Ashley Elsner, CEO and Founder, artery Inc.

Thinking Outside The Bud - Ashley Elsner

Ashley Elsner, CEO and Founder, artery Inc.

Ashley is CEO and Founder of artery Inc.She is a FinTech expert with 14 years of global financial law, regulation and operations experience. Prior to artery, Ashley cofounded and was Vice President of Operations forGreenshoeAsset Management, an online hedge fund investment platform. She managedthe investment process and financial regulatory compliance of $600M+ transactions for Bessemer Venture Partners in their legal and operations group, including interests and responsibilitiesfor LinkedIn’s IPO and Amazon’s acquisition of, among many other exits, anddeveloping the regulatory compliance strategies for India’s new Foreign Venture Capital Investors and Foreign Portfolio Investors laws.


[00:00:01] You're listening to Thinking Outside the Bud where we speak with entrepreneurs investors thought leaders researchers advocates and policymakers who are finding new and exciting ways for cannabis to positively impact business society and culture. And now here is your host Business Coach Bruce Eckfeldt.

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[00:01:07] Welcome, everyone. This is Thinking Outside the Bud. I'm Bruce Eckfeldt. I'm your host. And our guest today is Ashley Elsner and she is founder and CEO of artery Inc. Who has developed artery payments, which is hopefully solving some of the banking challenges we have here in cannabis space. So we're going to talk a little bit about that. Talk about the product. Talk about what the future is in terms of banking and financing in Canada. With that, Ashley, welcome to the program.

[00:01:32] Thank you so much for having me. Bruce, I'm really happy to be here.

[00:01:35] So I always like to have guests talk a little bit about their backgrounds at Piccadilly. How did they get into cannabis? So I know you came out of the banking and finance. Tell us a story. What got you into the cannabis space?

[00:01:45] Sure. So there is this incredible crux that's going on right now that is basically cannabis sits at the intersection of banking policy and and a couple of other things that are very interesting to me. So it was one of those things that from a passion perspective, I feel very strongly about cannabis being available for medical purposes. I actually about a year and a half ago, after I had started researching this project, started using for neuropathic pain myself and found it incredibly effective for for my own condition. And so it's something that has made me even more passionate about the industry. It's something that I think a lot of people misunderstand. And the the banking issues on that, I was surprised that they still exist, actually, because actually legal cannabis has has had from the medical perspective, has been legal in California for over 20 years. So it seems very strange to me that they were still having all these cash management issues. And that ends up leading to a lot of problems with respect to how you can handle enforcement, because that's really how we track it's how we track business behavior is through transaction reports. And if that's not happening, then there's this black box surrounding best about how they're actually operating. And so from the perspective of banking, that makes it even scarier to try to work with them because there's all of this legacy problem and they don't really know what practices are going on. And it's not getting it ends up being circular. Of course, because well, the problem is that they're not banks and have, you know, all of that transaction data.

[00:03:18] If they were so so it ends up a bit of a circular argument. And to me, it's something that I couldn't ignore. The physical risk that people take on through keeping cash in their business and having to deal with cash management is just a it's a huge problem and it's something that I don't think that small businesses should have to deal with. I don't really agree with certain aspects of how to approach high risk industries. I think they are the ones that are most important to bank. And I feel that there is some responsibility on the banking side where they have the capacity to do it. But there is a lot of fear and it's justified fear. But at the same time, it is also, in my opinion, a bit of an a neglecting of duties that they have to support the economic structure of the United States. So it gets it gets into a lot of deep political. Yeah. Me as well as responsibility and civic responsibility. So it's a problem that is fixable and it's fixable with fintech. And we're actually finding that a lot of financial institutions are willing to work with this industry if they have the level of transparency that they need to get rid of that black box. Yeah. So my apologies for the very long winded intro on that, but it is a passion piece for me from a lot of perspectives.

[00:04:34] Yeah, I always find it best. I think everyone I've spoken to in this industry has.

