CannabisNewsWire
Editorial Coverage: Investors seeking opportunities in the
cannabis market may want to turn their attention toward companies
offering solutions for a situation that could otherwise slow the
industry’s growth. A number of emerging firms are providing or
pursuing payment options that can help cannabis companies sidestep
the roadblock created by the lack of access to traditional banking
services. Among the companies honing financing, payment processing
and other business development services for the cannabis industry
are Global Payout, Inc (OTC: GOHE) (GOHE
Profile), MassRoots Retail (OTC: MSRT), iAnthus Capital
Holdings, Inc. (CSE: IAN) (OTC: ITHUF), and Glance
Technologies, Inc. (OTC: GLNNF) (GET: CNX). Meanwhile,
recent action at Canopy Growth Corp. (CC: WEED)
demonstrates that a change in bank industry policy could be on the
horizon.
In Arizona, the state Department of Health Services reported
that its dispensaries sold over 43 tons of medical marijuana
through year-end 2017, an increase of 48 percent from 2016. Capitol
Media Services estimates the quantity of medical marijuana sold in
Arizona in 2017 represented approximately $275 million in retail
sales for the year. Sales in the United States as a whole represent
a multibillion dollar market that is only expected to grow as the
legalization process continues to spread. In Canada alone, taking
into account the planned July 2018 legalization of recreational
cannabis, sales of the product are expected to reach C$6 billion by
2021.
Despite the massive sales figures, cannabis companies largely
conduct business in cash. With marijuana classified as a Schedule 1
drug at the federal level in the United States, the cannabis
industry is essentially unbankable there, creating an opportunity
for companies that can help industry participants process the
payments generated by cannabis sales.
The Struggle to Organize Necessary Elements of
Infrastructure
For the time being, cannabis businesses continue to struggle
with financing issues related to customer receipts and budget
expenditures, especially in the United States. While U.S. banks
have overwhelmingly refrained from doing business with cannabis
companies due to the federal prohibition on sales of the product,
in Canada some banks have begun to offer business accounts to
cannabis companies. Even when Canada does begin legalization in
mid-2018, however, there’s no guarantee its banks will be quick to
finance cannabis companies. The year is expected to be a landmark
period for cannabis-related businesses, yet there’s still a fair
amount of uncertainty about how they will fare. Global Payout,
Inc. (OTC: GOHE) is one company positioned to help alleviate
that uncertainty through a number of payment processing
services.
Payment Solutions for the “Unbankable”
Global Payout’s fintech payment solutions can be fully
customized for virtually any domestic and international
organization distributing money worldwide. Through its MoneyTrac
Technology (“MTRAC”) subsidiary, Global Payout is focused on
helping reduce the extensive security, accounting and overhead
costs dispensaries face from having to deal exclusively in cash.
The reliance on cash transactions by cannabis businesses leaves
these companies vulnerable to theft and facing all the
inconvenience associated with running a cash-only business. And the
problem is only expected to grow more acute as the rapidly growing
multibillion-dollar industry continues to expand, with cannabis now
recreationally available in eight states.
Addressing this opportunity in the company’s letter to
shareholders, Global Payout CEO James Hancock stated: “Recognizing
the gap between adequate financial technology solutions and the
rapidly expanding, multi-billion-dollar cannabis industry, a
collective decision was made in March to spinout our majority owned
subsidiary, MoneyTrac Technology to begin serving the underserved
businesses of the cannabis industry. … These partnerships, combined
with several other important developments throughout the year, have
effectively positioned MoneyTrac to generate revenue and become a
recognized leader of a variety of service and solution offerings
within the cannabis industry.”
MTRAC plans to launch its regulatory compliant token offering in
the first quarter of 2018 as part of an effective, decentralized
system for processing payments (http://cnw.fm/eoPQ3). The M-Token from MTRAC will
allow vulnerable businesses to migrate from a cash-only business
model by offering the basic yet essential services denied to them
by the traditional banking industry. In the process, the businesses
can improve their security and boost their operational
efficiency.
Vanessa Luna, CEO of MTRAC, stated, "MoneyTrac's primary
objective has been, and will continue to be, to serve the
legitimate and profitable businesses of the cannabis industry by
effectively addressing the financial technology and banking
challenges they are faced with. … Our regulatory compliant Token
Offering will revolutionize how these businesses operate and help
MTRAC further its objectives for identifying various partnerships
and cultivating the relationships necessary to pave the way for
alternative banking solutions."
Cannabis Compliance
To help it develop a strong foundation for the delivery of
banking solutions to the legal cannabis industry, MTRAC recently
signed a joint-venture agreement with Integrated Compliance
Solutions, LLC (“ICS”), a leading provider of financial regulatory
compliance services and solutions to the retail cannabis industry.
The partnership bolsters MTRAC’s ability to provide compliant
banking solutions with its strategic partners.
