David Dinenberg, Founder and CEO of Kind Financial
David Dinenberg is the Founder and CEO of Kind Financial, a financial services platform catering to the cannabis industry. David, a problem solver at heart, first noticed the cannabis industry needed a reliable financial support system while watching television at home with his wife. The news agency was reporting on the green rush, then in its infant stage, and the lack of banking access and financial support. So, Dave started conducting research as to how he could fill that gap in the industry and Kind Financial was born. Kind Financial provides a Seed to Sale software package and they are in the midst of launching the first true and transparent legal payment system for the cannabis industry, called Kind Pay. In addition, Kind Financial has partnered with Link to Banking, which provides banking consulting and solution for banks to work with the legal cannabis industry.
What was the deciding factor for you to join the cannabis space or this particular industry?
About two and a half years ago my family was living in Philadelphia, Pennsylvania, where I had been in the real estate industry my entire life. After the 2008 real estate bubble, my wife and I were looking for a new venture to get involved with. We saw a television program in the fall of 2012 that talked about the emergence of the legal cannabis industry. During that broadcast, all they talked about was the politics and the landscape of the legal cannabis industry. At that point it was only legal in about sixteen states, worth roughly a billion dollars of revenue.
There was a small part of the program that caught my attention. I mean if you would have coughed or sneezed, you would’ve missed it. They said the industry had no financial services, no banking and no financial backbone. My wife and I just didn’t understand how an industry could emerge without that financial support. That is what peaked our interest in the cannabis industry.
The regulation and taxation of the industry is going to open the door across America, ushering in a whole new opportunity for prosperity.
Basically, Kind Financial started as a research project, as we worked to separate the truth from fiction as far as the banking industry went. That research evolved into our business plan. We closed our seed financing in June of 2013 and then moved to Los Angeles a month later. That’s when the company was born.
What were you doing prior to Kind Financial?
I was the Chief Operating Officer of one of the largest privately held real estate companies in Philadelphia. We were developers who built office buildings, shopping centers and multi buildings. We did a lot of urban development, basically covering the entire Northeast corridor from Washington, D.C. to New York.
When did you realize the coming of the green rush?
I realized that after I watched the program that I mentioned earlier and did the research. Then I figured out that this was going to be the next great industry in the United States, easily comparable to the repeal of alcohol prohibition. However, I’m 43 years old so I wasn’t around for prohibition. For me, the closest comparison is the .Com boom of the 90s.
The green rush is giving us a chance to come back to life, per se, after being wiped out in the last market crash. We saw this as a great opportunity, not only for us as entrepreneurs, but also for the country.
You have to be very resourceful, agile and thought provoking in this industry.
Right now, where are you guiding your passion and energy towards?
My passion is a couple of things. My passion is problem solving. My whole life I’ve never had an easy transaction, I’ve never had an easy deal. Most things that I’ve ever worked on in my lifetime have been very complicated. This is absolutely no different from that.
I’m very comfortable playing in water that is very choppy. You have to be very resourceful, agile and thought provoking in this industry. That being said, my passion really lies in two things. One is solving the banking problem in the cannabis industry. The other is as passion lies in helping to spearhead the charge towards legalization.
How are you working to side-step past issues relating to banking and the cannabis industry?
With our products at Kind Financial and partnership with Link to Banking, we have become an all inclusive, one stop shop. Meaning that, if you are a bank trying to do business in this industry, we provide you the tools so you can master the way of compliance.
When I refer to compliance, I’m talking about the eight points that were in the FinCEN memo, which came out back in February 2014, as well as the Cole Memo from the fall of ‘13. It more or less provides a blueprint as to how banks can work with the industry. We have taken that information and applied it so businesses and banks can operate compliant with regulations and laws.
I’m an honest guy. I only tell people I’m going to do something if I’m going to do it.
If you are a businessperson in the cannabis industry, we have several solutions that you can work with. If you’re a bank and you’re considering getting into the cannabis space, then our programs, infrastructure and technology set us apart from anything else offered in the industry. There are two main differences between what we offer and what the rest offer.
First, we have the ability for the bank to know their customer’s customer. In order to successfully and effectively comply with the rules and regulations currently in place, it is critical that banks know who everyone is throughout the process, including their affiliated businesses customers. I believe we’re the only company around that provides that service right now.
