Florida’s enactment of the Compassionate Medical Cannabis Act of 2014 has legalized the use of low-THC marijuana, effective January 1, 2015. At the federal level, however, marijuana possession, use and growing activities remain illegal. Granted, even the U.S. House voted earlier this year to stop prosecuting simple medical marijuana cases and the President agreed, according to The Washington Times. Yet even with reduced numbers of arrests, anyone who operates a Florida marijuana business faces financial issues caused by the federal laws — in addition to those posed by state regulations.
Within the Law, Florida Imposes Financial Requirements
The new low-THC marijuana law in Florida does not take any part of the marijuana business lightly. As explained by the Florida Department of Health, the statute grants only a two-year approval cycle while making distributors jump through some significant regulatory and financial hoops, such as:
- Qualified businesses must show their financial ability to pay the operational costs over the entire two-year approval cycle, even before they earn any proceeds from their businesses.
- Each dispensary must provide certified financial documents to the state.
- Once approved, dispensaries need to post $5 million performance bonds. Even in industries such as construction where these bonds are common, the price for this type of bond can run as high as three percent of the bond’s value. Of course, bonds for cannabis businesses could run higher.
Failure to meet these requirements in full can take any business out of the running to operate one of the five dispensaries permitted in Florida. Even an approved marijuana business can lose approval if it fails to meet just one of the statutory regulations.
Federal Controlled Substance Laws Reduce Florida Banking Options
All businesses rely on banks and other financial institutions to keep sales proceeds safe, accept credit card payments and obtain more funds when needed. Unfortunately, financial institutions are limited by financial regulatory requirements that prevent them from doing business with illegal operations. Thus, federally-controlled substance laws typically prevent banks from storing or disseminating funds for any marijuana business.
One recent report from New Times Broward Palm Beach predicts serious challenges for Florida cannabis distributors. It points out that Colorado, one of the first states to legalize medical marijuana, has only now started allowing banks to support marijuana businesses. Additionally, new laws still impose many restrictions that may dissuade banks from taking on marijuana business accounts.
The bottom line is that cannabis entrepreneurs typically have limited options for handling their money effectively. This issue also places a target on their backs since criminals know where they can easily find massive amounts of unprotected cash on their premises.
Florida Cannabis Businesses Should Seek Legal Advice Early
Before any marijuana business opens its doors, it needs support from a Florida attorney who understands the risks and knows how to reduce them. Solutions are available to help protect individuals and their money until such time as the laws catch up with state laws — and mounting public opinion in favor of more lenient marijuana laws. To learn about the available protective options, call National Cannabis Law Firm at 844-WEED-LAW.