In the press release announcing the agreement, Luna emphasized
the importance in maintaining compliance in the heavily regulated
retail cannabis industry.
“The ICS team carries several years of valuable experience with
them in the field of regulatory compliance solutions and financial
technology services for banking, and their integration into the
banking solutions (that) we are dedicated to delivering to the
cannabis industry is not only significant, but essential to our
commitment of providing retail cannabis businesses with the most
compliant and regulated banking solution available,” she stated
(http://cnw.fm/xiq7H).
Exploring Expanded Marketing Opportunities
Global Payout also recently signed a Sales Partnership Agreement
with Eyeconic.tv in a move to explore the potential of creating new
revenue streams (http://cnw.fm/vnXs7) while boosting the impact of both
parties.
The companies plan to leverage the network of dispensaries and
industry-specific brands and products established through MTRAC’s
PotSaver publication in conjunction with Eyeconic.tv’s digital
media platform. Eyeconic.tv is an innovative producer and
distributor of interactive digital mediums focused mainly on
digital menus, advertising and kiosks to customers on their
business premises. PotSaver is a revenue-producing community
periodical and online advertising platform that provides listings
for discounted cannabis-related products to local dispensaries and
shops.
“Establishing this sales partnership with Eyeconic.tv is an
incredibly effective way to deliver more value to the solutions and
services we are providing to cannabis-related businesses. The
Eyeconic.tv team are true pioneers in the digital marketing and
advertisement space and have established themselves as the premier
provider of these services throughout the cannabis industry. I am
pleased they recognize the value we can bring to their brand
through the network of dispensaries we have created through our
PotSaver publication, as well as through the invaluable expertise
our team offers in developing and implementing successful sales and
marketing strategies. I am extremely confident that this will be a
partnership that is mutually beneficial to the objectives of each
of our companies,” Luna said.
Additional Cannabis Payment Solution-Related
Opportunities
In a sign that Canadian banks are beginning to change their
position about financing cannabis firms, Canopy Growth Corp
(CC: WEED), a diversified Canadian cannabis company that
offers curated cannabis in dried, oil and capsule form, has
recently announced a $175 million bought stock offering led by two
major Canadian investment banks — Bank of Montreal, through its BMO
Capital Markets division, and GMP Securities. Canopy Growth
operates on four continents where it sells cannabis products,
conducts R&D, and provides cannabis-related education for
healthcare practitioners.
While Canadian banks may be beginning to change their stance on
financing cannabis firms, it should be noted there are no signs of
such a thaw to the south where banks continue to avoid doing
business with cannabis firms because of federal regulations. Canopy
Growth’s extensive operations outside of Canada mean that the firm
can still benefit from payment solutions that enable it to reduce
the amount of cash transactions it conducts.
MassRoots (OTC: MSRT) offers one of the most
popular technology platforms for the regulated cannabis industry.
The company’s mobile apps, with more than a million users, enable
consumers to draw on community-sourced reviews to make educated
cannabis purchasing decisions. The company offers a compliance and
point-of-sale system called MassRoots Retail, which helps cannabis
businesses conduct retail operations more efficiently and manage
compliance reporting as required by state regulators. MassRoots has
recently formed a blockchain subsidiary focused on developing
solutions for the cannabis industry based on the blockchain. The
company believes that making use of the transparent digital ledger
that constitutes the blockchain can help the cannabis industry
operate with greater efficiency, accountability and
transparency.
iAnthus Capital Holdings (CSE: IAN) (OTC:
ITHUF) offers investors exposure to licensed cannabis
cultivators, processors and dispensaries located across the United
States. The company offers capital as well as hands-on operational
and management expertise. With seven investments in six states
covering an addressable market of approximately 50 million people,
the company’s dispensaries stand to benefit from access to
innovative payment processing and financial solutions that enable
them to more efficiently handle transactions.
Glance Technologies, Inc. (OTC: GLNNF) (GET:
CNX) owns Glance Pay, a mobile payment system transforming
the way smartphone users interact with merchants and buy products.
The company’s partially owned subsidiary, Cannapay Financial, is
the vehicle for Glance Technologies’ entry into the cannabis
industry through licensing agreements that leverage the Glance Pay
App and the Glance Merchant App’s data analytics. Cannapay
Financial has two apps in development — Cannapay, a
mobile-to-mobile payment system for the marijuana industry, and
SuperDope Delivery, a mobile ordering and delivery app for cannabis
consumers.
The tremendous growth being experienced by the cannabis
industry, coupled with the difficulty cannabis businesses are
experiencing in accessing banking services, especially in the
United States, have created significant opportunities for firms
that can offer these businesses effective methods of processing
transactions. Each of the companies listed above is positioned to
benefit from this evolving trend, making them worthy of further
investigation by investors looking to capitalize on the expansion
of the cannabis industry and the corresponding development of
payment solutions to facilitate that expansion.
For more information on Global Payout, visit Global Payout,
Inc. (GOHE)
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