...COMING SOON

Meeting Quick Recap ----------------------- The meeting focused on banking and funding solutions in the cannabis industry, with discussions centered around Safe Harbor's Synergy product and FundCanna's ReadyPaid system for improving cash flow management. Key speakers Terry and Sal presented various financial services and products, including lines of credit, buy now pay later options, and banking services, while highlighting the challenges faced by cannabis businesses in accessing traditional financial services. The conversation also covered potential industry changes through cannabis rescheduling and its impact on banking options, tax relief, and investment opportunities in the sector. Cannabis Banking and Funding Solutions The meeting focused on banking and funding in the cannabis industry, with Carp introducing Terry from Safe Harbor and Sal from FundCanna as key speakers. Carp mentioned an upcoming training grant release of up to $5 million at the end of February and discussed the importance of inventory management. Terry explained Safe Harbor's work on a Synergy product to facilitate access to funding, while Sal presented ReadyPaid, a new system connecting wholesale, retail, and cultivation to improve cash flow. The discussion highlighted ongoing challenges with banking and funding in the cannabis sector, as well as potential solutions and future developments. Cannabis Rescheduling and Tax Implications Terry Mendez, CEO of Safe Harbor, discussed the potential rescheduling of cannabis from Schedule I to Schedule III, which could lead to 280E tax relief and improved financial models for the industry. He noted that private equity and family offices have historically avoided cannabis due to its tax structure, but a rescheduling could change that. Terry suggested that operators prepare for these changes by working with tax providers to potentially negotiate an offer in compromise with the IRS for unpaid 280E taxes. He also mentioned that banking options for cannabis businesses have tightened up, but there is increased interest in the industry as its Schedule I classification is being challenged. Cannabis Banking: Challenges and Growth Sal discussed FundCount's involvement in the cannabis industry since mid-2021, highlighting their deployment of $250 million across 43 states supporting the full supply chain. Terry emphasized Safe Harbor's expertise and commitment to the cannabis industry, noting their 11-year track record and ability to prevent banks from suddenly discontinuing services. Carp and Sal agreed on the challenges and learning processes involved in banking for cannabis businesses, while Sal expressed optimism about the industry's growth and the potential for increased investment following recent regulatory developments. Cannabis B2B Payment Solutions Sal discussed ReadyPaid, a B2B buy now pay later AR solution for the cannabis industry, which was launched in December 2021. The product helps alleviate cash flow constraints by allowing vendors to get paid on day zero while extending no-cost net 30 terms to buyers. Sal explained that the onboarding process takes about a day, after which businesses can complete underwriting in 5-6 minutes. Sal also described FundCanna, a separate product offering lines of credit up to $250,000 with no non-usage fees, allowing businesses to draw on the line as needed and pay it off without penalty when revenue is received. Supply Chain Capital Deployment Strategies Sal and Carp discussed the flexibility of deploying capital and repayments aligned with different supply chain use cases, emphasizing the importance of cash flow in determining serviceability and funding amounts. Terry explained FundCanna's role in providing liquidity and managing financial stories, highlighting the significance of financial history, projections, and the ability to use capital judiciously. He also introduced Treasury Wealth Management Services and Payroll Boost, which offer solutions for cash flow management and employee benefits, respectively. Cannabis Industry Financial Management Challenges Carp and Terry discussed the importance of proper financial and HR management in the cannabis industry, emphasizing the need for specialized services and compliance with regulations. They highlighted the challenges faced by small businesses in hiring the right professionals and the risks of fraud. Carp shared insights on the limited number of banks that service cannabis businesses and the high fees associated with banking services in the industry. They also discussed the potential impact of interest rate changes on banking fees and explored opportunities to mitigate costs by attaching additional services. Cannabis Banking and Financing Challenges The discussion focused on cannabis banking and financing options. Terry explained that banks are being asked to do more rigorous due diligence, including reviewing SKU lists and ownership structures, which is unusual for traditional banking. Carp noted that while rescheduling cannabis might not significantly impact safer banking, it could lead to more traditional banks entering the cannabis banking sector, potentially lowering rates. Paul, CEO of an Oregon-based CBD extraction company, asked about financing options for purchasing biomass and extending terms to customers. Cannabis Business Financing Strategies The meeting focused on financing options for a cannabis business, with Paul seeking advice on whether to focus on raising capital immediately or explore cheaper financing options later. Terry advised exploring options but emphasized the risks associated with the cannabis industry, including supply and conversion risks. The group also discussed separating cannabis-related businesses from real estate holdings for tax and legal reasons, with Sal and Terry providing insights on structuring entities and managing banking relationships. The conversation ended with updates on upcoming training grants and shortage announcements from OCM.