At first, chief executive officer of Alterna Savings & Credit Union Ltd., Rob Paterson, dismissed the idea of working with entrepreneur Bruce Linton. Linton’s dream was to transform an abandoned Hershey Co. chocolate plantinto a medical marijuana factory. However, he had run into a huge problem: bank after bank turned his business plans down.
After having countless doors closed in his face, he finally found middle-aged banker Rob Patterson. While uninterested initially, Patterson spent a few months going over Linton’s business plan. To his own surprise, Patterson was impressed by what he found. He reported to his team: “Look, why would we not do this business?”
Three years later, Patterson has become the go-to banker for the pot industry. And Linton? His company, Canopy Growth Corp., now utilizes a 650,000-square-foot pot facility in Smiths Falls, Ont. – an area rebounding following the shutdowns of the Hershey and Stanley Works tool plants a decade ago. “Chocolate Shoppe” in golden letters now graces the interior wall of the facility in tribute to past glory. Canopy Growth is now the world’s largest publicly traded marijuana producer, with a market value of more than C$6 billion ($4.6billion).
The State of Marijuana Dispensary Funding in the U.S.
Canada has given a glimpse of what many hope the future will bring in the U.S. for financial services companies that are willing to take the risk of working with legal medical marijuana companies. As of now, most U.S. marijuana dispensaries are forced to operate in cash only. This not only exposes couriers to robbery, but it also scares away many banks wary of the industry following U.S. Attorney General Jeff Session’s resolve to enforce federal laws banning cannabis.
“If you’re a major institution, life’s too short to take a risk of being in violation of United States federal banking laws,” says Dorsey & Whitney LLP attorney Christopher Barry, who advises cannabis companies on cross-border financing and regulatory issues.
This is where alternative lenders have played a pivotal role in marijuana dispensary funding in the U.S. High-risk providers often specialize in working with marijuana merchants and are more than comfortable helping these businesses safely and efficiently operate. For now, their expert services continue to be U.S. marijuana merchants best and most secure option.
Author Bio:As an account executive, Michael Hollis has funded millions by using alternative funding solutions. His experience and extensive knowledge of the industry has become a true asset for First American Merchant.