Posted by Michael Saunders 02/25/2020 0 Comments
I recently read an article about a cannabis business from Anacortes, Washington being charged by the Securities and Exchange Commission (SEC) with defrauding investors of almost $5 million dollars (Barfield, 2020). It is alleged that the owners of Green Acre Farms pilfered investors out of millions of dollars in an elaborate Ponzi Scheme.
In spite of seemingly large receipts for cannabis sales, according to the SEC complaint, Green Acre Farms was never profitable during their nearly 4 years of operation. Instead of focusing in that time on turning an actual profit, producing clear results for their investors and following the laws and regulations in place, they were instead buying themselves expensive vehicles, yachts and other luxury goods to the tune of $3.5 million. However, like the phoenix, they flew a little too close to the sun.
Most people have heard the expression “the grass is greener, on the other side,” but what I’ve learned over the course of the little over a year I’ve been doing this is that the grass is greener where you water it. Taking the path of least resistance in this market is extremely tempting. In fact, there’s a strong pull that exists to engage in grey market activities here in Maine. This is something with which I occasionally struggle, especially if we aren’t meeting sales goals for a particular month. Though breaking the rules and selling to non-qualified individuals doesn’t help me sleep at night. It also doesn’t help a business leader truly understand the degree to which their business stands on firm footing.
You can sell a million dollars worth of cannabis in a year, but if you don’t have a way to pay taxes on it, don’t have a legitimate formation like a LLC through which you can file it, don’t understand your income tax liabilities, or maybe you have those things but fail to address profit/loss issues and a myriad other administrative and financial variables, your business will never survive in the long run. Case in point…Green Acre Farms.
Versus that of a traditional business, cannabis businesses have many more road blocks in their way than people realize, to include challenges with federal banking restrictions, inability to obtain business loans, the threat of federal prosecution and issues with respect to federal business tax exemptions. So, one can see why people panic, and scratch and claw for the future of their business over the short term to keep cash flowing, but there’s no long-term benefit to breaking the law.
Through our determination to follow the intent and letter of the rules governing caregiver activity under Maine’s Medical Marijuana Program, we’ve figured out a solution to a very unique problem—chiefly, how to operate legal, same day medical cannabis deliveries for MMMP patients and folks from qualifying states with a scalable model. This is a problem we would not have been able to solve had we been accepting Rec referrals all along.
In closing, this message can be extrapolated to fit any other human circumstance, to include relationships with our friends and family members, addictions to substances, our exercise and eating habits and the like. The grass is greener where you water it, so pay attention to where you’re watering, because good or bad, it will grow.