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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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Local Veteran and His Family Open New Graze Craze Charcuterie Business in Murrieta, California



Southern California wine country gets another stylish culinary option, offering beautifully designed, hand-crafted grazing boards and picnic boxes

Graze Craze® has opened a new location close to the wine country of Southern California, where its artfully arranged sweet and savory grazing boards and boxes create a perfect pairing for food lovers. Located at 24530 Village Walk Place, Suite C, in Village Walk Plaza, the 1,021-square-foot store is owned and operated by disabled veteran Chris Stout and his wife, Stephanie Stout, with assistance from their teenage children.

At Graze Craze, highly trained experts known as Grazologists™ skillfully design charcuterie arrangements that feature an assortment of fine ingredients perfect for grazing, like fresh fruits and vegetables, premium meats and cheeses, artisanal sweets, nuts, house-made jams and more.

Chris Stout enlisted in the U.S. Navy in 2001 and served several deployments before being discharged in 2012. Since then, he has worked as a field service engineer for an electronics company and in manufacturing sales. Stephanie Stout has a bachelor’s degree in business accounting from the University of Phoenix and worked for an insurance broker before the couple’s first child was born; she then devoted herself full-time to raising their three children, who are now in high school.

Graze Craze charcuterie boards offer something for every lifestyle, dietary preference or palate and are available in a variety of size options to cater to any occasion, big or small. They incorporate a medley of flavors, like the fan-favorite Gone Grazey board, a perfectly balanced mix of cured meats, premium cheeses, crackers, fresh produce, nuts and more. The Vegegrazian is impeccably designed with a plethora of fresh fruits and vegetables for anyone embracing a plant-based lifestyle. Those with an undeniable sweet tooth can enjoy the Sweet & Grazey, a hand-crafted board featuring an abundance of delectable desserts like chocolates and baked goods paired with sweet dips to accent the irresistible flavors.

New to the Graze Craze menu is the Brunch Board, a gourmet and innovative twist on any morning routine. Packed with breakfast meats, fresh fruits, eggs, pastries and more, this board is the perfect bagel-and-donut brunch alternative. Grazers can also tackle watch-party cravings with a seasonal Game Day Board, featuring a feast of

crowd-pleasing ingredients, like peppered salami, Italian prosciutto, goat cheese, cranberry walnut bread, raspberry jam and chocolate bark, to name a few.

The artisan-inspired charcuterie offerings at Graze Craze are available in different size options, from Char-Cutie-Cups and Picnic Boxes for nibbling to sharing-size boards with enough fresh food to feed a large party. The food displays are ideal for elevating work meetings, family gatherings, lavish events and more, while they also make for memorable gifts that impress.

Besides sharing the flavorful menu with the area, the Stouts are actively involved in numerous local school, business and community organizations. The pair supports the Murrieta Valley High School Marching Band Boosters and California High School Rodeo Association District 8, in addition to the Boy Scouts of America California Inland Empire Council and Friends of Temecula Troop 309, where Christopher Stout is a part of the adult leadership team. The couple has also worked with Homes For Our Troops, an impactful nonprofit organization that builds specially adapted homes for post-9/11 disabled veterans.

Graze Craze Murrieta is open for pick-up, catering and free local delivery Monday through Saturday from 9 a.m. to 6 p.m. and Sunday from 10 a.m. to 2 p.m. For more information, call 951-942-7293.

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Partners in Action: How CalOSBA is bridging the gap in funding and resources for Inland Empire small businesses



By Josaline Cuesta, California Program Director, Small Business Majority & IEBJ Content Contributor

For Tara Lynn Gray, Director of the California Office of the Small Business Advocate (CalOSBA), entrepreneurship has always been a core principle of her life. Her journey as an advocate for small businesses wasn’t built on textbooks, but on her family’s roots in small business ownership. As a young girl, she watched her grandmother empower and elevate Black women’s presences by styling their hair and instilling confidence in their personhood. She witnessed the direct impact of small businesses on community members in real time, and that’s always stayed with Tara.

As a key partner of Small Business Majority, she stands as a champion for the dreamers and risk-takers; the pillars of the communities across California and in the Inland Empire. I chatted with her to share more about her work at CalOSBA, what entrepreneurs can expect when they meet with a CalOSBA advisor, and the resources and community support available to help boost entrepreneurship in the Golden State.

Tell us about CalOSBA’s role in the small business community.

“California has the biggest small business community in the country, accounting for 4.1 million small businesses in 2023 alone. The overwhelming majority have no employees at all, except themselves, which means they don’t have a Board of Directors, expensive consultants, and they definitely don’t have lobbyists. I take my role as their advocate seriously, talking with and listening to small business owners from up and down the state. During the pandemic, we were under a very bright spotlight, administering nearly $5 billion in direct relief funding and we’re proud of the grant programs we still oversee. But that’s only a small part of what we do at CalOSBA.

My team connects small business owners to information and resources to help them get started, manage their business and, most importantly, to grow. If they’re looking for help, we want to be the first door they knock on. In addition, we offer Outsmart Disaster training, which focuses on how to mitigate risks associated with natural disasters and recovery avenues available to them. I always say the flagship of our office is our support for the statewide network of Small Business Centers, providing 1:1 business assistance and training for small business owners of all industries and in dozens of languages. In addition, supporting partners that deliver these services–all the federally funded centers like the Small Business Development Centers and the Women’s Business Centers but also Chambers of Commerce and other nonprofits—is a core function of my office. And a big source of pride because we know what a difference they make for their clients.”

