. Patrick's Day and like the beer's green.

Yeah, Jacob was like, he wanted to get a teal beer. We got quesadillas. So funny, he's like a regular there. So like security guards know Jacob, the food guy knows Jacob because Jacob likes the quesadilla. The guy knows Jacob.

That's cool.

One thing I did not like is I was— because Jacob knew the guy. I was putting a tip on. The guy's like, no, no, don't tip. And I said, why not? And he goes, oh no. He goes, we don't get the tips. Oh, I didn't like that.

That's terrible.

Yeah, it is terrible. He goes, we don't— I don't know where— he said, I don't know where the money goes. And that's through the POS system.

It prompts for a tip at the Marlins Stadium.

Yeah.

I'll ask about that. And the guy said, I know the, the vendor.

Really?

Yeah.

And they—

and he said don't tip because I don't know, whatever the company, I know, whatever.

Oh, I don't know, but this POS system, something C-H-E-Q, check.

Oh, I know that they hate it, the people who work there. Yeah, they don't like the system.

Very simple.

Yeah, I mean everything, you know, but that's got to suck if you like Working in one of those places where you can actually— you might— I don't say— I say deserve a tip, but I don't want to sound like that. But you know, there's a bunch of like some areas that you might want to give a tip to someone.

Well, no, I'm just saying the guys making your food, they're like the quesadilla guys, they're making—

that's the type of P.I. I'm talking about, right? I'm not talking about it like you buy a hot dog, right? You might put a dollar in there if they got— if you got some cash anyway. I don't know. Always cough up a buck for a tip. That I, that I do know.

Yeah, so I mean, I'm sure, yeah, but every single place wherever we went in the stadium, they all asked for a tip.

Yeah, so I didn't do much, uh, Saturday. Well, I guess, I mean, and this is the Marlins special sugarcane hat. Yeah, no, it's cool. I like it. Um, Saturday I went and shaved my beard off.

I see it's very close. Yeah, your beard looks like mine.

For those that only listen and don't watch, I had a fairly large beard going, so my wife asked if she could see my face, so I went and shaved my beard off on Saturday. Wow, that was cool. You know, it's always a— it's weird because like you For me, I have like an attachment with it, right? Like, I feel like a beard, it's like a part of my character, right? Like who I am as a person.

Well, I've seen it low before.

Yeah, I mean, I've always had, I usually keep my beard like this, you know. It depends on how I'm feeling, right?

As long as you're not gonna go Duck Dynasty.

No. I, uh, I've— yeah, no, I mean, even my beard, it was long, but it wasn't— I don't feel like it was out of control at all. I was doing a pretty good job at maintaining it. Yeah, this guy. I mean, there was times where, I mean, I might go months without doing much to it, but yeah, no, I was going to the barber shop and they were doing it, but she just asked if she could see my face, and it's probably because I've been going to the gym and she wanted to see what I look like. I was kind of interested in seeing what I look like underneath there too. 'Cause you don't, you know, like when you have a full beard, you only see like half of your face.

Right.

So you can't really tell what the rest of you, you know.

You look much thinner.

I do look thinner. With the beard. My kids were killing me. They were giving me the business. Oh man.

So let's jump into the cannabis.

Yeah, anyway, and then send, I went to go, but see, like real quick, I wanna say that I go to get my haircut at the Yellow Greens Market. It's a farmer's market.

Right.

And I walked around and they have a veggie, a vegan plant-based Mexican restaurant.

Yeah, I saw that.

And I had al pastor tacos.

Okay.

And it was amazing. So if you're a vegan and you're interested into trying something new, or if you're just interested in trying something new, go check out the spot at the Yellow Green Market. It's in the back, so it's not easy to find. If I wouldn't have kept walking around, I would have never noticed it.

Yeah, it's a cool place.

I love that place. I forgot my business cards in the in the— in my Jeep, and I was— it was so hot I couldn't walk back to the car. It was too hot to do that, so I just, you know, but whatever. Anyway, hopping right into, uh, cannabis-related businesses and merchant services update for 2023. That's a lot of swallow.

So let's give some facts about cannabis, and then we'll jump into like the payment stuff. So here's some cannabis facts. 38 states allow for medical use of cannabis. 23 states allow for the recreational, you know, sale of cannabis. And some of the— some states allow both. I didn't count how many, but this I found interesting. There are several states that allow low THC, below 0.8%. I'm not sure exactly why.

