Archives for April 2020

US Spot Index Higher than a Year Ago

One of the markers of success in the cannabis industry is the wholesale price per pound. According to the U.S. Spot Index from Cannabis Benchmarks, prices peaked in mid-February. Since then, the volume-weighted average price has fluctuated within a seven-percentage-point range – or more than $100 per pound.

US cannabis market holding steady in the era of coronavirus

While the trend may be downward prices are at least higher than a year ago in 2019 when the market was recovering from a difficult 2018.

It would be logical to assume the downward trend is directly related to the COVID-19 pandemic. A few states like Massachusetts ordered the industry to shutter, considering it a non-essential business. And the Nevada average price is down which may be related directly to tourism in Las Vegas coming to a full stop in the pandemic.

But overall this industry marker is holding indicating that activities like consolidation in markets, better supply chain management, and increased number of markets coming online in the last 12 months have left the industry in good stead.

Avoid Scammers During the Era of Coronavirus

The FTC is always on the look out for scammers latest and greatest ideas on how to take your money, your information, your time, and cause you headaches.

Be aware of the current coronavirus related scams

In this era of coronavirus things are no different. Things to look out for:

If you get unsolicited emails, phone calls, text messages offering help either finding out about your stimulus payment or applying for it or getting it early do not reply. They are looking to get your information like date of birth, social security number. We may be wise to the phone calls and email but here is what to do if you get unsolicited text messages – scammers new way of reaching out to you:

Do not click on any links.Clicking could expose you to scams, download malware, or get your phone number added to lists that are then sold to other bad actors.
Delete those text messages immediately.
If you have questions about the federal government’s economic impact payment, go to irs.gov/coronavirus.

Avoid scams trying to get your stimulus money after you have received it. Messages to “get rich quick” by investing your stimulus money are too good to be true. The FTC Consumer protection arm has identified several multi-level marketing companies currently soliciting with these messages:

“Need to make extra money? Find it difficult to pay your bills? Were you laid off/ #fired? Be your own Boss w/doTERRA essential oils. Msg me to achieve financial independence #laidoff #unemployed #cantpaymybills #cantpaymyrent #student #sales #sidehustle #makemoney #stayathomemom.”
“…Living in quarantine and where 14 million people applied for unemployment just last week … I’ll stick with the opportunity to change people’s lives … turn a small investment into six figures …. #arbonne … #quarantine #2020”
“[E]veryone’s getting stimulus checks right now… There is no better investment you could do… Take that money that you’re about to get back… figure out a way to make this happen tonight.”

And if you own a small business and are applying for the Paycheck Protection Program or Disaster Relief Loan watch out for companies offering “help”:

Don’t pay in advance for information. All the information from the SBA is free at sba.gov/coronavirus.
Don’t pay in advance for a government loan. You don’t have to pay up front to get an SBA loan.
Don’t give your information to someone who calls, emails, or texts you out of the blue. The SBA won’t call unsolicited to find out information about you or your business, or to ask you to apply for a loan. The SBA is not going to send you emails or text messages asking for sensitive information. If you get an email or text like this, delete it. It’s a scam.
Don’t apply for a loan without verifying the lender. Only SBA-authorized lenders can provide PPP loans, and other loans may be available through SBA directly. To find an SBA-authorized lender in your area, use this SBA tool.
Don’t click on links or reply to emails or text messages from someone you don’t know. If you click on the links, you could download malware to your computer or device or be connected to a scammer or hacker.

Gas Prices Low, Oil Below Zero?

It may seem as if the oil industry is bullet proof. They’re loaded right? It may seem that way, but like any commodity, it is subject to its history and the current market.

So, why are prices at the pump so low, dipping below $2 in some places? And how does a commodity sell for less than zero?

The part of history that led us to this point happens in the 1970’s. The Arab Israeli war put the US square in the middle with Arab countries nearly over running Israel – who is our ally. The US sends Israel a large amount of weapons, allowing them to defend themselves but making the Arab countries mad. They couldn’t very well invade us so they used the one advantage they had over us – oil. Many of us “of a certain age” can remember the oil embargo and the long lines, shortages at the gas station, rationing (you had to go to the gas station on a certain day depending on the last digit on your license plate). It went on for many months and made voters very mad.

At that moment, the US decided we needed to secure our own oil and energy supply. How did we do that? In a couple of ways over the next few decades. First, we made up and made friends with Saudi Arabia – one of the largest oil producers in the world. We also ramped up American production of oil, and we built oil storage.

Now we are fine, right? Sure, until China and India begin using more oil in the early 2000s. And of course more demand means producers can charge more. Crude skyrockets and gas prices overtop $5 a gallon. Now, the US is annoyed again and sometimes when things are bad innovation happens.

The US has always produced oil. California and Texas have been oil producing states for decades. There has been oil in places like Wyoming and Utah but in a form we couldn’t get to – shale oil. The innovation was a kind of fracking or mining of this type of oil where we could collect it and refine it. Over the next several years the US becomes a large oil producer and even begins to export oil again.

