Largest U.S. Banks Host Accounts for Marijuana Businesses, Says American Banker

NEWS PROVIDED BY FinancialNewsMedia.com 

Jan 31, 2017, 08:30 ET


CORAL SPRINGS, Florida, January 31, 2017 /PRNewswire/ --

A recent study[1] commissioned by industry journal American Banker reveals that the nation's four largest banks have opened accounts for pot shops and marijuana-related businesses. This is good news for companies like Cannabis Science Inc. (OTC: CBIS), Eco Science Solutions, Inc. (OTC: ESSI), Medical Marijuana, Inc. (OTC: MJNA), Marijuana Company of America Inc. (OTC: MCOA), mCig, Inc. (OTCQB: MCIG) and YiLoLife, Inc. - all of which provide a variety of services or interest to the marijuana community and would benefit from commercial banking services.

Conducted by MRB Monitor, a firm that helps financial institutions identify the risks associated with the marijuana industry, the study examined public records in the state of Massachusetts and found that 34 percent of businesses that filed to operate medical marijuana dispensaries in Massachusetts between June 2015 and September 2016 had one or more accounts at Bank of America, Citigroup, Wells Fargo, or JPMorgan Chase.

If a similar pattern of working with the marijuana industry takes hold in Washington D.C. and the U.S. states that have legalized marijuana, the prospect of financial services for cannabis outfits may not be as dire as it at first appears.

Bank of America seems to have been the most accommodating. Over half of the marijuana businesses included in the survey had accounts at the bank, though it previously told the Statesman Journal[2] that, "As a federally regulated financial institution, we abide by federal law and do not bank marijuana-related businesses."

Guidelines issued by federal authorities in 2014 appeared to have offered financial institutions a legal avenue to provide their services to marijuana-related businesses (MRBs). Back then, the Financial Crimes Enforcement Network (FinCEN), part of the U.S. Treasury Department, provided guidance[3] it said was meant to enhance the availability of financial services for, and the financial transparency of, marijuana-related businesses.

Yet, under the Controlled Substances Act (CSA), it is illegal to manufacture, distribute, or dispense marijuana, and marijuana - like heroin, LSD and ecstasy - remains a Schedule 1 substance under the statute.

In December 2016, U.S. Senator Elizabeth Warren, D-Mass, a member of the Senate Banking Committee, along with nine other senators sent a letter to FinCEN requesting guidance on how banking services might be offered to 'indirect businesses' that provide services to the state-sanctioned marijuana industry.

Hopefully, after nomination season comes to a close, a response to that letter will be forthcoming; there's a lot at stake. As ArcView Market Research wrote, "Cannabis is arguably the fastest growing industry in the world. Regulated marijuana sales in North America totaled $6.9 billion in 2016, a 30 percent increase from 2015. Sales are projected to increase to $21.6 billion by the year 2021 representing a 26 percent compound annual growth rate."

YiLoLife is gearing up to reap this burgeoning marijuana harvest. The company recently offered up to 5 million shares of its Class A common stock, at a price of $3.28 per share, under a Regulation A+ filing. YiLoLife plans to use some $12 million from this share offering in adding capital assets, as well as toward the acquisition and development of cultivation, food processing and distribution facilities. A further $1.5 million will be expended on equipment, furniture and fixtures and $1.0 million will go to improve security. The remaining $1.9 million will be allocated toward bolstering working capital.

Other industry players are also positioning themselves. Cannabis Science (CBIS) is a biotech company that discovers and develops novel cannabinoid-based therapies to those critically in need of new treatments for life threatening and debilitating conditions. Eco Science Solutions, Inc. (ESSI) is a Hawaii-based technology company targeting the multi-billion dollar health and wellness industry.

Marijuana Company of America (MCOA) is a marketing and distribution company that plans to deliver all the benefits of cannabis by providing a wide range of services for cannabis businesses and entrepreneurs. The company focuses on leisure, wellness, health, and beauty-specific cannabis products.

Medical Marijuana, Inc. (MJNA), the first publicly traded cannabis company in the United States, announced this week that its subsidiary HempMeds® Mexico has launched its new website, featuring a fresh interface, educational info, and online services for medical marijuana customers.

And last but not least is mCig (MCIG). Driven by a management team with over 75 years of combined experience, this is a company that provides turnkey, durable, modular, ISO clean, high-yielding cultivation rooms to marijuana growers.

*Sources:

1. American Banker http://dtn.fm/VAWa8

2. Statesman Journal http://dtn.fm/coPF7

3. FinCEN http://dtn.fm/SB8p6

For more information on YiLo please visit the company's crowd-funding page at http://www.yilo.com/stocks2850

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Largest U.S. Banks Host Accounts for Marijuana Businesses, Says American Banker