What can small business owners expect from meeting with a California Small Business Center advisor?

“Small business owners can expect to meet someone who is fully invested in them. Our Centers cover the full spectrum of business needs, from writing a business plan and obtaining the right permits and licenses, to finding capital, planning a succession strategy and marketing to e-commerce. Our business advisors provide the experience and the objective perspective to help business owners optimize their best assets: ideas, energy, and ability to keep adapting and learning. And they do it because they love helping other people succeed. What’s more, business ownership can become isolating and it may be challenging for entrepreneurs to find assistance. But they don’t have to go at it alone–and they shouldn’t, when these no-cost and low-cost services are available to them.”

What’s the most rewarding part of your role at CalOSBA?

“I always say I have the best job in the state. And it’s because I frequently have the honor to watch someone’s dream come true. I love a ribbon-cutting ceremony–Every time, big or small. It means someone dreamed of accomplishing something and worked hard for it: They opened the doors to their business, they made a sale, and hopefully they will hire their first employee and then it’s off to the races. But no matter what happens to that business, that ribbon-cutting is a milestone they made happen for themselves. There are many other events I get invited to, where you can just see the hope and pride, and even fear in their faces. I’m often overwhelmed by the sheer emotion of it, and I’m always humbled that I get to participate in that person’s big milestone.”

What are some new programs that can benefit small business owners in the Inland Empire?

“The number one question my office gets asked is how to access small business financing. To help address this key need, we’re launching the Technical Assistance for Capital Readiness program this February. The program is part of a bigger effort to fill well-known funding gaps in the state to benefit very small businesses and Socially and Economically Disadvantaged Individuals (SEDI). Through investments from the U.S. Treasury, the State Treasurer’s Office and IBank, the program is going to support lenders to facilitate “high risk” loans that they normally would not approve.

In addition to supporting lenders, my office also received $25.3 million in U.S. Treasury funding to start the new Capital Readiness network. The Capital Readiness Coaches in this network will help business owners get ready for the lending marketplace, help them make the best choices in a high interest-rate environment, and optimize the use of the capital once they receive it. The network is also designed to help spread the word about this opportunity to these SEDI-owned businesses, and some of those partners will be focused on supporting the Inland Empire small business ecosystem.”

How can business owners get in touch with CalOSBA?

“That’s simple! Check out and sign up for our monthly newsletter, where I write a column and showcase success stories from our network, along with deadlines and updates on grant and workforce support programs. We’re also on social media, so I would encourage business owners to check out all of our channels.”

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2024 Banking & Financial Industry Outlook: Where Knowledge Meets Opportunity in California’s Financial Landscape



In an age where financial trends rapidly evolve and economic landscapes shift with increasing unpredictability, the Inland Empire Regional Chamber of Commerce stands as a beacon of knowledge and opportunity. It proudly announces its sold-out annual event, the Financial Industry Update, an exclusive gathering tailor-made for California and the Inland Empire region. This prestigious event is set to unfold on January 18, 2024, at the Ontario International Airport Authority Conference Center, promising an enriching experience for attendees.

A Gathering of Minds in the Financial Sphere

The Financial Industry Update is more than just an event; it’s a crucial nexus for professionals, businesses, and community leaders keen on gaining a deeper understanding of the financial nuances specific to California and the Inland Empire. This year’s event is particularly significant, given the rapid changes and challenges facing the financial sector in the region.

Keynote Speaker: A Treasury of Knowledge

Leading the charge is none other than California State Treasurer Fiona Ma, a figure renowned for her acumen in public finance, economic development, and responsible fiscal management. Her role as the keynote speaker underscores the event’s stature, offering invaluable insights into the financial future of California and the Inland Empire.

Featured Speakers: A Diverse Spectrum of Expertise

Joining Treasurer Ma is a lineup of distinguished speakers, each bringing unique perspectives and expertise:

  • Ivo Tjan: As the Chairman, President, and CEO of CommerceWest Bank, Tjan’s journey from founding the company to leading it through an IPO is nothing short of inspirational. His leadership and insights are eagerly anticipated.
  • Hilda Kennedy: The Founder/President of AmPac CDC and a trailblazer in local government and economic development, Kennedy’s impact on small businesses and community financing is profound.
  • Edward Ornelas, Jr.: The visionary force behind the Inland Empire Regional Chamber of Commerce, Ornelas’s innovative approaches to business and economic development have redefined the region’s business narrative.

Event Highlights: More Than Just Talks

The event promises more than just insightful presentations. It’s a unique opportunity for networking, where professionals can connect, collaborate, and engage with potential partners and influential community figures. The interactive Q&A sessions will allow attendees to delve deeper into subjects, clarifying doubts and gaining more profound knowledge.

A Confluence of Opportunity and Expertise

This event symbolizes the intersection of knowledge and opportunity in California’s dynamic financial landscape. It’s a platform where insights are shared, connections are made, and the future of the financial industry in the Inland Empire is contemplated and shaped.

As January 18 approaches, the anticipation among California’s financial community continues to build. This event is not just a meeting of minds; it’s a forge where the future of financial industry trends and strategies will be hammered out, shaping the economic future of the Inland Empire and beyond.

For more information about the event and the Inland Empire Regional Chamber of Commerce, visit

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