investing in marijuana
Marijuana Business News

Bridging The Marijuana Financial Gap

investing in marijuana
(image via potnetwork.com)

If you are in the marijuana industry, I hope you participate in the research project below. I have been talking to Justin via e-mail, and I can’t wait to see what his academic research finds out:

By Justin P. Breidenbach, MAcc, CPA, CFE

What makes a successful marijuana business? Depending on your position in the market, this question will bring up a multitude of answers. To me, as an academic and accountant, success for a business in the marijuana industry is one that can produce a reasonable and sustainable profit. If a business can continue efficient operations in the future it ensures products for customers, a paycheck for employees, and a return of profits to owners.

It is this idea of success that began my journey into the marijuana industry. As an experienced accountant, and inquisitive academic, I was (and still am) curious as to how successful marijuana businesses can be moving into the future. Will there always be hurdles that are just too high to jump, or will a handful of players win the game at the end of the day? This is always a hard question to answer no matter what the industry, but it becomes especially hard if there is a lack of objective data.

Not a day goes by that I don’t remind my students why accounting is important. Accountants are the individuals that provide useful information to decision makers – cue superhero music and pan to an accountant confidently standing up and looking to the sky with a calculator in hand. All joking aside, I take my role as an academic and accountant seriously as I have often been the point person to provide data to business professionals to better understand operations.

For this reason, I traveled around the United States this past year to meet with marijuana business professionals to better understand their hurdles and gain valuable insights on industry data. My travels have allowed me to meet outstanding people who work in the areas of production, processing, and retail. While grit and determination are definitely not lacking in these business professionals, I have been surprised by the lack of data or benchmarking available to the overall industry.

Don’t get me wrong, I have come across market research or support service organizations that collect data on the industry. However, it has appeared to me that this data comes with a steep price tag to access, limited data points are used, or data is presented in a way that doesn’t present the entire picture and appears to drive market participants towards a monetized product or service. Are these types of practices limited to the marijuana industry? Absolutely not! As with any “gold rush”, if you aren’t the one mining for gold then you might as well be providing the pickaxes.

It’s my belief that this is where the role of academics and research can bridge the financial gap that is significant in the marijuana industry. This is an opportunity to provide assistance in mining data, evaluating trends, and determining how success is being gained and sustained. My goal as an academic and accountant is to never stop seeking knowledge and continually investigate the business world around me. The endgame being that my research may intellectually stimulate my colleagues, my students, and stakeholders within and surrounding the marijuana industry (or having aspirations to do so) in order to achieve personal and professional success.

It is at this time that I offer collaboration between the industry and the world of academics to create this bridge. From an academic perspective, I am working to gather financial data from marijuana producers, processors, and retailers. Participants can be of any size and from any region. This will provide an opportunity to better understand the industry through numbers and provide information relating to trends, operational efficiencies, taxation effects, and other unique business metrics. The best part is I am not looking to be a provider of pickaxes for a fee. My goal is to obtain data and provide information back to stakeholders in a non-monetized format as that is what knowledge is all about.

Justin P. BreidenbachPlease feel free to reach out to me (jpbreide@owu.edu) if you would like to discuss this research further along with opportunities to participate.

Justin P. Breidenbach, MAcc, CPA, CFE serves as an Assistant Professor of Accounting at Ohio Wesleyan University (Delaware, Ohio). Justin instructs courses relating to financial accounting, taxation, and audit & assurance services. Additionally, Justin has had extensive professional work experience in public accounting and has provided services to organizations operating in the fields of agriculture, manufacturing, distribution, service, and not-for-profit.

  • knowa1

    How do we un entrance the prohibition industry which cost society more than $50 Billion a year and is History’s most golden cash cow. That’s a lot of high paying jobs that would vanish overnight with no replacements job other than what will come with canna prosperity. The demographics have changed and the internet has exposed the truth about cannabis prohibition. There is no where in the constitution that makes prohibition legal or is there any scientific justification for its prohibition. Maintaining prohibition is Constitutional treason

  • Forrest Anderson

    VICTIMS OF UFCW REPRESENTATIVE DAN RUSH contact: danrushvictims@yahoo.com
    Because a tainted voice is no voice at all!
    https://www.youtube.com/watch?v=zKARXRqChK0

    Rush was released on bond and bail was set at $500,000. Rush’s next scheduled appearance is September 23, 2015, at 9:30 a.m. for arraignment before the Honorable Kandis Westmore, U.S. Magistrate Judge, in Oakland.