[00:04:39] I mean, there's a kind of a logical, rational reason to kind of get involved and opportunities, you know, opportunities in business and making money. But then there's also just about everyone has some kind of personal connection, you know, a family member who, you know, is going through a medical situation and has found relief using a kind of product, you know, personal use, you know, all sorts of reasons.

[00:04:57] So thank you for sharing that.

[00:04:58] I think the one thing I'd like to kind of start with and this might be a tar ball in terms of figuring out how to explain it, but I think the common perception or the common discussion is, oh, well, you can't bank if you're a cannabis based business or if you're a plant touching business, you can't get banking services. You know that they won't give you an account. They'll shut you down if they find out you're dealing cannabis, that, you know, they're gonna close all your accounts. And my as much as I understand this is practically while that might be the case, in many respects, it's a little more complicated. And it's not that it's illegal or they can't bank with you. Is that. Banking with a cannabis company that deals in cannabis gets very complicated for them. Can you give us a little bit more insight or why? I mean, from the banking side, why does this become hard in terms of banking? Cannabis based businesses?

[00:05:43] It has to do with the compliance requirements for the industry. This is a and I hate to put it this way, but there is a cost benefit analysis that goes on when you start discussing whether you want to work with an industry or not. And banks are private institutions. They are not public institutions. They have corporate interests. They have investors and shareholders that they are accountable to. And they are accountable also to the American government for certain aspects of transaction mattering monitoring. Specifically, with respect to anti money laundering laws, that has to do with the Bank Secrecy Act and there are some complications there. We have gotten some very good guidance from financial crimes enforcement at the federal level. They're called Vinson. They are the ones who really are monitoring for money laundering and trying to make sure that basically corporate crime is not happening without banking. You do not have that corporate crime surveillance. You don't.

[00:06:40] It just pushes it all underground. So you just have no data rather than at least, you know, some data on what's going on in these businesses.

[00:06:47] Exactly. But that also makes them higher risk for the banks to take them on if they are going to take a A. If they want to take on that sort of engagement with the industry. Now, cannabis is not alone in being an under banked industry in some other areas. Yes. So money services, businesses like, for example, your Western unions, your check cashing places, those tend to be under banked. You see online gaming, of course, this is heavily under banked, except that now they're able to go for international banking. So it's really not that much of a problem for them anymore. Got it. Or it doesn't have to be. Put it that way. Mick, still, they have an option now. Yeah. Alcohol industry actually still has issues with respect to that. I mean, there's there's quite a few high quote, high risk industries that get labeled that way by banking institutions. Some of them have more access. Some of them have less. It depends really on what your dollar value is from a customer point of view.

[00:07:44] If you if you're a profitable customer, you you can show yourself to be a profitable customer. OK, thanks. We'll take you on.

[00:07:49] Yes, that's true. But with respect to the cannabis industry, there's a there's an additional problem here. They have legacy cash look like floating around the system. And legacy cash is a huge problem. If you take a look at the banks and credit unions that are willing to work with this industry, they are almost all state chartered banks and credit unions. They are not your your Wells Fargo's. They are not you are Chase, not your Bank of America. Those larger federally chartered institutions are staying away from this industry. And that has a couple of implications. So the smaller institutions, in order to pass stress testing management, which is that is a regulatory rule with respect to their capital management, to make sure that they don't end up going under as a result of shocks to specific industries. They cannot handle more than about 10 percent in their assets being delegated toward a specific sector.

[00:08:47] So interesting. So with this is this is from a charter point of view, the requirements around their charter are that they can have an interest or investment in in any industry for up to 10 percent or more than 10 percent.

[00:08:58] It actually is not about their charter. This actually is about the fact that these are smaller institutions because they're not federally chartered. They're not these big behemoths that have lots and lots of assets. So that limits the amount of accounts that they can actually work with.

[00:09:12] So if you think about it, it's just their own internal strategy, self self management that they say these are federally mandated standards. OK. So these are federally mandated standards, OK?

