While the banking industry is avoiding the emerging marijuana-related business, mainstream investors are preparing to jump in as it is expected to become legal in many more states within the next three years.
Earlier this month Founder’s Fund, a San Francisco-based venture capital firm, announced it was making a multimillion-dollar investment in Privateer Holdings, a private equity group that owns several cannabis-related companies.
Soon after that announcement, Privateer Holdings noted the Founder’s Fund investment signaled they believe that the end of (marijuana) prohibition and the social harms it causes is inevitable.
According to research quoted by the magazine Inc., investors have placed over $104 million in cannabis and cannabis-related companies, while investment in the marijuana industry rose by 941.5 percent in 2014.
And Todd Harrison, former hedge fund manager and founder and CEO of the financial media company Minyanville, told Yahoo Finance that the cannabis industry “will be the single best investment theme for the next ten years, in my view.”
Last year, WA-based BioTrackTHC says it is aiming to remove the banking roadblocks for states with active marijuana businesses. The new BioTrackTHC STS Multi-Point verification banking program is intended to solve all of these issues within one module for banking, credit cards, and debit solutions.
According to the federal government Controlled Substance Act, marijuana is considered a Schedule I substance, the most tightly restricted category. This status has proven to be a challenge for states with marijuana laws when it comes to banking, as any movement of funds could be considered a felony. Due to banks’ fears of being implicated in money laundering, they are unable to work with the cash-only system. The system also puts retailers’ safety at risk and creates issues involving taxes and employee payroll.
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