  • Forrest Anderson

    Union Organizer Indicted for Corruption, Attempted Extortion, and Money Laundering
    UFCW Organizer Dan Rush Charged with Using His Position to Personally Profit

    U.S. Attorney’s Office September 17, 2015 Northern District of California (415) 436-7200

    OAKLAND—A federal grand jury in Oakland indicted Daniel Rush today with taking illegal payments as a union employee, honest services fraud, attempted extortion, and money laundering announced Acting United States Attorney Brian J. Stretch and Federal Bureau of Investigation, Special Agent in Charge David J. Johnson.

    According to the indictment, Rush, 54, of Oakland, is alleged to have used his position as a union organizer with the United Food and Commercial Workers (UFCW) to obtain money and other things of value over a five year period from 2010 to 2015.

    Rush was an organizing coordinator of the medical cannabis division of the UFCW. The indictment alleges that, while a union employee, Rush accepted $550,000 in debt forgiveness from an individual affiliated with medical marijuana dispensaries. According to an affidavit filed by an FBI agent in connection with a criminal complaint filed in the same matter, Rush and a coconspirator formulated a scheme to obtain debt forgiveness in exchange for favorable treatment by the union. The individual who agreed to the debt forgiveness was cooperating with the FBI’s investigation at the time Rush proposed the arrangement.

    The indictment also charges Rush with taking kickbacks from an attorney to whom he had referred medical marijuana dispensaries as clients. Rush, the indictment alleges, had a duty to provide honest services to the UFCW; that duty including refraining from self-dealing when interacting with the marijuana dispensaries whose workers it was his job to organize. Rush is charged with engaging in a scheme in which he violated that duty in exchange for kickbacks from the attorney.

    The indictment further charges Rush with taking kickbacks from the same attorney in exchange for arranging for the attorney to represent clients in worker’s compensation matters. Rush was an officer and director of an advocacy organization for the working poor. Rush directed the organization’s referral of worker’s compensation clients to the attorney. In exchange, the attorney provided Rush with a credit card on which Rush charged thousands of dollars of personal expenses which ultimately were paid by the attorney.

    Rush also is charged with attempted extortion. Rush was a member of the Berkeley Medical Cannabis Commission, which is a commission of the City of Berkeley organized to facilitate the appropriate licensing and regulation of medical marijuana in the city. Rush demanded a well-compensated job from a prospective medical marijuana dispensary in exchange for his influence as a member of the commission.

    In addition, the indictment alleges that Rush engaged in a conspiracy to commit money laundering and financial structuring, as well as substantive money laundering. The indictment and FBI agent’s affidavit filed in the case explain that Rush took a loan totaling $600,000 in cash from a person engaged in the marijuana business. Rush and the attorney engaged in a series of structuring transactions designed to obscure the origin of the money. Over the ensuing years, Rush required the attorney to fund interest payments on the loan and, when Rush ultimately was not able to repay the loan, he offered favorable union benefits in exchange for forgiveness of the loan.

    In sum, Rush was charged with taking illegal payments as a union employee, in violation of 29 U.S.C. §§ 186(a) and (b); honest services fraud, in violation of 18 U.S.C. §§ 1341, 1343 and 1346; attempted extortion, in violation of 18 U.S.C. § 1951; conspiracy to commit structuring and money laundering, in violation of 18 U.S.C. § 371; and money laundering by concealment, in violation of 18 U.S.C. § 1956(a)(1)(B)(i).

    The investigation began with cooperation from individuals in the medical marijuana industry who reported Rush’s allegedly corrupt activities. According to the affidavit, the attorney with whom Rush was working has been cooperating with the FBI and has agreed to plead guilty to offenses related to the charges against Rush.

    Rush was originally charged by criminal complaint and arrested in Oakland on August 11, 2015, and made his initial appearance in federal court in Oakland on August 12, 2015. Rush was released on bond and bail was set at $500,000. Rush’s next scheduled appearance is September 23, 2015, at 9:30 a.m. for arraignment before the Honorable Kandis Westmore, U.S. Magistrate Judge, in Oakland. The case has been assigned to the Honorable Haywood S Gilliam, Jr., U.S. District Court Judge, in Oakland.

    An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. The defendant faces a maximum term of imprisonment of 20 years if he is convicted of the charges of honest services fraud, attempted extortion, or money laundering, along with a fine as much as $500,000 and restitution if appropriate. If the defendant is convicted of accepting an illegal payment as a union employee or engaging in a criminal conspiracy, he faces a maximum term of imprisonment of five years. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

    The case is being prosecuted by the Special Prosecutions and National Security Unit of the U.S. Attorney’s Office in San Francisco and investigated by the FBI.

    This content has been reproduced from its original source.