[00:09:23] They're federally mandated standards. Now, the government has not specifically said it has to be 10 percent. Right. OK. But the this for it to be able to pass stress testing. And this actually gets back to why fourth corner credit mean was unsuccessful in getting Federal Reserve access for a master account back in I guess it was last year. And they had had, you know, lawsuits going back and forth with the Kansas branch of the Federal Reserve over whether they could have a master account or not. Interesting. Yes. It's it gets to be very complicated and very weird. So basic for stress testing purposes in order to make sure that your capital management of your financial institution is not over allocated towards a specific sector or specific industry. These are terms that people have heard before, but they don't know what that actually means. They limit it to about 10 percent of their assets. So if you have a credit union that has about 300 million dollars in assets, they can only take on about 30 million dollars worth of accounts with respect to cannabis and with some of the larger operators that basically you don't want to go. You get one account you get. One business that they work with and so they have a capacity problem there. And so that's that has to do with them not being, you know, these big banks. Now, the second bit to this that is challenging for them is that their compliance teams are much smaller than the larger institutions. So when they're allocating resources towards this, they're having to allocate basically an entire entire specialists towards this industry when they may have a compliance team of like three people.

[00:10:56] So now how does this work? Because I think the way I understood it, part of the federal challenge was if you're dealing with a cannabis business, you have to report it because it's now essentially you're dealing with a business that's conducting illegal activity or federally illegal activity. So you have to report on the on the activities.

[00:11:10] That same that same thing happens at the state level. If you're if you're a state chartered bank.

[00:11:14] Yes. These are things you have to comply with. Benson regulations, whether federally chartered or whether your state chartered.

[00:11:20] This is just law is just law of banking. All right.

[00:11:23] Yeah. This is getting into just law banking. This is getting into good business practices with respect to banking and financial institutions. I mean, you have to understand it from their perspective. This is a high risk industry that has had very much a black box with respect to information coming out about the operations of these institutions. So sorry, of these of these cannabis companies. And they're having to learn about the industry, learn what the risks are, and educate themselves in order to to work with the industry. They're having to be very careful about how many assets they can allocate towards it. And then on top of that, they have the compliance burdens, the additional compliance burdens. And most of the state financial compliance burdens haven't even been worked out. Really. And, you know, of course, it's because everybody is way when you start talking about regulation, it's underfunded. It's worked. And that's on both the private side and the public side. So your compliance professionals are doing a ton of work. It's very labor intensive for them. Some of that, frankly, is solvable with fintech. And that's one of the things that we're pushing towards are action rails actually on the back end handle this suspicious activity reports that are required for fencing and also where necessary, handle these things called a cash transmission reports which are required when you start dealing in movement of cash like physical cash. Yeah, well, these are two reports that are required reporting to fence then.

[00:12:45] And then on top of that, you also have to do the state reporting again is a little bit. They do a really good job. The regulators do of monitoring these financial institutions. And they also have a lack of understanding of the operations of these things and are kind of having to learn on the fly about how to bank these guys in an appropriate fashion. And, you know, unfortunately, and a lot of the places where cannabis has gotten a lot of uptake, there is far less access to the kinds of this is really maybe across the industry rather than location based. There is a lack of understanding and access to good information regarding financial services, good practices for this industry. And there are a couple of fantastic firms out there. There are. But, you know, the the expertise that can actually be given on an individual basis to the cannabis corporations on how to access banking, how to access payments is pretty thin. Yeah, it's thin. And that was another was another thing that I just couldn't stand idly by and do was just sort of watch these guys potentially get themselves into the only level of federal scrutiny that is actually applicable to them, which is money laundering and financial fraud. And that's not something that is ever going to be ignored. It's just not going to happen. We're talking about national security level issues.

[00:14:10] So and corporate crime, like we want to keep criminal organizations from being able to infiltrate, infiltrate this industry as illicit activity or we want to kind of push them out of this industry. Let's be fair. Get them. Get them another one. Yes.

