When KIND Financial began in 2014, it was supposed to be the Wells Fargo for weed growers and dispensaries.
“I was initially going to be KIND Banking," CEO David Dinenberg says. "I was going to be the marijuana bank.”
He says the idea struck when he was watching a 60 Minutes segment on marijuana businesses, which mentioned that the industry had no banking, credit cards or financial services. “If you had sneezed or coughed during the 15 seconds that this information was presented, you’d have missed it,” the impeccably dressed Dinenberg says, sitting in an airy conference room of his Hollywood office. Soon thereafter, he began learning about the cannabis industry. “The research evolved into a business plan,” he says. “I gravitate toward a problem and not the story.”
As the medical marijuana industry expanded, new businesses needed financial services to grow their companies. Dispensaries also had to operate on a strictly cash basis. While public attitudes toward marijuana businesses have changed recently, individual state legislatures continue to grapple with legal issues. Few financial institutions are willing to collaborate with growers and dispensaries, which often exist in a legal gray area. Cannabis currently is categorized by the federal government as a Schedule 1 substance — like heroin and LSD — and is as strictly regulated.
Today, KIND Financial has evolved. KIND provides financial technology to cannabis businesses so that they can operate safely, securely and in compliance with state marijuana laws. It also assists growers to understand the complex way in which the cannabis industry works within byzantine federal banking rules and marijuana policies.
Microsoft even announced recently that it would be working in tandem with KIND to market its software, in an unprecedented move by a tech giant to participate in the marijuana industry.
The backbone of KIND is Agrisoft, the company’s “seed-to-sale” software, which is geared toward growers, dispensaries and production facilities. The software also helps businesses report inventory and sales tax information to state and local regulatory agencies. Dealing only with licensed businesses and not “touching” the product itself, it gives cannabis businesses and governmental agencies the ability to track the product and stay compliant with government codes. “We literally track the plant from the day it’s planted to the moment it’s bought by a consumer in any number of forms,” Dinenberg explains. “If there’s a problem with the grow conditions, and the product needs to be recalled, we can do that.”
Agrisoft works in tandem with the KIND Kiosk, an ATM-like service for cash management, where marijuana businesses can have access to their money, since they can’t participate in traditional banking systems yet. Two of the machines are in use in both Oregon and Washington, and Dinenberg says 19 more have been ordered.
Before the 44-year-old Philadelphia transplant moved to Los Angeles three years ago with his wife and two young children, he knew little about the emergence of the medical marijuana industry. A successful real estate developer and chief operating officer of Grasso Holdings, his business and personal finances took a hit during the 2008 financial downturn. “I was committed to my company and stayed until the end, but my house was in foreclosure, and I basically had lost everything,” Dinenberg says. After that fateful encounter with 60 Minutes, he focused on becoming an entrepreneur.
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“This is my rebirth,” he says, “I’m not a cutting-edge guy, but this industry has no road map, and that’s exciting. It’s amazing to be a part of it, and I know it’s right.”
Dinenberg says he started reading everything he could find on cannabis — the history, politics and details of both medical and recreational marijuana. In January 2013, the family moved to Los Angeles and Dinenberg worked out of his home, seeking advice from lawyers and immersing himself fully in the industry. In January 2015, he moved KIND into offices in an historic building in the middle of Hollywood. From KIND’s beginnings, with a core of six people, all family and friends, the company has grown to employ 21 people in three offices in Los Angeles, Kansas City, Missouri, and Philadelphia.
Dinenberg now travels all over the country to let industry leaders know that there are safe ways to implement state marijuana programs through compliance.
While Dinenberg says he received initial advice from a core group of family and friends, it was his wife who gave him the strongest encouragement. “My true partner in life is my wife,” he says, “and when I’d lost everything, it was she who believed in me and who said, ‘Do it.’”