It’s another hot week on the Texas Gulf Coast. For yet another day, when I went on my mornrning run at 4:45 am, the temperature was 84 degrees. And with humidity, it was a heat index of 96.
This Was The Coolest Time Of Day
It’s about now that we start longing for the cooler days, which down here won’t come until after Halloween. Sure, we’ll get a cool mornrning here and there. But things don’t turnrn around here before some time in November, which seems like forever.
Between now and then, I’ll keep running before daylight and drinking plenty of fluids. But it’s not all bad. With so much sunshine and warm weather along the coast, plenty of people are interested in my new side hustle, renting out golf carts.
My Side Hustle
The business, which I’ve described here before, is straightforward. My business partner offers golf carts for rent on the main drag on Galveston Island. What’s more, he’s the only provider by a fluke of local traffic law.
The business has been running for about five months and is doing well, but there was one aspect we had to address… cash.
At first, we accepted cash, but it’s hard to track, has to be secured, is a temptation for abuse by employees, offers no recourse if someone damages a cart, and puts the business at risk of theft. We stopped taking cash after 45 days and haven’t missed it.
Imagine if we didn’t have a choice. Think about all the issues with verifying every transaction, making the right change, storing thousands of dollars each day on site, transporting cash for deposit each weekday, watching employees to guard against leakage, whatever. In a world set up for credit cards and Apple Pay, it would have been a disaster. And this is just for my small, but thankfully growing, golf cart business!
Now, multiply those problems by the size of the cannabis business, and you’ll get a sense of what that industry faces – because it mostly runs on cash.
With marijuana still illegal at the federal level, banks and other nationally regulated or licensed institutions are hesitant to get into the business. This leaves cannabis businesses at every level dealing with mounds of cash. They have to secure it, track it, and transport – all of it! In 2018, Colorado alone collected $270 million in taxes on marijuana sales, much of it paid in cash!
But Those Days Could Be Ending Soon…
The Senate Banking Committee is holding a hearing today on the Safe and Fair Enforcement (SAFE) Banking Act, which has been championed by Senators Jeff Merkley (D-OR) and Cory Gardner (R-CO). A House committee already passed a companion bill. The hearing in the Senate committee gives the legislation new life and moves it one step closer to becoming a law.
The bill will provide safe harbor to companies that provide services to cannabis businesses in states where it’s legal, which will open the door to credit cards and other payment services, national accounting services, and a host of other things that will make the cannabis industry more efficient.
And the legislation will do something else…
It Will Bring In The Big Guns
Because they have a “get out of jail free” card, large national and multinational service companies will be free to get into the business without worrying about running afoul of the federal governrnment, which will create a rush to gain market share in what will be one of the biggest growth industries in the country for years to come. The onslaught of competition should bring down prices, boost profits, and even increase investment in the space.
Banking, like state-by-state legalization and federal inclusion on the Schedule I Drug list, remains an obstacle to growth in the marijuana industry. Every time one of these impediments falls, the potential for business grows. In both my Fortune Hunter service and Adam’s Cannabis Paydays, we’re working to find investments that will grow exponentially as the business expands.
The key is to stake out a position before the changes happen, so you can benefit every time the cannabis industry clears another hurdle.