[00:14:26] So what is the status right now? So if I'm if I'm a business cannabis business that touches the plant and I'm trying to find banking services, my options.

[00:14:34] It sounds like my best options are going more or less to state chartered banks, credit unions. And hopefully I'm not so big that I'm going to blow their blow their allocation limits. And hopefully they don't charge me too much for all the reporting that they're going to have to do on me.

[00:14:48] I mean, it's just, you know, you're hitting on another big issue with respect to business banking for cannabis accounts. They are expensive. They are very expensive. You're seeing things in the range of 5000 plus per month. And that's not really including any sort of actual business services that they offer to warehouse your assets. And, you know, frankly, if the institutions are being really careful, they're probably not lending those assets. And that's another reason why that's that's very likely.

[00:15:17] Wait. So there actually is another fun. Yeah. And so they're not actually they're taking in the money. But what's a why are they lending it out? I mean, this is a protection.

[00:15:26] It's a good protection, frankly. So there are a couple of reasons. You could be disinterested in lending this money out. And for that reason, charging more on the accounts, I'm I'm sure that you're familiar with the idea that most banks just keep a reserve amount. Yeah, banks and credit unions keep a reserve amount of cash and the majority of the rest of it, they lend out in order to make money off of the assets that are actually sitting in their institutions. So with cannabis it being federally illegal, it's a little bit tricky for them to be able to get FDIC insurance on those assets probably and probably count towards their reserve and probably can't lend it if they're being really careful. I mean, really, really careful with is, you know.

[00:16:10] So basically we take take the money, put it in a separate part of the vault. Hold it there. Yeah. And so the only way they're going to make money is if they're charging if they're ever on account fees for they're charging you 5000 dollars a month, then it makes financial sense for them to offer the service even if they can't lend it out, even if they've got to do all the reporting, they can still make money.

[00:16:27] You can make some money off of that. And then there is the additional cost of the reporting. So there is some justification to the business accounts being as expensive as they are. But in a lot of ways, that's still not tenable for a small business. It can be it can be very tricky. And the the groups that generally have access to the business banking are more on the. The dispensary side. You see very few farms being able to get banking. They're considered to be a Tier 3 money laundering risk.

[00:16:57] Well, yes, because it's so easy from our operations point of view. It's so easy to cut in cash, illegal cash into the business. Yes.

[00:17:04] Yes. And illegal crops, actually. Yeah. This is it's funny because I'm getting into some of the things that you we are aware that is going on in the industry. And of course, I cannot I cannot say who specifically is doing. I have stories from stories. So this is third hand.

[00:17:24] No, but I get it. I see what you know from a industry point of view why this gets complicated for the banks, because, you know, there's there's all sorts of ways this this can gonna blow up on them in terms of running amok and federal law itself.

[00:17:35] Exactly. And they are held responsible at the executive level for any screw ups. So they can go to prison. They can federal prison if they screw up at all. Yes. All of these liabilities, they trickle down to the companies also if they end up engaging in these kinds of behaviors. That's if they get caught. Right. They're much more likely to catch them if they're banks.

[00:17:58] Yeah. Reverse incentives on a lot of this stuff.

[00:18:00] Exactly. I'm not sure that that's something that they care about as much. I think a lot of these guys are really trying to do the right thing and really move into the into the legal market. I think that there are some some financial barriers that are making it more difficult for them. But even for the ones who are legitimate farms that you can go through and you can access all of their records and they have kept really good receipts, records and all of the money is accounted for. You have to go through and basically audit everything from their cash records to be able to put that cash into the bank and make sure that it's not coming from any sort of an illegal source. That is hugely labor intensive, labor intensive. And the banks don't want to do it for them because why should they be having to go through an audit? Right. What needs to happen within the industry is a standard for independent auditing needs to come in for the cash records. And so we we do a little bit of that when we're doing the digitization of the assets. If we're going to convert the cash over to a digital asset, then we have to know where it comes from. Because for the same reasons that we know with our partner institutions, we are providing both the know your customer, the anti money laundering, the transaction rail. All of this is built into one system. But on the on the forefront and on the intake end, we still have to have the contracts and the receipts and the proof that all of this did not fall off trucks.

