Imagine you run some sort of wholesale marijuana business. Maybe you’re a grower; perhaps you process plant material for manufacturers who use your cannabinoids to make retail products. Regardless of your particular business, you find that a certain number of your customers don’t bother to pay their bills. What do you do? Legally, you are between a rock and a hard place.

You have the legal right to try to collect what you are owed by virtue of the fact that you run a legitimate business. But wait. There’s a problem. The industry you are involved in is only legal at the state level. As far as the federal government is concerned, you are illegally dealing in illicit drugs. This presents a unique challenge. You are going to have a challenging time getting the law on your side in your attempt to collect.

Sending the Debt to Collection

The most straightforward option is to send the debt to collection. Your biggest difficulty is going to be finding a collection agency willing to take it on. Perhaps there are a few out there, but rest assured the collections industry isn’t beating down any doors to dominate the cannabis market.

Why the reluctance? Collection agencies are cannabis-averse for the same reason banks are, according to the medical cannabis experts Utahmarijuana.org. State-legal marijuana occupies a gray area of law and enforcement. Financial institutions, and those who do business with them, do not want to be caught on the wrong side. Many try to avoid cannabis businesses altogether.

Filing a Civil Lawsuit

In the absence of a collection agency willing to take your case, you could always file a lawsuit in civil court. Sue for the money owed plus court costs and late fees. Getting a judgment in your favor would give you additional legal tools to pursue those deadbeat customers. Just remember that enforcing a civil judgment is on you. Courts do not intervene.

Band Together with Other Cannabis Businesses

The reality is that collections and civil lawsuits do not offer cannabis business owners much hope. It’s just really difficult to collect from customers who choose to ignore your invoices. But that doesn’t mean you have to simply walk away and eat your losses. There is another solution just beginning to emerge within the industry. It involves cannabis industry businesses banding together to protect one another against deadbeats.

They are banding together through an organization known as Cannabiz Collects, an organization that bills itself as the very first cannabis business collection agency. They claim to have more than 600 marijuana and CBD clients.

In addition to taking on the role of collection agency, Cannabiz Collects also leverages its database of deadbeat customers to help others in the business avoid said deadbeats. Meanwhile, a California industry group encourages members to get together on a regular basis to swap notes. They are actually publishing lists of former customers they are warning others to not do business with.

Collections and a Blacklist

Combining Cannabiz Collects with industry blacklists creates a way for marijuana businesses to reduce the number of unpaid invoices that erode the bottom line. For all intents and purposes, the cannabis industry has taken matters into its own hands and found ways to use the limited legal tools at their disposal to combat deadbeats.

Interestingly enough, any other industry could do the same thing. It is not always necessary to go through formal collections and civil lawsuits, although both tools do have their obvious benefits. It’s just that those benefits don’t extend to the pot industry right now.