Benzinga Chicago Recap: Is Every Cannabis Company Owed Money?
By Brett Gelfand
Are you owed money? This is the ONLY question we always ask from our booth at conventions. As you might be reading this now from the comfort of your office, or maybe in between meetings from your phone, you might find yourself with a little bit more time or mental space to really think about it... Is your company owed money in the cannabis industry?
The answer should be pretty straightforward; either yes, I am owed, what can you do for me? Or no, I am not owed. Still, after 7 years of going to these conventions, we always stumble upon the same type of answers:
A) (a few seconds of laughter) Who isn't? - And then proceeds to leave the booth.
B) Who are you and why are you asking me the obvious?
C) Yes, I am, but we know how to take care of those people (usually includes some muscle flexing while talking).
D) Oh man! I wish I had known about you guys a year ago! I was owed so much money from this company that just went out of business.
E) No, thank you...
We have realized that being owed money in the industry has become so normal and part of the day-to-day business that companies have started to 'assume' it is part of the deal. Do you want to succeed? You will have to extend credit and you will be owed money.
Good News or Bad News?
The bad news is that, yes, after being in the cannabis debt collection business for more than 6 years -and commercial collection business for more than 30 years-, you will, most likely, be owed money at some point.
It is also very true that the industry is pretty much being crushed, and we are far from being in a stable industry. Which inevitably leads to more A/R obstacles and past-due accounts.
Thankfully, we are also the bearer of good news. There are some things you can do to prevent and then, if needed, get your money back:
ALWAYS have some written proof of the transaction (contracts, invoices, etc.)
Have someone in charge of invoicing and charging on time. (More good news: we can also do your company's first-party work).
Create a good SOP for your team to know exactly when, how, and why to send an account to a debt collection agency.
Have us on speed dial in case you need to collect past-due money. (We recommend sending it to collections after 90 days of past-due).
Do your due diligence before extending terms to new clients by joining our sister company: The Cannabiz Credit Association!
Cannabis Debt Collection Expertise and Financial Advisory Services for Cannabis Companies
So now we ask you again: Are you owed money? Businesses in the cannabis industry often find themselves navigating a complex web of regulations and compliance requirements. It sounds scary and terrible, but at this point in time, you are either owed money already or very soon you will be. This is where our expertise in cannabis law and financial advisory services can be a game-changer for your company. We understand the challenges faced by cannabis businesses, and we can help you stay on the right side of the law while maximizing your financial success. At the end of the day, we have been doing this for quite a while. One piece of advice? If you have A/R past 90 days, send it our way! The quicker we get your claims, the better the chances of getting your money back!
Navigating Federal Cannabis Law and Debt Collection State Laws
The legal framework for cannabis companies is a patchwork of federal and state laws that can be incredibly challenging to navigate. While some states have legalized cannabis for medical or recreational use, it remains illegal at the federal level. This disconnect between federal and state law creates a host of legal and financial challenges, including debt collection.
We have a nationwide legal network with the best cannabis attorneys to help you navigate litigation. We can provide you with the guidance and support needed to protect your financial interests, and as in the collection side, we only charge a contingency fee, which means, you only pay our attorneys if they win your case.
The Cannabiz Credit Association: Your Partner for Success
To further bolster your financial stability in the cannabis industry, consider becoming a member of The CCA (Cannabiz Credit Association), dedicated to providing valuable insights and resources to cannabis businesses. One of the many tools at your disposal as a CCA member is their Debtor Database. This repository boasts over 5,000 flagged debtors nationwide, accounting for a staggering $93 million in bad cannabis debt. Imagine the possibilities when you have such comprehensive data at your fingertips:
· Assessing New Partnerships: Make informed decisions about potential collaborators, armed with critical financial insights.
· Monitoring AR Balances: Stay ahead of the curve, especially when dealing with overdue accounts receivable.
· Evaluating Collection Strategies: Determine the most effective approach when considering debt collection, with clear visibility into potential outcomes.
Conversation Starter
If we asked you at a convention if you are owed money, what would your answer be? Please feel free to contact us to start a conversation! We are here to ensure your financial success in the cannabis industry. Don't let unpaid debts hold you back. Contact us today and let us help you recover what's rightfully yours.
About Author: Brett Gelfand
Brett is an accomplished entrepreneur in the cannabis industry, with a talent for building successful brands and businesses. His career began in 2015 as CEO of a vertically integrated cannabis company in Colorado, where he gained extensive knowledge of the industry.
Later, Brett co-founded, PAQcase, a specialty child-resistant cannabis packaging business and served as CEO, successfully developing innovative packaging solutions that established the company as a leader in the space. His leadership and strategic vision were instrumental in achieving a successful exit in 2022.
Currently, as Managing Partner of CannaBIZ Collects, the nation’s first and leading cannabis collection agency, Brett leverages his expertise to help cannabis businesses navigate the complex legal and financial landscape related to credit and collections.
With a BBA in Finance from The University of Georgia, Brett brings a unique blend of business acumen and financial expertise to his work. Passionate about driving innovation in the industry, Brett continues to explore new opportunities and mentor aspiring entrepreneurs from his home base in St. Petersburg, FL.