Legalized cannabis, whether for recreational or medicinal purposes, is at the center of one of the nation’s most transformative industries. Since the passing of California’s Compassionate Use Act of 1996, which made the state the first in the country to legalize medical marijuana, states across the country have been reevaluating the federal government’s decision to outlaw cannabis. In 2012, Colorado and Washington state took another step toward the legalization of cannabis with Amendment 64 and Initiative 502, respectively. With these two measures, the first states in the Union approved the use of marijuana for recreational purposes. Since that vote, the national marijuana industry has been in a period of rapid growth. Following last Tuesday’s election, a majority of 26 states, as well as the District of Columbia, now have laws legalizing marijuana in some form.
Despite the national prevalence of legalized weed, banking remains a major point of contention for the burgeoning marijuana industry. This is because financial institutions are caught between state laws allowing for the sale of marijuana and federal laws that ban it. While the U.S. Treasury and Justice departments previously stated that they won’t pursue institutions that keep a close eye on marijuana-related clients and report any suspected wrongdoing, the need to closely monitor clients in the sector has led many large banks to steer clear of the industry. The result has been the emergence of an all-cash industry, leaving dispensaries and other marijuana-focused businesses unable to accept credit or debit cards from customers.
Operating without electronic payment options isn’t just inconvenient; it can be outright dangerous. A report by the Wall Street Journal (http://nnw.fm/MdnG4) published earlier this year notes that marijuana business owners have taken to “refurbishing retired armored bank trucks to transport money and hiring heavily armed security guards.” With more than half the country having now legalized marijuana in some form, many in the industry feel that the tides could be turning, and Singlepoint, Inc. (OTC: SING), through its SingleSeed subsidiary, is positioning itself to capitalize on this shift.
“For far too long, dispensaries and other marijuana businesses have struggled to maintain a secure and convenient financial position due to legislation that prohibits them from having bank accounts,” Greg Lambrecht, chief executive officer of Singlepoint, stated in a news release issued this morning. “On Tuesday night, seven states loudly voiced their support for legalization. The issue is now too big to ignore, and we expect that Washington will have to hammer out details to create a ‘bankable environment’ for institutions ready to take part in history.”
Earlier this month, Singlepoint announced plans to awaken SingleSeed from a quiet period as politicians on both sides of the aisle continue to push for solutions to the marijuana banking conundrum. With the market for both medical and recreational marijuana projected to grow from about $7 billion this year to roughly $22 billion by 2020, according to ArcView Research, SingleSeed will look to capitalize on a first mover advantage in the cannabis merchant processing business by developing a marketing program specifically designed for cannabis accounts. Before this can be implemented, though, legislators will need to address the banking issue, as Lambrecht alluded to in this morning’s update.
“When that time comes, SingleSeed will already be ahead of the game with its cannabis merchant payment processing services and technologies,” he concluded.
For more information, visit the company’s website at www.Singlepoint.com
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