I don't understand how Wisconsin's in there because they don't have medical or rec.

Yeah, well, I don't know what a 0.8% cannabis—

it's got to be meaning CBD probably, but it just says Iowa. That's a bad stat, but you know, it was on the cannabis website. All of these states that they say that it— I bet you— I mean, you got Iowa, Wisconsin, Wyoming, Texas, Georgia, South Carolina, North Carolina, Tennessee, and Indiana. All states that I have— I don't have any interest of going to.

Okay.

And I'm from Wisconsin.

And then, and then Nebraska, Idaho, and Kansas have no cannabis programs whatsoever. Yeah.

Wisconsin. Okay. Wisconsin does have a medical program, but the medical program is you have to be dying. Oh, but I don't mean to say that. And I'm sorry that you're going through that and you shouldn't have to be going through that type of pain to get medical marijuana.

And then what's really weird is a bunch of states who allow marijuana have a bunch of laws against like CBD, like Louisiana. Marijuana is okay, but the CBD is not okay.

I mean, a part of me is, I'm on the fence with that, right? Like, I'm not, I don't know about all the, like, you ask somebody who's old and about the new weed, like the new cannabis that's out, they say it's too strong, right? They say that it's just different. And that's natural, right? Isn't that— yeah, it's kind of what happens, right? Things get— people get better at growing, there's technology, etc., etc., right? You, you max out the plant's potential, right? And then you got CBD, right, right? I think it really depends on how it's grown, like, right? Because people can just make it really genetically modified. And what are you really smoking or ingesting? Ingesting at that point, right? So I, I get it. I think that— I don't understand why it's got to be separate. I think that it's just, just be legal all across the board. It would save a lot of heartache and pain.

Well, we'd be collecting a lot of taxes in that the CBD market is estimated at exceeding $5.3 billion in sales.

That is insane. I want to just sliver of that.

And then the cannabis market— this blew my mind— in 2021, not counting this year, or the year before, $33 billion, $33 billion in cannabis sales. And the sad part is we have this huge deficit, right? And this is not— none of this is being taxed.

So I'm gonna say— so, so we can just say— I'm gonna just estimate that it's got to be at $100 billion by now, because all the— if there's—

if this was 2 years ago, yeah, $33 billion. Well, it's probably at about $50 or $60 billion.

I'm gonna double that.

I don't know if it's double. Well, they did add a few more states.

That's what I'm saying.

Yeah, but they were—

you got New York, but that was just added this year. New York, exactly, this year. But let they— I think like last month they already did like $100 million.

Yeah, there's some crazy sales going on in Jersey, in New— in the—

Pennsylvania.

Yeah.

New Hampshire.

Right.

Maine.

Yeah.

You're talking about big states with a lot of people with a lot of hippies, right, that all were—

you're—

all the hippies moved up.

Yeah, it could be that it's all of them, but $100 million and we can't get the Safe Banking Act passed.

That is so— that's a tragic situation for the American.

And then the other thing that's crazy is, is You know, we had Visa came out last year and cracked down on the cashless ATM business, saying they're going to fine people. Some people got fined. I still see them around in a few places. And MasterCard came out and they said they're going to start cracking down on the debit cards in these dispensaries. And, um, yeah, and they did, and they did, and it's probably starting to affect sales and More people need to put in a real ATM machine.

I was reading about this, um, I read an article, it was an interesting perspective about how— well, this guy was— he took it as the reason was MasterCard and Visa were pulling out of the cannabis market was to put pressure on Congress to get them to sign the SAFE Banking Act. Because their, I don't know, the strategy behind it, right? Is that one, the government doesn't want all this money floating around.

Cash?

Yeah, the cash. Because what does cash bring? Cash brings criminal activity, right?

Right.

Like, 'cause people start laundering money, people are sitting on money, so there's robberies.

Well, there's people sitting on billions of dollars now. Exactly. 'Cause this cannabis has been around for a while.

So, I mean, this guy was saying—

But you have these private banks.

Right, but this guy was saying— People are storing cash. You know what I mean? This was the way for MasterCard and Visa to put pressure on the government to get something done. And I like, I think that if that's a, that's a smart tactic because the government doesn't want people running around. It's violence, there's, you know, there's so many things that could happen when there's just cash just sitting around. It's not a good thing. It's, you know, it's not being pushed back into the economy, et cetera, et cetera. And if this is their way of putting pressure on Congress, I think it's smart. I think hopefully Congress, you know, is kind of waking up. I mean, the fact that it's legal in what, 38 states you said, and 23 of them are recreational— I mean, if that isn't—

some states have both.