[00:19:16] Got it. OK. Let us back up just a second and frame for us.

[00:19:21] Auto repair in terms of what part of that sort of business transaction process, banking process, operational processes are you trying to solve or you're trying to work with in terms of providing a financial solution to kind of US space companies?

[00:19:35] Right. So what I have identified as probably the main problem that financial institutions have with trying to work with this industry is again, the lack of good information, the lack of transparency. And it's not necessarily that any of the cannabis companies would not provide the transparency. It's that there is a general understanding of this industry is really remaining in the shadows. We know that that's not really true anymore. There's been a lot coming into light. There's a lot of reason, frankly, to be trying to encourage everybody to get on the same page with respect to with respect to working together. The financial institutions that are most interested in working with the industry, of course, are at a state and regional level, have a lot of incentives to get involved with this, because it is a good mechanism for them to increase their deposits and increase the available funds for them to lend into into the general communities that they work with.

[00:20:28] So it gives them the. Also to work with minority groups and do some really good work on on community development, community building. And that's very valuable to some of these more community oriented institutions. And we're finding that a lot of them are very excited to try to work with this industry. But again, are running into some capacity issues and running into some information blocks. So what we've built is a transaction rail. It is on block chain. It is using smart contracts that are not exchange traded. It is a closed system, which basically means that there is no fluctuation in the price of the contracts. A dollars, a dollars, a dollar factor.

[00:21:10] You're not you're not a cryptocurrency or whatever. And every time people mention block chain, people think crypto. So you're using the underlying technology that powers crypto currency, but are using it for transaction transaction safeguarding. Correct.

[00:21:22] And what's very attractive about it and actually the reason why we're using the public block chain rather than a private block chain is that there's great transparency on it. You cannot mess with the records that come out a block chain. I mean, I'm sure that at some point there will be somebody that, you know, has always an arms race. Yeah, it's always it's always fun. But they're protective measures that you can take against that. Since we're not exchange traded, there's no fluctuation because this is not this is not a treated asset. It basically is. It's kind of an earmark. And we use smart contracts. Smart contracts are pegged to the US dollar. They represent the underlying dollars that are, in fact, held with our partner institutions to be that whether they are credit unions, be that if they are banks, be that if they are in California, distributors, distributors owe a lot of them are actually providing vaulting services in the California area. And a lot of them are bank grade security. I mean, it is they have built some really fantastic things. It's a lot of former military in the distribution space. And they're the ones who in California are license to move cash and our license to move cannabis products for this industry.

[00:22:33] And interesting. We are also working with those institutions on digitizing those assets and basically getting them onto a transaction record that is not changeable. It's unalterable. So you can't manipulate it and has a public record on a theory and block chain where you can actually go back and reconcile the records to what we have internally. And so there's an extra layer of protection for regulatory agencies that are coming in to try to work out financial audits on our institution as well as the partner institutions that we work with. And of course, on top of that, because, you know, it's just so much fun to add in extra features. We also handle financial reporting on our end. We are a financial institution. We are not trying to duck the laws on that. And you, unfortunately, have seen a lot of folks that have been thinking that they can just sort of handle cash management for people or provide payment services through payment processing, credit processing, and not actually thinking about the fact that that's financial fraud, money laundering. I mean, it's just don't have the background to know what they're getting into. So it's a it's a bit of a big deal.

[00:23:40] Whoops. I don't know what happens, what happens with those companies. At some point, the federal government says, you know, they get shut down. They get shut down. Primarily, they actually get shut down by their financial partners because they are not honest about what they were doing. And so they lose their access. They lose their access to those. Yeah, exactly. Sometimes they also get shut down both by the regulatory bodies.

