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Budding Legal Cannabis Industry Offers Opportunity Amid Challenge, Chaos

CannabisNewsWire Editorial Coverage: Albert Einstein may have said it best: “In the middle of difficulty, lies opportunity.” The changing landscape of the cannabis industry perfectly illustrates this quote, and who better to know it than the companies and individuals involved in this burgeoning business? Canadians are standing by while government leaders grapple with last-minute details of legalizing adult-use recreational cannabis nationwide, while Americans watch lawmakers debate and often reject legislation that would make some form of the highly regulated plant legal in more states. Companies poised to benefit from this “green rush” are providing services specifically tailored to this growing market that, from the outside, can appear chaotic. Among the companies responding to the call are Global Payout, Inc. (GOHE) (GOHE Profile), Terra Tech Corporation (OTCQX: TRTC), GB Sciences Inc. (OTCQB: GBLX), Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP) and Medical Marijuana Inc. (OTC: MJNA).

The Struggle

One of the most significant issues facing recreational and medical cannabis businesses is finding ready and willing financial institutions to handle the enormous amounts of cash the industry generates. U.S. federal banking institutions are hesitant to get involved, since cannabis remains illegal under federal law. Canadian banks are keeping an eye on the industry while waiting for legalization to take hold in Canada later this year. Even those institutions willing to serve the industry are having second thoughts. Just last month, the Bank of Springfield in Illinois told its cannabis clients it would close their accounts (http://cnw.fm/LyWP5). The decision to withdraw is tied to the January reversal of a policy from President Barack Obama’s administration that discouraged the prosecution of operators under state marijuana laws.

“The bank’s stance is that protecting their customers is paramount,” said Andrew Mack, a spokesman for the bank. “The Bank of Springfield will not jeopardize any of their customers by working with businesses that operate in the legal gray zone.”

Alternative Fintech Options

Global Payout, Inc. (GOHE) and its San Diego-based partner, MoneyTrac Technology (“MTRAC”), offer alternative fintech banking solutions to high-risk industries in the United States, Canada and Mexico. Through customized payment solutions, companies can process and manage electronic payments worldwide. MTRAC recently launched its new “Key to Cashless™” payment option powered by GreenBox blockchain technology (http://cnw.fm/T8hkZ) by placing a demo kiosk in the company’s corporate sales office.

Vanessa Luna, MTRAC CEO, said the company has worked on the project for over a year and a half and is now accepting applications from qualified merchants operating within a variety of “alternative” and “high-cost” industries interested in the system.

“We are extremely excited to be getting this payment platform off the ground, and we plan to pay special attention to marketing and recruiting local governments and municipalities to adopt the technology as a means for both regulating legal cannabis sales and tracking it for tax purposes,” Luna said. “The power of this payment system cannot be overstated; it is a one-of-a-kind service offering that no other company can match, offering cashless transactions, inventory tracking, fully integrated point-of-sale and one-click payroll capabilities and is very much the solution the cannabis industry has been waiting for.”

A Growing Marketplace

Grand View Research reports that the global medical cannabis market is projected to reach a value of $55.8 billion by 2025 (http://cnw.fm/m0Zjp) while retail sales of legal cannabis products in North America alone are expected to fetch $24.5 billion by 2021, according to an article in Fortune magazine. California’s medical marijuana market is already as big as the total markets in Colorado, Washington and Oregon combined, the article states (http://cnw.fm/hK3S7).

Ancillary businesses that support the cannabis industry are growing fast, as well, said Mitchell Kulick, partner at Feuerstein Kulick LLP, a cannabis law firm that provides legal services to companies, funds, investors and lenders in the space.

“The reality is that, despite being illegal on a federal level, medical and adult-use marijuana are by most measures real industries that cannot be ignored and that have the same needs as more mainstream business,” said Kulick (http://cnw.fm/MLcu6). “So, from payroll providers to point-of-sale software to compliance companies, law firms, accountants, and the list goes on, many businesses that are ancillary to the industry are now part of this revolution.”

As part of that “revolution” the MTRAC Kiosk, powered by GreenBox’s state-of-the-art closed loop blockchain technology, can be placed in any business that wishes to conduct cashless transactions. Customers either load currency onto an e-wallet or a pre-paid debit card and then use the digital currency or pre-loaded debit card to pay for purchases. Integrated Compliance Solutions (“ICS”), a leader in the Know Your Customer procedures as well as in legal compliance solutions for the cannabis industry, has committed to serving as the compliance arm of MTRAC and its GreenBox payment solution (http://cnw.fm/FOn5V).

