Imagine if Jeff Bezos had been forced to shove Amazon’s profits in shoeboxes or under his mattress. Think Amazon.com would be worth nearly $1,750 a share today? Of course not.
If that sounds ridiculous, it isn’t. Cannabis firms face this problem, even in states where weed is completely legal.
Yes, the cannabis business has a banking problem.
Thanks to its illegality at the federal level, most banks simply won’t deal with companies that “touch the plant”– even if marijuana is fully legal in their state.
But something truly extraordinary, even unprecedented, could be about to unfold in – you guessed it – California.
You see, if California Sen. Robert Hertzberg and the supporters of his 2018 bill get their way, the Golden State will create its own special banks to handle the business of cannabis firms.
This is a huge development, and if it passes, it could mean entirely new ways to invest in the high-profit weed sector.
Let me explain…
This Is Holding Back Cannabis’ Business Growth
Sure, business is booming in the 30 U.S. states – which make up 60% of the population – that have legalized marijuana in some form.
In 2017, legal marijuana sales in North America reached $9.2 billion. By 2021, the legal cannabis market is expected to soar to $24.5 billion, according to Arcview Market Research.
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But the industry still faces challenges that must be overcome before its true profit potential can be unleashed.
And one in particular strikes at the heart of any entrepreneur’s ability to succeed: banking your hard-earned profits.
Cannabis, of course, is still illegal at the federal level. And so many banks question whether they’ll face money-laundering charges by working with legitimate cannabis firms.
Incredibly (though predictably), this state of affairs has left many cannabis firms to handle their transactions entirely in cash, putting these businesses, their employees, and customers at a heightened risk from thieves.
And it’s driving up costs, as these firms have to hire extra security to stay safe.
In San Diego, for example, police have responded to 54 burglaries, 16 armed robberies, and 10 batteries at dispensaries in the city since 2016, according to a recent investigation from NBC 7.
That troubling situation inspired Hertzberg – a Democrat who represents Los Angeles’ San Fernando Valley – to introduce SB 930 in April. The bill allows for the creation of limited charter banks and credit unions to service cannabis businesses at the state level. It would also allow marijuana firms to use special-purpose checks issued by these institutions to pay for state and local taxes, rent, and goods and services.
The law, which has bipartisan support, aims to have cannabis firms store their cash in the vaults of some of the 914 bank branches in the state that have closed since 2014.
“Keeping the fewest moving parts and as simple as possible because we believe in a matter of years the federal government will change its course, and ultimately, regular banks will be able to bank this cash,” Hertzberg told NBC 7.
While the movement toward special “pot banks” in California has incredible potential to unchain and unlock the immense profit potential in the Golden State’s “fully legal” market, there are some encouraging signs on the national stage, too.
This Bill Has Rare Bipartisan and Presidential Support
Now, it’s easier said than done, but the obvious step that cannabis firms in the United States need to take to shore up their basic banking abilities is a change to federal law. And this year has seen a virtual whirlwind of bills getting proposed by various members of Congress.
In fact, there have been 41 pro-cannabis bills introduced this year in Congress, about the same number that lawmakers submitted from 1999 to 2015, according to a Marijuana Business Daily analysis.
It’s surely a sign lawmakers are feeling the heat from constituents who support legalization in some form or another.
Some, like Senate Majority Leader Mitch McConnell (R-KY), who is looking to legalize industrial hemp in the latest farm bill, are changing their minds due to the potential positive economic benefits that legal marijuana is bringing to their states.
Of course, some of these bills have little chance of making the grade, such as Senate Minority Leader Chuck Schumer (D-NY)’s decriminalization bill.
But one in particular has a good chance of making it out of committee. Now, this bill not only happens to be supported by a bipartisan group of backers, but even the President says he’s supporting it.
And if it passes, it’ll bring relief to cannabis companies’ banking woes…
I’m talking about the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act, which would essentially leave the states the option to legalize cannabis as they see fit, ending the federal prohibition on cannabis.
Sponsored by U.S. Sen. Cory Gardner (R-CO), the bill would “eliminate the basis for a subpoena if the bank was acting in accordance with state law,” according to a spokesperson for Democratic U.S. Sen. Elizabeth Warren (D-MA), who’s also sponsored the STATES Act.
If it passes Congress – and if the President signs it, as he’s suggested he will – any legitimate cannabis firm will be able to use the banking system that virtually all other American companies now take for granted.
And that’ll be great news for the best marijuana firms on the market, like the ones in our Roadmap to Marijuana Millions model portfolio.
This $1.3 Million Profit Opportunity Is Unfolding at the Ballot Box
President Trump’s recent earth-shattering announcement to support ending the federal ban on marijuana sent shockwaves throughout the legal cannabis industry.
And with a record 16 states voting on legalizing marijuana this November, it’s clear that the industry is headed for historic heights.
Time and again, we’ve witnessed this pattern – marijuana legalization passes, pot stocks take off, and early investors have the chance to mint millions.
But this news has the potential to spark even bigger profits than what we’ve seen already… and could help you turn a small stake into a $1.3 million fortune.
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