[00:24:02] That typically happens at the state level because that is the better funded of the regulatory financial agencies. It's a it's much harder for a fence and to be seeing these things, especially when, you know, they're misquoting transactions. Therefore, the suspicious activity reports are not actually getting filed in and all of these types of things. So, yes, these guys get busted. They can be prosecuted for financial fraud at both the local and federal level, at the federal level.

[00:24:30] They also can end up with civil penalties.

[00:24:34] I was just going to say, Angela, for violating their contracts with them. Now, we haven't seen that yet, but it's probably coming up in just a minute, especially the fines that can be assessed by the by this.

[00:24:46] The financial partners can be two hundred fifty thousand dollars a pop. So each time somebody does a transaction that they're not supposed to do, like say say I buy a I buy a cartridge for 60 bucks at a dispensary and they're doing credit card processing. They've got somebody who very typically they've been advised by somebody who didn't realize that they were advising them to do something very legal that they can personally be held liable for. And everybody in this cycle is responsible for financial fraud from a criminal perspective and money laundering from a federal criminality perspective.

[00:25:25] And is just bad news bears for everybody. So what if. Happening with these processors that have done things like that is they end up losing their access, their customers end up on the terminated merchant files, which is an internal document that almost all financial institutions have access to within the U.S. system because there are information sharing laws that are supposed to allow banks basically to cash money launderers. So that or that information with one another. And all of the sudden you go from being just in a high risk industry to being a high risk business that had your access to all of these things, whether it's banking, whether it's payment services, having that shut down on you. And you basically are going to have almost all of your accounts at any financial institution shut down, including the state institutions.

[00:26:10] Well, I was like, did you put on the no fly list? I mean, that's basically exactly right.

[00:26:15] And it's sad because they've been mis advised by some folks who have taken very risky stances on financial products and who, frankly, don't have the background to be giving that proper advice. Yeah, just don't. And it's a and it's unfortunate because who ends up suffering are a lot of the cannabis companies who who are trying to do the right thing and frankly, just didn't know that that could even happen.

[00:26:44] Well, well intentioned, misinformed and often kind of caught, caught and sometimes a bit of a scam. Yes.

[00:26:50] And it's I don't want to call it a scam. These things could be made into legitimate processing. But the fact is, the way that they've got these run, they're not. And they're not even trying. They're not even trying. I mean, gift cards is another one of those funny ones. There's the gift card companies that are only working with cannabis. I've talked with a couple of them and been straight up. I'm like, hey, I don't want to see you guys shut down. I want this is not good for anybody. This has the potential to end up postponing legalization for the entire industry. Stop behaviors. Here's how you can fix it. Hey. Financial institutions lawyer. I'm trying to help and they're just not going to do it. The focus isn't there.

[00:27:31] Well, it sounds like it's the kind of froth the froth of this industry is creating a lot of these situations where people are in situations to make decisions that may not be completely well informed, but they feel competitive. I mean, there's a lot of competitive pressure out there. And I think there's a timing issue.

[00:27:47] There's a lot of short sightedness. And it's not anybody's fault. Everybody starts looking at the green and thinking that's the only goal and it's OK. How do we get there? And not really actually thinking through that process and what's going to be the best practices to make sure that you're your institute. Your corporation is sustainable. Yeah. So sustainability issues and people don't realize it.

[00:28:10] So walk us through kind of the quote unquote, right way of doing it or how how you help companies do it and how your technology kind of supports that. Give us the kind of play by play from a business owner perspective.

[00:28:20] Absolutely. So there are definitely still the banking problems. It's going to continue to be a problem because like I said, there's capacity issues. The payments problem is pretty easily solved, actually using block chain. I mean, our wallet, it is an electronic wallet. It is a very smooth ride. It's basically the same sort of functionality as PayPal or Venmo, except being used for both peer to peer type actions. So on business to business, business to business. And then you also have customer to business and we can do both. You have to report on all of those transactions. Yes. You have to report basically within 30 days of the transactions. And it's very simple. People can. It's prefunding of the wallet.