If exactly— if that's not proof that the American people— that's what— there's how many states are in America? There's 50 states. That's 12 states left. I mean, come on, right? Like, that's the majority rules, I thought, in America. Apparently not. And so, well, actually, there's only 3 states that have no marijuana. Yeah, exactly.

So really, there's 47 states that have marijuana, right?

There, right?

There's 47 states have some sort of Idaho, Kansas, and Nebraska.

I'm good, right?

3 places we're probably not going.

Are you bout it, bout it, fool?

So the, you know, so there's no legal processing really for, you know, there's been a bunch of companies doing workaround stuff and things like that, and these cashless ATMs. And then I've heard—

I bet they're salty right now.

Well, I've heard a lot of like business owners that had cashless ATMs because what happens is, is the banks find the cashless ATM, then they shut down the processing, then they hold the business owner's money for up to 180 days., and then it takes probably longer than that for the business owner to recover their funds. And, uh, you know, we did a few of those several years ago and then we stopped because it was just a mess. The banks were getting shut down. Businesses had money held. We're like, no way.

We can't— that sounds like a disaster.

Not going to do that. So we do have some ATMs that are in cannabis dispensaries and it works fine. And the cannabis dispensaries are smart. Banking is readily available from state banks and credit unions that are state-chartered. So business owners are getting smart and getting bank accounts and then bringing their cash to the bank every day and cutting down on how much cash they have sitting around.

So the real issue is that you can't just electronically deposit this money into the bank.

Not yet. It's coming.

But you can take a fistful of dollars, right? And they're not going to bat an eye.

Oh, they bat an eye because you had a—

they're already going to charge— they're going to charge you extra for cash deposit.

Yeah. And you got to bring it in a special bag, right? And you have to drop it off at the bank, and then they put it in a special box, and then it gets counted later. So you tell them, oh, there's 20 grand in there, they don't sit there and count it like they do if you're from a convenience store, right? They take it, they put it in a special area, and then the waste of resources— and then the armored car comes, picks it up, and they take it to the, to the depot. And then the depot counts and verifies what was in the bag. But it's a special sealed bag.

How long does this process take for the bank?

Days.

So like Jay's dispensary drops it off on Monday morning.

Well, we're hoping that we're going to have a smart safe solution.

I'm just saying Jay drops it off on Monday morning.

Yeah.

How long does it take for me to get that money in my bank?

Wednesday or Thursday. Yeah, it's—

but it's, you know, why would— if I want— why would Steen— yeah, I see why it's so many people. They credit millions of dollars, but they credit some of it.

You say, oh, there's $20 grand, they put $10 grand in your bank account, right, right away. And then they verify if you have a good relationship, right? They verify the rest of it.

That's crazy.

Pretty much how it goes. And, uh, you know, another side note for cannabis, we all know Snoop Dogg is in cannabis and Snoop Dogg, so he's on LinkedIn now.

Snoop Lion.

So it's kind of funny. And basically, I think he got like something like 10,000, 20,000 followers in like a couple of days.

Oh yeah, that was Interesting. Yeah, I mean, he's the new CEO of Death Row Records, so, you know, he's doing a lot of business stuff. So I could see why his—

and he's in like every commercial.

His PR team is like, yeah, man, you need a LinkedIn profile. If Berner from Cookies is on there, then you gotta be on there. So it makes sense.

Again, he's in like—

but I've been noticing a lot more celebrities. Yeah, on LinkedIn, like Puff Daddy.

Is on that. He really?

Yeah.

Okay.

Sean Combs. Sean Combs, he's on there. Jay-Z's not on there. I didn't look if Sean Carter's on there. Hmm, Sean Carter, that's Jay-Z's real name.

Okay.

Yeah, so here's Snoop's on LinkedIn if you're interested in following him. I tried to connect with him, but I don't have his email address, so I tried a bunch of like— I tried snoopdog@gmail Uh, snoopdoggydog@gmail.

Uh, should have tried snoopcorona@gmail.com.

That's too new. What, you gotta think Snoop's been in the game for like 30 years or so.

What's his most famous— what was his first famous song?

If you were a Snoop Dogg setting up your Gmail account 20 years ago, what would it have been? It'd have been like Snoop Blunt. No, it'd have been— it would have been your rap name. It would have been like the dog, Snoop Doggy Dogg at yahoo.com, right? That didn't work, but okay, wait, let's— so if you guys got his— if you got Snoop's email address, send it to me, man. I'd love to connect with the dog father, the dog father, man.

