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Can Cannabis Help Cure Government and Bank Revenue Shortfalls?



Can Cannabis Help Cure Government and Bank Revenue Shortfalls?

By Andy Montgomery | Published July 1st, 2020

As COVID-19 again rises its ugly head amidst an opening of economies around the United States, it is becoming increasingly clear that a snap back of the economy is a naïve notion at best.  Americans will be living with this unwanted new normal for some period of time to come.  The aftermath remains uncertain, but the present is already having significant effects on our economy and way of life.  Government stimulus, which comes at a long-term cost, has provided a boost of adrenaline, but will eventually wear off. We are in the midst of a financial recession and there are no clear precedents to draw on which provide a guide to its severity or longevity. This means that both governments and banks need to find alternative sources of revenue.


Different from “the Great Recession” which began in 2008, this economic crisis will be far more impactful to Main Street businesses and not contained to an asset bubble.  Consumers just simply stopped all at once from popping into local businesses and, even with moderate openings, many retailers and restaurants have no chance to recover to pre-COVID conditions.  Add to that, virtual learning behaviors that are quickly being integrated as preferences in our daily lives. This lack in demand will work its way through various other supply chains and continue to wreak havoc on our economy for some period of time.

The impact of decreased tax revenues from Main Street economies is already being felt in municipalities and states around the nation.  It comes at a time in which they are already tasked with providing for the safety of citizens through extraordinary and costly measures.  This is quickly depleting the reserves of governments; most of which have no good alternatives to raise revenue.


Similarly, banks have only begun to feel the full impact of the crisis.  In the first quarter of 2020, bank revenues were down a whopping 70%.  Banks will certainly see some revenue boost as a result of the massive PPP effort, but the stimulus will wear off for them also.  Almost every commercial business in the country has been negatively impacted by COVID-19 and that will work its way into banks’ lending portfolios, earnings and liquidity.  The building momentum in the third and fourth quarters of credit contractions and bank layoffs could be as significant as 2008.


One source of revenue that is yet to be adequately optimized in the 33 states that have approved some form of legalized cannabis is maximizing the tax revenue from this growing industry.  Most state and local governments are collecting a fraction of the tax revenue that they intended from cannabis.  That is mostly because the illegal trade of cannabis is in full supply and provides harsh competitive pricing pressure on businesses that want to comply with the laws and regulations.  Law enforcement will readily admit that they do not have the financial resources or public will to put a dent in the illegal trade.  This keeps legal cannabis from operating at their optimum potential and from paying the tax revenues that are increasingly needed by state and local governments.

During a press conference in April 2020 New Mexico Governor Michelle Lujan Grisham (D) stated that she wished the legalization of recreational marijuana would have passed earlier this year as it would have offered additional revenue for a state with limited resources and a large outbreak of COVID-19. “If there was ever a time for wishful thinking, I wish we had passed recreational cannabis because that would be $100 million.”

Also in April, the U.S. Virgin Island Governor Albert Bryan Jr (D) began the process of revisiting cannabis legalization stating, “We have taken the time to gather further public input as well as address the concerns of the individual legislators,”…“As the economic disaster, the last few weeks has created has affected the [Government Employees Retirement System] greatly it is our hope that we can have a greater sense of exigency in implementing all the things that can help us regain solvency.”… “Certainly, cutting the annuity of retirees by 30 percent cannot be the path,” he said.


One way around relying on law enforcement to clean up the cannabis businesses is to have the banks do it.  That is why 34 Attorney Generals from states and territories across the country have signed a letter to Congress in support of the cannabis “Safe Banking Act.” But, as cannabis is still illegal federally, banks have no clear mandate or rules to follow from federal regulators to safely bank cannabis.  However, according to FinCEN data, approximately 525 banks and 185 credit unions knowingly banked cannabis clients in March 2020.  The Chairwoman of the FDIC, Jelena McWilliams, gave a clue as to how the federal regulator of banks would feel about their members banking cannabis as she has integrated the topic in all of her recent speeches and said that regulators would be okay with its members banking cannabis as long as they followed the FinCEN guidance and state regulations.

