Good morning, MBA readers,
For most companies dealing with marijuana, doing business with cash is the only viable option due to federal laws for financial services. And for firms in Missouri, this could spell trouble come tax day since state regulators are seeking to ban tax payments in cash. The same banking rules do not apply to marijuana-adjacent firms like Birkel Electric of St. Louis, however. The electric contractor is positioning itself to capitalize on the cannabis industry with a subsidiary that will offer equipment for marijuana cultivators. In other news, the latest episode of the Speaking Startup podcast is live. This week’s show features a conversation with entrepreneur Kelsey Ryan, who decided to start her own news organization after she was laid off as a newspaper reporter. Scroll down to read — and listen to — more about these and the day’s other top stories.
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Speaking Startup: A new name in local news
When Kelsey Ryan began digging into models for delivering in-depth local news, she noticed a trend she found troubling: People were more aware of stories playing out halfway across the world than they were of important events in their own backyard. Enter The Beacon, Ryan’s startup news organization aiming to address gaps in local news coverage in the Kansas City region. The publication is set to launch next year, and Ryan joined this week’s podcast to discuss starting a news organization.
Parson touts Missouri revenue boost
According to a monthly report released Wednesday, Missouri’s net general revenue collections through October increased 7.3% to $2.97 billion. Gov. Mike Parson, who is running for a full term in 2020, said the report reflects the state’s “strong fiscal health, growing economy and ability to live within our means.” (St. Louis Post-Dispatch)
Mallinckrodt subpoenaed over HHS lawsuit
The Securities and Exchange Commission requested documents from Mallinckrodt Pharmaceuticals, which has a principal office in St. Louis, related to the drugmaker’s lawsuit against federal health officials. The company sued the Department of Health and Human Services in May over new Medicaid rebate calculations that could result in a near 10% hit to the annual sale of its costly multiple sclerosis treatment. (Reuters)
Kansas City Council advances bill reducing USDA subsidy
The City Council’s Finance, Governance and Public Safety Committee has passed a reworked version of a deal with the U.S. Department of Agriculture that would have awarded the USDA about $6 million to relocate two research agencies to downtown Kansas City. The new ordinance, which would grant $1.6 million in incentives over 15 years, heads to a vote before the full City Council on Thursday. (Kansas City Business Journal)
St. Louis releases new list of 18 firms interested in leasing Lambert
The Airport Advisory Working Group on Wednesday released additional information about each of the 18 companies that are interested in bidding to lease St. Louis Lambert Airport. Notably missing from the new list is Ferrovial Airports, which had hired former St. Louis Mayor Francis Slay as a lobbyist. (St. Louis Public Radio)
Loop Trolley gets loan; Bi-State considering takeover
The St. Louis taxing district that constructed the trolley has voted to lend the Loop Trolley $90,000, which will prolong its operation through December. While the city and county of St. Louis declined to provide the $200,000 initially requested by the Loop Trolley, Bi-State Development is now considering whether and how it can help keep the trolley running, including taking over the operation. (St. Louis Business Journal)
Springfield voters renew sales taxes
An overwhelming 80% of Springfield voters renewed the city’s one-eighth-cent transportation sales tax, which has generated $102 million for the city since 1996. The approval comes with a 20-year sunset and is expected to generate about $22 million for Springfield over the next four years. (Springfield Business Journal)
Polsinelli adds 31 partners, including 5 in KC
The second-largest law firm in Kansas City has added 31 new equity partners, including five in the local headquarters. (Kansas City Business Journal)
Phelps County voters split on online sales tax
Phelps County voters rejected a sales tax on online purchases while its two biggest cities, Rolla and St. James, each approved 2.25% and 2% online sales taxes, respectively. Leaders in Rolla expect the new tax will generate between $400,000 and $600,000 in new revenue. (St. Louis Public Radio)
Say that again
“This is why I didn’t go ahead and apply for a license. I was afraid of how this is all going to play out.”
That’s Josh Loftis, owner of Springfield-based Home Grow Solutions Missouri, a company that teaches customers how to grow their own cannabis, the Springfield News-Leader reports. State officials this week proposed a rule that would bar licensed marijuana businesses from paying taxes in cash. This could spell trouble for Missouri’s cannabis entrepreneurs, most of whom will likely do business with cash since banks are federally prohibited from providing financial services to marijuana businesses. Loftis, on the other hand, doesn’t have to worry about the new rule since his company doesn’t work directly with cannabis.
That’s how much SoftBank lost in the fourth quarter, the company announced Wednesday. It’s the first time the Japanese conglomerate — which owns Overland Park, Kansas-based Sprint — has announced a quarterly loss in 14 years, Bloomberg reports. SoftBank’s venture capital Vision Fund, which has made big bets on startups like Uber and WeWork and invested $200 million in Kansas City financial technology startup C2FO, lost about $8.9 billion in the quarter. All of this comes after WeWork’s failed initial public offering, which led to SoftBank putting together a $9.5 billion rescue package and owning 80% of the coworking space operator.
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The Chesterfield-based electric contractor is positioning itself to cater to medical marijuana businesses, the St. Louis Business Journal reports. The company has formed a new subsidiary, Birkel Cultivation Solutions, which president and owner Mike Birkel said will offer equipment for marijuana cultivators. He projects the company will rake in some $7 million a year to begin. Because Birkel won’t be dealing with cannabis itself, the company won’t need a marijuana business license. The company plans to add some 40 new employees with its new venture.
It’s been a pleasure doing business with you this morning.