That would be pretty cool. So here's top things that were in the news about cannabis. The U.S. Circuit Court of Appeals ruled the federal law banning people who use drugs from possessing guns is illegal. So there was a guy sentenced to 4 years in prison because he admitted being a marijuana consumer while having a firearm. He got out of jail. So good for him. I mean, that's just dumb.

Why the hell did you admit that shit?

No, I'm saying you can have a bottle of Jack Daniel's, right, and be drunk, but you can't have a gun though. You can have a whole bunch of guns. You can't have a joint and a gun. Yeah, that's ridiculous. And the department—

I hope they have the same rules for heroin and all the other stuff.

Well, not in like places like Seattle. You can just—

oh yeah, you can do whatever you want to do, do whatever you want.

And then the Department of Health and Human Services says there's no record of a marijuana letter that the head of Drug Enforcement Administration claimed in congressional testimony that Joe Biden sent to initiate a scheduling review.

Oh, for real? So that's a hoax?

That's a hoax. You— the guideline—

where did you get this information?

That was in the news. That was from the, the marijuana, the cannabis news, uh, magazine.

So there's— so Sleepy Joe, man, you really didn't initiate the scheduling review, bro?

Right, he lied.

Oh, that's kind of whack.

I mean, Hunter Biden can do cocaine, but the rest of America can't do.

A spliff.

Have our marijuana. A new Gallup poll found that half of Americans have tried marijuana. I think it's higher. What do you think?

I think everyone in America has tried marijuana.

I don't know about everybody. My mom's tried it. She's 80.

That's what I'm saying, dude. I think if you're— yeah, everyone.

And additionally, the majority of adults say they're not concerned about the effects of marijuana.

Adults regularly using marijuana, right? I don't— they just— in New York, they just said that the cops could smoke weed.

What's it—

not on duty, but like they could smoke weed. And that's a, that's a high-stress job.

So, and here's like what you were talking about. Connecticut Department of Consumer Protection reported realtors sold— the retailers in Connecticut sold $13 million in July, July, a new monthly record. Other states, Maine, Massachusetts, Rhode Island also set cannabis records. That's why this year it's going to be $100 billion. Of course, 2024. Yeah.

And I mean, just imagine with Florida.

And here's a—

if Florida goes wreck, Florida goes wreck, I mean, it's going to be $250 million a year.

It'd be $150 million just in Florida.

Dude, we got a lot of people.

I like to party.

Yeah, I was, uh, it's, it's funny though, like, because I was down by the beach just picking something up. Yeah, for my daughter. And, um, she, uh, I was waiting in a car and there's a bunch of people outside and they're all smoking, but it's not legal, right?

Listen, I would walk— cops—

listen, I'm not done.

Yeah.

So the cops were right down the street, they were smoking plenty weed, didn't nobody say nothing. Then some lady, yeah, who didn't like the smell, yeah, walked over to the cop and said something, and then the cops said something.

So I think people are just like, person could just have a medical card, boom.

That's not how it works though, you can't smoke in public.

Oh, I see.

It's only for home consumption.

I'm walking Rocky in the morning.

My point is this though, if you don't like the way it smells, yo, just walk away. You gotta go and call the cops, fam. Like, y'all gotta relax with that. Don't nobody like the way y'all cigarettes smell.

Exactly. I hate that.

Yo, cigarettes and cigars is the worst smell on Earth. It's— next is vape, because I could smell the metal. I could literally— like, when you're exhaling that crap, I can smell the metal that you're burning in your lungs, dude.

Like, I don't like that vape.

The vaping crap is terrible. Like, and it's so much more smoke. I was at the airport and you guys are allowed to smoke a vape in the airport, walking around the airport.

Half of them were probably weak.

Yeah, well, the ones that I'm talking about, no, but I did see a couple of people hitting the vape pen and I'm like, damn, that's smart.

Listen, I walk Rocky in the morning.

I always forget mine.

And there's people doing a wake and bake at 6 AM while I'm out there walking him. We walked by somebody's house today, I was like, damn. It was reeking.

Right, but I mean, like, it's none of your business at that point.

Oh, I don't care, I just keep going.

But you know that.

Rocky's going, mm.

But even you, like you said, you just keep walking, but a lot of people are out here because of the stigma behind cannabis.