Denver, Colorado’s Audit Committee released a report stating, “The Treasury Division’s Audit Unit Is Not Effective or Efficient at Ensuring All Marijuana Taxes Are Reported and Paid.” The audit also lists specific findings and recommendations.

Recently, Colorado’s Attorney General Phil Weiser tweeted, “Crimes at #cannabis businesses are often driven by the fact that so many of them are all cash businesses. That’s why we led a coalition of State AGs to support @RepPerlmutter’s work on the #SAFEBanking Act, allowing such companies access to safe banking.”


The bottom line is that if banks capitalized on the nascent and growing cannabis industry it could add liquidity and profit at a time when they need it the most.  To safely bank cannabis they would need to vet the businesses and ensure they are complying with all of the laws and regulations, But, by integrating more cannabis related businesses into the banking system and migrating them away from dealing in an all cash world, the money goes directly into the economy and adds very inexpensive deposits and a new source of fees for banks.  It also makes those cannabis related businesses that are not legal and compliant,recognizable outliers that are easier to spot for law enforcement as they will continue to be forced to trade and live using all cash. 

Andy Montgomery is a former bank CEO with more than 25 years of experience in the financial services industry.  His experience includes founding community banks and working in executive positions for regional and money center banks.  He currently is the founder and CEO of HDCS, Inc., which provides consulting for financial institutions in engaging with higher-risk depositors.

Andy Montgomery is a contributing writer for Inland Empire Business Journal and former bank CEO with more than 25 years of experience in the financial services industry. Experienced Community Bank CEO and CEO and Founder of HDCS. Inc. and CBFS. HDCS (Higher-risk Deposit Compliance Solutions) provides comprehensive compliance solutions for financial institutions that engage with higher risk depositors including Cannabis Related Businesses and Cryptocurrency Businesses.

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Inland Empire Regional Chamber of Commerce to Lead California Delegation at GITEX GLOBAL 2023 in Dubai



Fostering Technological Synergy: Bridging the Tech Gap with Global Partners

Demonstrating the Inland Empire Regional Chamber of Commerce’s (IERCC) commitment to global tech collaboration and innovation, the organization will lead a California delegation to the world-renowned GITEX GLOBAL event in Dubai from October 16-20, 2023. Though the original invitation extended to IERCC’s President & CEO, Mr. Edward Ornelas, Jr., he will not be in attendance. Instead, the California delegation will be spearheaded by the Chamber’s newly-appointed CTO, Mr. Gabriel Rangel.

Organized by the Dubai World Trade Centre, GITEX GLOBAL 2023 promises to be grander than ever. The event is set to host over 6,000 exhibiting companies and startups, drawing more than 170,000 tech and business executives from over 170 countries. The mega-event will sprawl across 41 vast halls and, for the first time ever, will be held at two prominent venues – the iconic Dubai World Trade Centre and the new Dubai Harbour for Expand North Star, making it the host for the world’s largest startup event.

Mr. Edward Ornelas, Jr. commented, “While I regret not attending GITEX personally, I am proud to have Mr. Rangel at the helm of this effort. I’m confident that our delegation will foster new collaborations and present the Golden State as a tech powerhouse.”

This year’s conference adopts the compelling theme of “The Year to Imagine AI in Everything”. Attendees are poised to witness the grandest showcase of AI tech giants and industry frontrunners. Additionally, it promises to kindle profound dialogues and debates concerning the socio-economic implications of burgeoning AI technology.

“Leading the California delegation at GITEX offers us an unmatched platform to nurture and solidify relationships with global tech partners,” said Mr. Gabriel Rangel, CTO of IERCC. “As the technology landscape continues to evolve, it’s critical for us to be a part of these international collaborations. I’m honored to spearhead this mission on behalf of the Inland Empire Regional Chamber of Commerce.”

An integral part of the California delegation, Mr. Ram Thanapandian, Principal Technology Consultant to the State of California and Chair of CA State Treasurer Fiona Ma’s Technical Advisory Commission, will be present, providing invaluable insights and representing the State of California Treasurer’s Office.

