America’s Big Banks Enter the Marijuana Industry

America’s Big Banks Enter the Marijuana Industry

America’s Big Banks Enter the Marijuana Industry

$JPM, $BAC, $C, $WFC , $MCD, $SBUX, $AAPL, $WFM

A Key issues facing the marijuana industry in the US states with legalized marijuana is their inability to find a bank willing to handle the money.

That is because marijuana remains illegal under federal law, and many banks have refused to open accounts for businesses in the the industry.

The country’s  biggest banks: Bank of America Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C), JPMorgan Chase & Co. (NYSE: JPM), and Wells Fargo & Co. (NYSE: WFC) declared in Y 2015 that they did not provided banking services to marijuana related businesses.

According to study conducted on behalf of “American Banker,” out of 84 applicants to operate medical marijuana dispensaries in Massachusetts filed between June 2015 and September 2016, 29 of the businesses claimed they had accounts at 1 of the  big banks or 1 of the banks’ subsidiaries.

Of that total, 17 had a connection to Bank of America.

The overall all perception is that big banks do not do business with cannabis businesses, but at least in some of cases that appears not to be the case.

What will happen under  the Trump Administration remains to be seen, but Attorney General nominee Jeff Sessions has been clear that he will enforce federal law.

People in North America spent $53.3-B on legal, medical, and illicit marijuana in Y 2016. That’s more cash than Americans spend in a year at McDonald’s (NYSE:MCD) and Starbucks (NNASDAQ:SBUX) combined.

According to a new report from Arcview Market Research, a leading publisher of marijuana market research, the black market is losing ground to its legal counterpart as consumers spend more money each year on legal cannabis.

Progress is slow

The North American legal marijuane market posted $6.7-B in revenue in Y 2016, up 30% from the year before. The illicit market generated 87% of total pot sales, down from 90% in Y 2015.

The numbers suggest the legal marijuana industry is growing quickly, but it has a ways to go before it breaks the black market, which has the lion’s share of revenue.

For the year, tax collections totaled $60-M, a sizable rise above the $45-M expected by state officials at the beginning of the year.

Marijuana retailers have said in recent months that demand remains strong for their products, but sales have suffered because of tight supplies. Questions about pesticide use and changes in the permitting of retailers combined to decrease availability.

Substance use disorder (SUD) has risen with US Vets using medical marijuana for post-traumatic stress disorder (PTSD) in the past fiscal years.

From Y’s 2002 to 2014, the use of marijuana has risen 22.7% in Veteran community, according to Veterans Affairs (VA).

As of Y 2014, 40,000 Veterans with both SUD and PTSD were diagnosed with cannabis use disorder, according to VA.

There are some problems associated with the use of medical cannabis.

Physical dependence is a state that develops as result as tolerance or adaptation from the result of use of the drug disrupting the body’s biochemical balance”.

“Marijuana use by individuals with PTSD may lead to negative consequences such as marijuana tolerance,” according to VA.

 

Cannabis entrepreneurs, borrowing from successful retailers such as Apple (NASDAQ:AAPL) and Whole Foods, are opening dispensaries with natural light, spacious displays and open-floor plans.

With the drug now legal for recreational use in California and 7 other states, such amenities could attract an anticipated flow of new customers who are less familiar with cannabis and may be put off by the industry’s generally dingy shopping experience.

Stay tuned…

 

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

2 Responses to "America’s Big Banks Enter the Marijuana Industry"

  1. Bill Torrington   January 25, 2017 at 1:57 pm

    Please consider the following as a front page article on Post Traumatic Stress Disorder –

    The Transcendental Meditation program has been approved by the U.S. Department of Veterans Affairs (VA) for over 20 years for soldiers with PTSD.

    Kindly watch and share with all –

    “PTSD and Transcendental Meditation – David George, Infantryman” (2:34; https://www.youtube.com/watch?v=6ki4c-XkYsM / excellent!)

    and

    “Transcendental Meditation Improves Performance at Military University” (5:12; https://www.youtube.com/watch?v=oIH0913lQe0 )

    Also see, “Use a Treatment for PTSD That Actually Works” in The Hill, Washington DC

    http://thehill.com/blogs/congress-blog/healthcare/262340-use-a-treatment-for-ptsd-that-actually-works

    and

    “Transcendental Meditation May Reduce PTSD Symptoms, Medication in Active-Duty Personnel” in EurekAlert (01/11/16)

    http://www.eurekalert.org/pub_releases/2016-01/mcog-tmm011116.php

    Thanks!

    Bill @ BillsArtBox.com

    P.S. Please visit https://www.davidlynchfoundation.org/veterans.html for more information.

    Note: Results are available for long-standing PTSD symptoms, as well, including for Vietnam Veterans.

    Also, see the dramatic effects for Domestic Post-Traumatic Stress Disorder for women and children, and for PTSD for “First Responders”, at http://www.davidlynchfoundation.org/#video=6gM_sXiUPvo (5:24)

    Also, from http://www.army.mil/ :

    “Transcendental Meditation – a Path to Healing”

    “Doctors promised him through medication and hard work he could potentially heal over the course of years, but since transcendental meditation he has moved much closer to achieving his recovery in months.”

    – U.S. Army official website

    • Paul Ebeling   January 25, 2017 at 4:16 pm

      I am for that Bill, it works but one has to work at it. Love, peace always, Paul

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