Right.

It's, ugh, it stinks, so now they're gonna, it doesn't stink, actually, it smells way better than a cigarette.

Here's some stigmas that, Business— if you have a CBD or hemp business, here's some information for you. You do not have to pay sky-high merchant fees. If you're paying 6, 7, 8, 9% on Shopify, on, on wherever you're processing, you need to call us because you're getting, you're getting way overcharged. There are banks that will take your business As long as you don't have a gazillion chargebacks, you stay under the chargeback ratio, you can get decent rates on processing for CBD hemp.

Yeah, and that's for your store, for your e-commerce shop, for store.

We just got a guy approved that was on the match list. He got match listed and, uh, they— the bank took him anyway because it would make no sense that the guy was on the match list and had processing. They, you know, the guy was on there for processing CBD.

Tell them why though.

No, he was processing.

No, no, no, tell them. Oh, the bank, the banks are dropping.

So the bank dropped them because the first, the processor he was with was with, we'll name the bank, Bank A. They switched to a different, they got the blank. No, they switched funding banks.

Okay. Or they, or a lot of banks are getting bought, right?

They got bought out. So then the new bank said, nope, we don't want the CBD business. Instead of just telling the guy to leave, they put him on the match list. That's not right. You approved them, you processed them for 3 years. Now he's on match. Whatever. He— we explained it to the bank. We showed them the records and they approved the merchant.

Good. Nonetheless, good business over here at Nationwide Payment Systems.

And then the other thing is I talk to business owners that have like marijuana or cannabis related business, whatever you want to call it, MRB, CRB. Right.

For example, would be like a head shop. You sell bongs.

Well, no, not like that, but like you're selling LED lights, you're selling rolling papers.

I was getting there. I was getting there, man.

Medical marijuana doctors.

I was getting there. Okay, but go ahead.

Things like that, right? What other kind of examples would there be?

You said them. What I was going to—

that was all of them, basically. Sorry. But you don't have to pay through the through the nose either, because there's banks that will take your business. We represent a couple of processors, they don't care. It's that it's cannabis-related. So if you have a cannabis-related business, even like a cannabis magazine, a guy told, messaged me over the weekend, and I said, well, how much do you pay? And he's like, I'm paying 7%. I go, that's ridiculous.

Which one, Nugs Magazine?

Just, just like he has a small startup magazine. He's doing about $30,000 a month of advertising and stuff. And I was like, that's way too much. You know, put in an application, we'll get you down to half of that for sure. You know, the bank— there's banks that just don't— I mean, you're not doing anything wrong and they did and they're fine with it. So why should you pay high rates to process your cards when you don't have to.

Exactly.

And, uh, you know, that's, uh, that's a big myth in the business. And the same thing, you can have an ATM in your cannabis dispensary, you just have to—

you just can't put money in it yourself.

Don't— you don't put your money in it. We put our money in the ATM. We have armored car come out, load the money, and doing that. Then we're talking to some companies now about Smart Safes, which are these safes, you can get it for any business right now, just not cannabis at this moment. You can put your money in the safe and it's electronically deposited to your bank. So if you have a business with a lot of cash, maybe you have a convenience store or you have, let's say, a bar, you have a lot of cash, you can deposit your cash.

Smart Safes aren't doing cannabis businesses?

Not yet.

Why?

Coming soon. Coming soon. They're trying to— because they got to figure out how to, how to, how to package up the bills so it doesn't smell up the, uh, the, the, uh, you know, the armored truck. And you can't have the armored truck—

why do they think it's going to smell like cannabis? How do you know?

Because I've smelled the money that came out of a cannabis location ATM before. And it reeks. Really? Yeah, that's—

I mean, because it's like—

because the whole store smells like cannabis. But, but I figured— I don't understand why they can't spray it with like—

I didn't smell cannabis when I walked into the dispensary.

What I'm saying is it's like, I don't know why they can't smell— spray it with like Oseum or something like that and then get rid of the smell. Yeah, I don't know. That's just what they were telling me. And they said they can't have the guys going around to, uh, to, to different, uh, like only to dispensaries because then they would get robbed.

Well, that's the show for cannabis-related businesses 2023 in merchant services. Be sure to check out B2B Vault on all the DSPs. Smash the like button on YouTube. Follow Allen and myself on Twitter.

And tell your congresspeople to approve the Safe Banking Act ASAP.

Peace.

Carpe Diem.