Collection issues in the cannabis industry.
By Danny Batler
With new cannabis investors and entrepreneurs rushing to be a part of today’s “Green Rush”, it is not surprising that collections and accounts receivable management may be pushed to the background. Many canna-businesses today either do not have the personnel, systems, or business knowledge to properly manage their outstanding accounts receivables and payables. With banks still hesitant to work with cannabis companies, it makes financial logistics even more complicated for these up and coming marijuana start-ups.
Cannabis collections is now becoming a more pertinent issue as many business begin to extend credit terms to cannabis companies in order to increase sales and presence in the competitive industry. Without proper credit applications, invoices, and basic procedures, companies releasing credit terms to cannabis companies are now facing big issues with regards to collections. Either the debtor “forgot” to pay, is going out of business, or is simply avoiding payment; these outstanding claims cause massive headaches and cash flow hurdles for creditors in the cannabis industry.
CannaBIZ Collects, founded by two executives in the cannabis industry, recognized the need to assist businesses in this space with their outstanding collections and accounts receivables. A business that is owed money from uncooperative debtors is stuck in a position to either a) work the collections in-house (cost depends on salary of staff member) b) hire a costly hourly attorney to attempt the collections c) work with a collection agency whose fees are typically based on complete contingency. Depending on the status and standing of the claim, it is wise to contract a collection agency such as CannaBIZ Collects to make contact and reach settlement with the debtor, before considering further legal lawsuit or action. There is much work involved with non-responsive debtors, with the risk of an unsuccessful attempt to collect. CannaBIZ Collects offers our clients the peace of mind to focus on positive growth in their business, while we focus on retrieving their hard earned revenue to put back in their operations.