[00:29:02] Ok. So this is so if I'm a dispensary, I've set up a dispensary. I engage. I engage you. I set up an account with your system. Then load it up with what cash that I have or assets that I have. I can then use that money to conduct transactions with processors to buy product and buy anything I need.

[00:29:23] Yes, sir. Are there things that I would not use if I like if I need to buy office paper?

[00:29:27] I would. Would I only use it for things that are kind of in this kind of questionable or plant related stuff? Or do I use it for everything?

[00:29:35] You can't use it for everything. Like, frankly. I don't really want to plug it this way, but it can be a full alternative to credit card. It can be a full alternative debit. It can be a full alternative to HGH. It just depends on the level of the play.

[00:29:48] My employees or I could play my I could pay my suppliers, I could pay my consultants, I could pay my employees. I could do it for anything that I'm trying to pay.

[00:29:57] And the cash assets actually physically are there. Like we hold our capital. Any cash that comes into the system is actually banked. It is actually banked with financial institutions who know what we're doing. Got it. Who have agreed to work with us.

[00:30:12] And they have agreed to work with us again because we have we have all of the compliance bells and whistles on the back end that ends up making it much easier for them to add capacity for this. The other thing is there's no underwriting required because the transaction on blocking occurs with. Any sort of any sort of credit to it? It's an immediate transfer.

[00:30:34] There's no there's no clearing. There's no. Three days later, you know, it it gets cleared about the clearing house and from a customer point of view. So if I'm a dispensary and I've got a customer walks in the door, they would they would set up their account, they would fund their account, and they would use that credit in the system to then pay for goods and services at the dispensary.

[00:30:53] That's exactly right. And it's a smart contract. That's for a specified amount and a specified amount. They will have AC HD into the. For the benefit of account. We are not touching any of that. There's no float on this. Hey, pal, when they first started, we're actually sort of doing more of a banking reserve. Kind of.

[00:31:11] Yeah. They would take all those funds and they would take some 80 percent of them or something and use it for other purposes.

[00:31:16] Exactly. And really for investment purposes, we're not doing that. We have fees. We have transaction fees depending on what you're setting up. It's no cost at all to the to the end customer, but it's a cost, of course, to the businesses that are using the system. Yeah.

[00:31:31] Yeah. So you're taking a. And then that basically your business model is basically through the fees and services that you're providing, you're getting direct payment for.

[00:31:38] That's exactly right. And basically, it's an AC age system into into our accounts from their customers. And for them on the legacy cash, we are here basically going through their records and what they have records for now, not banking, but digitizing those assets. So they have access to it to move it around. Got it. With having to engage, you know, armored cars and and military level.

[00:32:03] Yeah. And it is I've heard I've heard these crazy stories. Oh, yeah.

[00:32:07] Oh, yeah. It's scary. It's scary. I've actually heard some stories about people, you know, sending their intern with sixty thousand dollars in a previous leg over to the bank. And they're being followed by cartel members. They know exactly when you leave. They know which cars to follow. It's asking for trouble. And it's something that we want to solve. It's just a safety problem for everybody.

[00:32:27] Yeah, I get it. So. And what are the guys? Where are you at the business now? What have been your challenges? I mean, where are you in terms of your business and the development of the business?

[00:32:37] Sure. So actually, the product is ready. We are working on developing additional partnerships with more distributors, more financial institutions. We've gotten we've been getting some great traction from from from institutions with good footprints for this industry. You know, this is something that can be used for any industry, but it's really designed it around these higher risk industries to try to help with tracking their transactions to get them into a more bankable state. And so by using this, they're going to have transaction records, transaction records that are being held by a third party that are confirmed by another external source like this is going to give them records upon records, which is what you really need in order to be able to get banked. I mean, it's something that everybody asks for is, you know, several years worth of financial statements on the corporation. And frankly, when you're talking about these types of corporations, when you're talking about cannabis, it would be a good idea. It would be a good idea to actually have records from inception. But you definitely have to have records on the amount of cash that they're trying to put into actually put into the system. And our plan right now.

