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The Business of Marijuana: This Ain't No Monkey Business!

“Monkey Business” is an idiom meaning “shenanigans," “nonsense,” and even “mischief”. For some, it is difficult to imagine the marijuana industry as anything but “monkey business." After all, marijuana use, sales, and cultivation is still illegal at the federal level, formal banking for marijuana businesses remains elusive, and tax rates on marijuana operations are generally much higher than those of most businesses. Besides, “it’s just pot."

It may come as a surprise to all but a sliver of the general public that despite the glaring differences between marijuana and other industries, the business of marijuana attracts hundreds of millions of dollars annually in private loans and investment capital from highly sophisticated investors. Corporate terms such as “limited liability company," “subscription agreement," and “board of directors” are no strangers to the marijuana world. While many existing marijuana businesses lack the sophistication typically associated with more established and legalized vocations, many marijuana enterprises in Colorado and around the country operate with an extremely high level of business savvy.

Why, you wonder? A few notable reasons come to mind. First, the legalization of marijuana is more than just a political or philosophical achievement - it is an opportunity to make money. Second, capital infusions are critical to the success of many marijuana operations and lenders/investors are not likely to throw money at a business that does not have a profit motive. Third, the significant financial, regulatory, and legal hurdles facing the marijuana industry require the knowledge and expertise of seasoned business persons and advisors to prosper.

Those who think the marijuana industry is run by a bunch of stoners peddling an illegal plant with little regard for the “bottom line” should think again. To the contrary, many in the industry recognize marijuana’s upside and choose to conduct their operations as they would any mainstream business.

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Categories: Marijuana