Leap forward several years to this year. You may have heard of the Saudi-Russia oil price war. Oil prices had already started to decrease at the beginning of this year and in order to shore up the prices Saudi Arabia asked Russia to reduce its oil production, but in short, they said ‘nope’.

At the same time, as we know there was a pandemic, COVID-19, surging around the world. By the time the US-Saudi-Russia agreement comes about countries around the world are issuing stay at home orders to prevent the spread of the virus. We in the US are all shut up inside – not driving to work, driving less to other places like the store, not going on road trips on the weekend – and lowered demand means lower price.

While we are all social distancing, oil in tankers is on the ocean making their way to our refineries (tankers can’t make u-turns). Oil production has not significantly slowed (apparently very difficult and expensive to stop an oil pumping site) so while the regular amount of oil is being produced, oil use is being radically reduced. In the US we have alternatives to oil to heat our homes and for manufacturing, but our transportation is largely run on oil.

On top of all the mitigating events that have led us here commodities markets are now bidding on “summer” oil – the slightly different gas that is produced for hot summer months. But as oil has been produced and shipped it has gone into available storage – and that storage is running out. But the oil keeps coming – and so here we are at the moment when an oil producer is so desperate to offload their product that they would pay someone to take it off their hands – thus paying to give it away. That, in a few nutshells, is how oil got below zero.

Paycheck Protection Program reopens

Starting April 27, 2020 the SBA’s Paycheck Protection Program will reopen. After the program quickly went through the initial $349 billion in a short few weeks Congress approved an additional $310 billion for the program.

The program intended for small businesses ended up granting funds to larger businesses like Shake Shack and Ruths Chris Steakhouse – both of whom after criticism vowed to return the funds. This time around Congress has asked banks to verify the need of the business – checking to make sure each company, though technically a small business by the program’s definition, does not have funding opportunities elsewhere like the larger and publicly traded companies did. And to encourage this Congress has allotted 20% of the fund be run through small banks.

But no matter the changes the funds will run out quickly.

Out of Ideas?

By this time, like many of us, the novelty of “stay at home” has worn off. You now abhor Netflix, and can’t possibly binge watch one more show, or make one more attempt at delicious homemade bread…

So, what now?

If you are in the “let’s get this place organized” mode there is one important task you can do that will have a long term payoff.

Organize your personal documents.

While this may not be as much fun as learning French or finishing that knitting project, you will be glad you did it for years to come. Not all documents are equal and need to be saved the same amount of time. There are some documents you need to keep, basically forever, but many you can purge.

Keep forever – Tax filings, birth certificates, adoption records, death certificates, social security cards, passports, divorce or separation papers, business organization documents, property deeds, auto title documents, wills and trust documents.

Keep for seven years – Documents of loans that have been paid off.

Keep for three years – Bank statements, receipts for items you wrote off on your taxes kept with tax documents, home improvement records to be kept three years after property is sold or transferred (keep all home improvement records the entire time you own the property), mortgage annual statements as long as you own the property.

Keep one year – medical bills, paycheck stubs, utility bills, mortgage statements (or until you receive the annual statement), receipts, ATM statements (some experts say for receipts and ATM statements one month – so long as you don’t need them for tax purposes, in which case you would keep them with your tax documents three years)

Keep while active – contracts, insurance documents, stock certificates, pension and retirement plan records, warranty documents.

It can be a dusty and long job but you will feel so much better when you have gotten all your documents in order. Then you can break out that paint by numbers project!

Sales and Use Tax Relief

Last month Governor Newsom gave small businesses a small bit of relief from remitting quarter end Sales and Use tax normally due April 30.

Sales and Use tax deadline automatically extended – if you need it.

The order extended the due date to July 31, 2020. There is no need to request an extension, it is automatically extended to all businesses who regularly file in California with sales and use tax less that $1million.

However, the CDTFA is still accepting returns and payments. So, if your business is still in a position to file and remit please do. Counties still need to collect and distribute tax payments to local municipalities.

Dealing with Debt Collectors

Many Americans are facing a growing pile of bills they can’t pay right now due to the coronavirus pandemic and stay at home orders. But the Federal Trade Commission Consumer Information service reminds us we do have rights in dealing with debt collectors.

Debt collectors aren’t allowed to harass you.

First, you don’t have to talk to debt collectors. But consider talking with the collector at least once, even if you can’t pay right away or don’t think you owe the money. That way, you can confirm whether it’s really your debt. If it is, you may be able to work out a payment plan or settlement.

Collectors have to follow rules when they contact you. They can’t threaten you or use bad language. They can’t tell others about your debt, like threatening to tell your employer. They can’t have you arrested or deported. Bad debt collectors are trying to scare you and force you into agreeing to something you don’t want to. You have a right to set up a payment plan, the debt collector should work with you to negotiate a plan that works for both of you.

