Located a few miles inland from the Pacific Ocean in a valley between the Purisima and Santa Rosa Hills mountain ranges in Santa Barbara County, California, alongside a riverbed at the center of some of the USA’s finest agricultural land, rests a certified organic farm. This farm grows heirloom tomatoes, onions, carrots, and squash, but that’s not all.
Because these ranges run east to west, a rare configuration allowing the ocean fog to roll in during the late afternoon and burn off by morning, this combination of warm days and cool nights makes it an ideal climate region for growing a much more valuable crop as well: cannabis. And for that reason, esteemed craft cannabis grower PRO Farms uses this land to produce some of California’s finest.
From THC-Dominant strains to CBD-rich alternatives, the folks at PRO Farms are renowned for producing high-quality, organic products since 2012. The company’s sprawling properties include 100 acres of canopy farm (320 farm acres overall). In addition to its nursery operation in Santa Barbara County, the family-owned cultivator has its newest cannabis cultivation location is in Lake County, California, located in the heart of Northern California, just two hours from the Golden Gate Bridge.
Using one solution provider, PRO Farms was able to address two business-critical challenges holding the company back from executing on a much more seamless operations and output basis.
The First Challenge – Banking
One of the biggest issues U.S. cannabis companies face is the overwhelming resistance of banks to take on industry clients, as the crop is still federally illegal. With less than 800 credit unions and banks serviced cannabis-related businesses, cannabis companies regularly operate on a cash basis and face being underbanked.
2018, PRO Farms was flourishing, yet its traditional bank held accounts would repeatedly get shut down. This, because trying to hide a cannabis business in a non-cannabis bank has its inherent risks. Ultimately, when the bank discovers the true nature of the business (enter accounts payable to hydroponics stores and massive electric bills) and abruptly shuts down the account, business is radically disrupted and banks will hold on to funds for weeks or months after closing the account.
For PRO Farms, it was a perpetual problem. “It was a nightmare,” said Tilman Brisendine, PRO Farm’s Vice President of Finance. “If an account lasted six months, we’d be lucky.”
Constantly re-opening accounts forced PRO Farms to largely function entirely in cash, absorbing all the risks (and costs) that come along with doing that. Counting, sorting, storing in vaults, frequent transport by armored cars. All these are added costs an all-cash business bares that a traditional banking business would not, to the same degree.
“Operating in cash was horrible. Not being able to have a bank account is a lot of work, a lot of insecurity, a lot of risk. We just wanted to operate like any other business. We wanted electronic banking,” said Brisendine.
The Dama Financial Banking Solution
Dama Financial provides a full suite of banking and merchant services, to credit and payroll products, to cash management, all in an integrated platform. The company has leveraged its experience in other unbanked categories to develop solutions, driven by its proprietary technology platform, capable of navigating a complex web of regulatory and compliance requirements.
“We provide our customers access to all the business tools they need to thrive,” said Anh Hatzopoulos, Co-founder and CEO of Dama Financial in an interview. “Whether it’s paying a vendor, checking an account balance or scheduling an armored car pick-up—via a single login, either on a computer or through our mobile app,”
For Brisendine, this is precisely what he needed. Vendors he’d tried in the past didn’t last long. “They were horrible. Very archaic set-up. We never had any consistency,” he said.
With Dama, not only was electronic cannabis banking a newfound reality for PRO Farms, but comprehensive business services became available to the company as well. Dama Payroll, for example, offers payroll; employee timekeeping, labor management and workload planning.
With Dama’s “Smart Safes,” employees are able to deposit stacks of cash without counting or sorting it, as the safe tallies the bills right at the place of business. Clients then have a credit line from that cash deposit. The novel solution saves labor hours spent counting cash and making bank deposits, eliminates human error, and curbs theft.
The Result
Since migrating to Dama Financial, PRO Farms went from 100% cash to 99% electronic banking, eventually opening eight bank accounts. “It’s great to have that platform and not worry about getting our accounts shut down all the time,” Brisendine remarked. “Being able to bank electronically is the most efficient—and secure—way to run a business.”
Using Dama Payroll, PRO Farms payroll labor costs have significantly lowered, and payments are delivered in the traditional form of checks and direct deposits. “Before it would take three people a full day and a half to prep and process payroll,” said Brisendine. “Now…it takes one person a couple hours to do everything.”
The Second Challenge – Compliance
In January of 2022, Dama Financial made a strategic move to acquire GrowFlow, a B2B SaaS platform providing compliance, inventory management, point of sale, analytics and sales tools for cannabis and hemp businesses at various points in the supply chain.
Combining Dama’s fintech and payment solutions and GrowFlow’s industry-leading software allowed the company to create a sophisticated, comprehensive solution one-stop-shop for cannabis companies, integrating product, operations, compliance, and financial data into a more usable and flexible solution than separate competing industry solutions.
The track-and-trace solution Metrc pioneered in Colorado in 2011 is now standard in the cannabis industry, and is contracted by state regulators and committed to a secure and credible regulatory environment. The system gives state regulators the means to see the entire cultivation and production history behind every single cannabis-based product sold in their jurisdiction.
California’s Metrc track-and-trace regulations were set to take effect in a matter of months at the time, which meant PRO Farms would soon need to report granular data to the state government, a cumbersome process that requires sophisticated technology to manage efficiently. This was important for PRO Farms, as strong adherence to industry compliance is foundational to the company’s way of doing business.
With the clock ticking and PRO Farms still using rudimentary Excel spreadsheets to track its inventory across all operations, the company recruited Angelo Bellah, then working in recreational cannabis in Washington, to lead the charge to compliance.
The Dama Compliance Solution
Washington had already implemented track-and-trace regulations, so Bellah was familiar with the software options on the market. He and PRO Farms considered a small handful of vendors, but Bellah was convinced GrowFlow would be the right solution for the company.
“Managing track-and-trace regulations is super complicated, and for many people it’s a struggle, but GrowFlow’s ease of use allows our regular employees to learn new skills without over-tasking them or setting them up for failure,” Bellah said, adding that bringing in more experienced labor can be hard to come by in agriculture and cultivation—and it increases costs.
The Result
Now vice president of operations, Bellah estimates that if PRO Farms had relied solely on Metrc for reporting, the company would have to use twice as many employees to stay compliant.
“We have more than 200 licenses, so that’s a lot of data. If we had to do that all directly in Metrc, we would require three or four full-time employees during peak activity time—where now we can do it with one.”
Bellah added that another thing he loves about GrowFlow compared to Metrc is that Metrc doesn’t prevent a user from breaking the regulations.
“If you enter in a number of seeds that is above the limit, GrowFlow will stop you and say ‘Hey, this is illegal.’ Those fail-safes will keep operators from making mistakes that could cost them compliance fines, etc.”