IERCC’s leadership in organizing this delegation underscores the crucial role that California plays in the global tech ecosystem and mirrors Dubai’s ambitious vision as encapsulated in the Dubai Economic Agenda (D33). This strategy aims to substantially expand Dubai’s economic landscape in the upcoming decade, securing its stature among the world’s leading global cities.

Trixie LohMirmand, Executive Vice President of the Dubai World Trade Centre and CEO of KAOUN International, remarked on the invaluable contributions the California delegation will bring to the event. She looks forward to an event marked by knowledge-sharing, collaboration, and pioneering discussions.

For additional information on GITEX GLOBAL 2023, please refer to: GITEX 2023 Preview.

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Economist Christopher Thornberg, State Treasurer Fiona Ma Headline New Forecast Conference



Coming October 5th

Economic Horizon 2024: What Lies Ahead?

The Inland Empire Regional Chamber of Commerce, in collaboration with Beacon Economics and the County of San Bernardino, is thrilled to announce that the anticipated economic forecast conference, Economic Horizon 2024: What Lies Ahead, Inland Empire? will be held October 5th from 3:30 PM to 6:30 PM at the El Prado Golf Courses in the vibrant city of Chino, California.

Esteemed economist, Dr. Christopher Thornberg will present complete outlooks for the U.S., California, and Inland Empire economies. “The Inland Empire stands at the crossroads of remarkable economic opportunities and challenges,” said Thornberg. “I’m excited to unpack the trends and shifts that will define the region’s economic landscape in the next year, and beyond.”

Known for his razor-sharp observations, and fun, energized delivery, Thornberg’s presentation will include pointed discussions about inflation, the Fed’s next move, housing markets, strengths and instabilities in the economy, and what current trends mean for the nation, state, and local region.

The conference will also be graced by the insights of California State Treasurer Fiona Ma as keynote speaker. In her words, “The strength of California’s economy is deeply interwoven with the growth trajectories of its regions. The Inland Empire, with its dynamism and resilience, is a testament to this synergy. I am honored to join ‘Economic Horizon 2024’ and share a vision where policies, partnerships, and potentials converge to elevate the Inland Empire to unprecedented economic heights.”

“This conference is a testament to the collaborative spirit of the Inland Empire and our commitment to fostering a robust, resilient economy,” said Edward Ornelas, Jr., President of the Inland Empire Regional Chamber of Commerce. “Our partnership with Beacon Economics and the County of San Bernardino aims to offer a platform for profound economic discussion, forecasting, and strategic future planning.”

Attendees can anticipate not only expert insights into the economy but also networking opportunities and a chance to connect with key business, government, and nonprofit leaders from across the region.

Full event details are available at:

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Webb Investments acquires Silver Creek Industries, an industry leader in modular construction for schools



Webb Investments today announced the launch of a new company, Silver Creek Modular, after acquiring the assets of Silver Creek Industries, a highly respected modular construction company known for bringing innovative, sustainable and cost-effective solutions to the education industry. 

Silver Creek Industries’ existing business, including its employees and its Perris, Calif., manufacturing facility, will remain with the new company, with Webb providing the investment capital, resources and expertise to enhance Silver Creek’s presence in the modular construction marketplace.

The acquisition closed in June of 2023, following Silver Creek Industries’ Chapter 11 filing in the Central Bankruptcy Court of California.

“We are thrilled to have the opportunity to bring Silver Creek into our family business, and look forward to building on our shared commitment to improving educational opportunities within communities across our region,” said Kiana Webb, CEO of Webb Family Enterprises. “This acquisition aligns with our strategy to invest in established firms that can help us drive community revitalization and inclusive growth, while improving quality of life and increasing economic output.”

Silver Creek Industries was founded in 2004 and has completed more than 1,000 projects in the education, commercial, medical, military, government and multi-family housing markets. More recently, the company’s focus has been on providing high-quality, sustainable modular buildings for schools and educational institutions. Silver Creek Industries is well known for delivering projects on time and on budget, with minimal disruption to school and the community. 

Webb Investments is a privately held, family-owned company focusing on creating a community development ecosystem that drives inclusive, organic growth and transforms the areas they serve. 

For more information on Webb Investments, please visit

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