[00:33:42] This is the one thing that we don't have going for us at the moment. But we are in the process of applying for we are applying for a money transmitter license. Now, that that's very important with respect to, again, getting us that financial institution, it ends up putting us into a bucket that makes it harder also for us to bank privately, because that puts us into the money services businesses category, which is another one that I mentioned earlier. And then when you start being really open and honest with folks and telling them that there's a crossover with cannabis, it ends up double, double of nobody here. This is and who banks money services do not bank office. So really having to be careful about who our partners are with that takes longer. It means that it can take us some time to scale out, but we're going to do things the right way because this is a financial institution. There is no room for error. I've described the fact that like you're talking about triple levels of liability in terms of both criminal prosecution and in terms of civil liability to the institutions that you work with. I am not going to prison.

[00:34:44] Yeah. Let's not do the follow up episode from your cell.

[00:34:47] Yeah. Yeah. Coming to you like that.

[00:34:53] But that's the thing. We want to do things right. We want to get stakeholder input. You have been trying to work with some of the local governments as well. But yes, this is it's very important for us to basically what we're waiting on the money transmitter licenses that we have to have a certain level of capitalization.

[00:35:11] Have customers. But like I said, we're not touching their money. So we do not have that high level of capitalization on our books yet in order to support the money transmitter license. And that comes from a legitimate place. They want to make sure that there's enough money to. Underwrite the transactions that we're doing in order to make sure that we don't disappear with people's money.

[00:35:32] You're not gonna default on something. Exactly. Columbia.

[00:35:36] Yeah, there. Yeah, I get it. Yeah.

[00:35:42] No. This is fascinating. I said this. This banking side is hated. It's complicated. I think it's it's funny. I think it encapsulates encapsulates so many kind of historical aspects of cannabis and the political aspects. And and yet it's also kind of the crux, I think, to real kind of industry growth.

[00:36:01] We don't figure these things out. It's going to really stymie the growth and expansion of this industry and it's just gonna make it more difficult. So kudos, kudos to digging into this and entering the danger. Like getting into the hard stuff. I love solving problems. Yeah. Now. I love it. I would. We could probably spend a couple hours getting into the intricacies of this stuff.

[00:36:23] If people want to find out more about you, about our payments, about the work that you're doing. What's the best place to get that information?

[00:36:29] Ok, so we have a little landing page of a Web site that of course, I did on Go Daddy. I wasn't planning on paying for web development at this time because the product is more important and we're a B2B great primarily to be our customers, our businesses.

[00:36:44] So you can find information on how to contact us at W W W dot artery pay dot com. It gives a little bit of information. It tells you a little bit about the team. And you can also contact me at Ashley at artery pay dot com. If you'd like more information, we have brochures on pricing. We also have discussions of of the product a little bit more. And, you know, we are. We are also, you know, so much of cannabis at this point is referral based. So we will know if there are other financial aspects that you were looking for, other advisors that you were looking for.

[00:37:19] We may be able to help you navigate some of those as well or not 100 percent. Of course, I'm not I'm not going to give a full shout out to certain advisors, but there are advisors in the industry that can be helpful as well. So, you know, you use your advisors to find more services you think credible.

[00:37:38] So, yeah, if you're looking for us again, it's

[00:37:44] Great. I'll make sure that those are in the show notes so people can click through and get a hold of you. Actually, this has been a pleasure. I've learned a lot. I think our guests have. I really appreciate the time.

[00:37:54] Thank you so much, Bruce. I really appreciate it.

[00:37:57] You've been listening to Thinking Outside the Bud with Business Coach Bruce Eckfeldt to find a full list of podcast episodes. Download the tools and worksheets and access other great content. Visit the Web site at And don't forget to sign up for the free newsletter at