Secondly, we’re not agnostic. Our solution contains several different components and several different parts. One example comes from our software and hardware solutions, which we tie together because we control all the pieces in this puzzle. We can bring a very compliant program to a bank. In addition, not only is it about complying, but also becoming more time and cost conscious. We believe we can raise a bank’s efficiency level 40%-50% higher than others that are banking the industry today.
Describe your work ethic to me in one word.
I’m an honest guy. I only tell people I’m going to do something if I’m going to do it. That’s it. This industry has a lot of smoke and mirrors and I don’t want to be part of that. I only talk about things I’m going to deliver on.
Furthermore, I walk through walls. If you’re scared to hear the word no, then you shouldn’t be running a business and you probably shouldn’t be an entrepreneur.
Who is a person that you consider as a role model? Maybe someone who has been a mentor to you, why and how did this person change your life?
First and foremost my wife for her support, her belief and for allowing me to be the crazy nut that I am. Whether there is a woman behind a successful man or a man behind a successful woman, I’ve found that spousal support is a big factor behind success. Doesn’t matter what industry you are in. There’s always a partner involved in the process. My wife is my biggest cheerleader and my best advocate.
Professionally, my answer would be Lindy Snider.
She is one of my investors. She is one of my closest advisors. What I respect the most about Lindy is her professional history. She has started and grown numerous companies before. She knows how to make it happen and she asks the difficult questions of me. She makes me prove myself and my business model all the time. She challenges me and at the same time she is my biggest supporter and she shares my vision. She’s someone that I am very fortunate in my lifetime to know.
If you’re scared to hear the word no, then you shouldn’t be running a business and you probably shouldn’t be an entrepreneur.
What book have you read that you’ve been inspired by? Any particular read that we should put on our list for your readers to follow through?
Frankly, I’m not a big book reader. I like to read the news, or more topical information. I do love reading biographies and historical books, but for the most part my reading is dedicated to what is happening right now and how it might affect our ventures.
I just love the great stories of early entrepreneurs, the Wal-Marts and DuPonts of the world. People who were entrepreneurs a generation ago inspire me because there were no roadmaps for them. They had to draw their own treasure map.
Steve Jobs is a great example of never taking no for an answer and never giving up. Just because you make mistakes in the past doesn’t mean they’re shut out from the future. I truly believe that. I’ve learned much more on the way down than I ever learned on the way up.
Tell me about an esteemed achievement of yours that you are absolutely proud of.
Personally, one of the things I am most proud of was being recognized as President of the Jewish National Fund, when I was living in Philadelphia. That was important to me because it was a true reflection on my ability to help others.
Professionally, and this might sound a little self-indulgent, but I’m proud of the fact that I’ve been on CNBC about five times now. Just being able to be on national television, talking in a business setting about cannabis, something that has been illegal for a hundred years, is fascinating to me. I think any entrepreneur will always hope to be on a business television show talking about their business. For me, the opportunity to talk about cannabis and the future growth of the industry as a whole has just been very humbling.
People who were entrepreneurs a generation ago inspire me because there were no roadmaps for them.
What is the best advice you have ever gotten?
Listen more than you speak.
What is the most important thing for us to know now about the legal cannabis industry?
The cannabis industry is here and it’s not going away.
If we are sitting across from each other a year from now, how will our conversation about the green rush be going?
I think we’ll be dead in the middle of the 2016 Presidential election. I think we’re going to be talking about how amazing it is that we’re longer asking our candidates if they’ve tried marijuana, but rather their stance on legalization. Where do you stand on the legalization of marijuana? Do you want to create more jobs, more tax revenue? These are the new questions we are going to be asking.
As a presidential candidate, do you want to have a booming agriculture industry? Then legalize and regulate cannabis. Over half the country has medical marijuana on the books and it is likely that as many as ten states will have adult use recreational marijuana on the books. The regulation and taxation of the industry is going to open the door across America, ushering in a whole new opportunity for prosperity.
What do you think is the biggest barrier between the banking and cannabis industries? How do you think it will resolve itself? Join the conversation and comment below!