“ICS has done an excellent job of making a name for themselves in terms of offering highly effective and much needed compliance for the cannabis industry,” Luna said. “We believe they have the necessary technology, experience and connections to provide the best compliance our network of clients can benefit from.”

Change of Heart

Former Republican speaker of the House John A. Boehner recently switched sides in the battle to decriminalize cannabis. Once “unalterably opposed” to rolling back federal regulations, Boehner has now joined a board of directors for a cannabis company and is voicing support for veterans to have legal access to medicinal cannabis, the Washington Post reports (http://cnw.fm/Ge34b). His change of heart and mind about cannabis is matched by many Americans who now overwhelmingly voice support for legalizing medical cannabis.

Paying for a cannabis prescription, however, remains a challenge since cash-in-hand is often the only method of payment available. Representatives from MTRAC are already in talks with several California municipalities to implement the company’s payment system as the preferred method for licensed dispensaries in their jurisdictions. MTRAC’s Kiosk offers one of the most effective cashless alternatives to these businesses in a way that meets compliance and regulatory requirements, the company said in a news release (http://cnw.fm/9U2gQ).

On the Bandwagon

GOHE and MTRAC aren’t the only companies that have seen — and responded — to a need in the cannabis industry. Other companies are moving to the forefront as they provide services specifically geared for this blossoming market.

California-based Terra Tech Corporation (OTCQX: TRTC) is a vertically integrated, cannabis-focused agriculture company committed to providing the highest-quality medical cannabis and other agriculture products. Terra Tech, which just reported a 41 percent year-over-year revenue growth for 2017, has established extensive cultivation capabilities and retail outlets in California and Nevada.

“Cannabis analytics firm New Frontier projects Nevada’s total cannabis market to be $622 million by 2020 and we are excited by the opportunity to participate in its growth,” Terra Tech CEO Derek Peterson said in a news release (http://cnw.fm/ExV4Q).

GB Sciences Inc. (OTCQB: GBLX) is a diverse cannabis company focused on standardized cultivation and production methods as well as biopharmaceutical research and development. The company’s goal is creating safe, standardized, pharmaceutical-grade cannabinoid therapies that target a variety of medical conditions, including Parkinson’s disease and neuropathy. GB Sciences recently received its license for cannabis oil production, which will soon begin at a Las Vegas facility, and expects retail sales revenues of its products to roll in during the second quarter of 2018, the company stated in a news release (http://cnw.fm/J4wCj).

Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP) has developed and out-licenses its proprietary DehydraTECH technology for improved taste, rapidity and delivery of bioactive compounds including cannabinoids. The company’s disruptive technology is proven to enhance the absorption of orally ingested cannabinoids while improving the taste, which allows for lower overall dosing with higher efficacy. Most recently, Lexaria received a new U.S. Patent Allowance for enhanced cannabinoid delivery using its DehydraTECH technology (http://cnw.fm/8vnXq). Lexaria currently has 15 patent applications filed in the United States and over 30 pending in more than 40 countries, plus two patents granted for cannabinoid delivery in the United States and one granted in Australia.

Medical Marijuana, Inc. (OTC: MJNA), headquartered in California, is a cannabis and industrial hemp company whose subsidiaries and investment holdings are involved in the development, sale and distribution of hemp oil and other products containing CBD-rich hemp oil. The company’s products are formulated for the pharmaceutical, nutraceutical and cosmeceutical industries, including dietary supplements. The company also sells its products in several countries that have legalized its products for the treatment of various illnesses and conditions. Medical Marijuana subsidiary HempMeds® announced at the Pittsburgh World Medical Cannabis Conference & Expo (http://cnw.fm/O3WBc) that it has released a new roll-on, topical hemp product specifically targeting athletes and active adults.

Look Out, It’s 2018

California’s conversion to statewide recreational cannabis is already experiencing some missteps and growing pains. Canada’s move to become the first Group of Seven nation to legalize adult-use marijuana is dominating international discussions while cannabis entrepreneurs scramble to capitalize on its legalization. Alcohol companies see opportunity amid the chaos, with some investing in cannabis firms or planning to introduce their own cannabis-infused products. Several companies serving the cannabis industry are looking at creating ways to avoid cash transactions through blockchain technology’s promise of a tamper-proof form of digital bookkeeping through a distributed, encrypted ledger. The cannabis industry’s growth presents challenges and opportunities on a variety of interesting and potentially very lucrative levels.

For more information on Global Payout, Inc., visit Global Payout, Inc. (GOHE).

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