During the Coronavirus emergency, the federal government and many state and local governments also have put special programs in place that may help you manage your debt:

The Department of Education (ED) has temporarily stopped the collection of federally-owned student loans that are in default. In fact, whether or not you’re in default, if you have federal student loans, you don’t need to pay your monthly payments from March 13 through September 30, 2020, and interest also has been suspended. Visit ED’s website to learn more.
Some states are limiting what collectors can do during this emergency. For example, you’ve probably heard about the $1,200 economic stimulus payments that most people will get as a direct deposit to their bank account. If a debt collector or a creditor has sued you, they may have a garnishment order that would let them seize the payment when it reaches your account. Some states, however, are temporarily making debt collection seizures like this illegal. Check with your state attorney general to find out about any emergency limits on debt collection actions in your state. (A new IRS “Get My Payment” tool lets you track the payment to your account.)
Many state and local governments have temporarily halted actions like evictions, foreclosures, and water and utility shutoffs. Contact your state and local government to find out about emergency protections that may apply to you.

If the collection calls get to be too much, you can stop them. Just send the collector a letter telling them to stop contacting you. Keep a copy for your records. Stopping the calls won’t cancel the debt. You still might be sued or have debt reported to a credit bureau. But, stopping the calls may give you time to regroup, then start working your way toward financial recovery.

Avoid Stimulus Payment Scams

This is an anxiety inducing time and worry about money is no small thing right now. The Stimulus Payments that are now being distributed are one thing that may tamp down some of that anxiety. But don’t let anticipation make you fall for a scam.

4 tips for avoiding a Coronavirus stimulus payment scam

Only use irs.gov/coronavirus to submit information to the IRS – and never in response to a call, text, or email.
The IRS won’t contact you by phone, email, text message, or social media with information about your stimulus payment, or to ask you for your Social Security number, bank account, or government benefits debit card account number. Anyone who does is a scammer phishing for your information.
You don’t have to pay to get your stimulus money.
The IRS won’t tell you to deposit your stimulus check then send them money back because they paid you more than they owed you. That’s a fake check scam.

More Help on the Way

According to CNBC and other news reports Congress is close to a deal on infusing more funding into the Paycheck Protection Program (PPP) to help small businesses affected by the stay at home orders nationwide.

Congress is negotiating additional funding for the PPP

On Thursday, April 16th the U.S. Small Business Administration, who is charged with administering the PPP, announced that the initial funding amount of $349 billion had run out and applications were no longer being accepted.

But the additional funding looks to be an even larger amount. Various reports have put the negotiated amount at between $370 – $400 billion for the program. Although Congress and the President promise they are moving negotiations along quickly there is no timeline for a vote as of this writing.

Now What?

Most of us in the country have been ordered to “stay at home” to prevent the spread of COVID-19. And this has been difficult in myriad ways, no doubt sending the economy into recession for some time to come. But oo matter how long it lasts and no matter when we get back to “normal” we can move forward now – albeit a little at a time.

Life will get back to normal, someday. What now though?

What can we do now?

Apply. If you have lost your employment apply for all the help currently on offer. Many of us never imagined filing for unemployment but this is no usual circumstance. File as soon as you can for unemployment and even food assistance. This is what our tax dollars have been going towards – to take care of us when we need it.

Reach out. If your income has been affected by the pandemic reach out to your creditors. Many are offering a reprieve from payments and are willing to work with you if you’ve gotten behind. Not only landlords and mortgage companies, but credit card and other lenders are offering flexibility on payments right now. That is not to say any of your debt will be forgiven, but the requirement to make an immediate payment will be delayed.

Make a budget. Even if you never have before, now is the time. But this is not a ‘want’ budget, this is a ‘need’ budget. Include the absolute bare minimum of what you need to stay afloat, stay healthy, and get through this period in time. So, eating out, Starbucks, new clothes, new pillows to spruce up the living room, may all have to be left off this budget for now. Knowing exactly what you need to survive the era of coronavirus can give you some peace of mind and a target.

Where you can, shop local. Though the CARES Act has made funding available to small business, not all businesses will be able to avail themselves of the funds. Already banks are overwhelmed with applications and starting to halt acceptance of new applications. So, your dollars going to your local mom ‘n pop retailer or restaurant may make a difference in them being able to make it to the other side of this pandemic still in business.

Get online savvy. Being familiar with current tech has always been important to our work lives but never more than now. If you have never taken a class online maybe now is the time? Maybe there is some skill you can add to your work arsenal, or a hobby you have always been interested in knowing more about, or history. If you have never had a FaceTime chat with your kids, or gone to a Zoom meeting, learn now. Even calling your friends on the phone can be heartening and a welcome distraction to the grind of news and boredom.

Be flexible. If you are a business owner or an independent contractor now is the time to plan how you will get back to work in the era of coronavirus. Until we have treatment and a vaccine we will likely have to continue some level of social distancing. How will your business be able to adapt?

Rethink. Much that we can’t foresee will change during and after the pandemic. This may be the time to rethink priorities and what is important and mostly where we are spending our time.