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Replies to post #10035 on Abattis Bioceuticals Corp (ATTBF)
Abattis (C.ATT) looks to be medical marijuana sector’s banker
Though 21 American states have legalized the sale of medical marijuana, and Colorado and Washington have gone so far as to accept recreational weed use, MMJ-based businesses across the US are facing a critical issue that has bottlenecked their industry; how do you bank your money when the banks refuse to take it from you?
Medical marijuana dispensaries, suppliers and associated industries and finding it nigh impossible to put their money in the bank due to the fact federal laws still classify marijuana as illegal. Faced with the likelihood that doing business with ‘criminals’ would cause federal regulatory problems, banks and credit unions are shutting the burgeoning industry out of the traditional financial market.
Banking giants such as Bank of America and JP Morgan & Co won’t even discuss the possibility of taking weed deposits for fear of manic DEA officials storming their offices and charging them as accessories to the drug trade, a fear that isn’t without foundation as the drug enforcement agency continues to raid state-approved medical marijuana grow operations and outlets, charging employees with felonies and confiscating equipment and product.
Frustrated owners and operators of marijuana-related businesses are literally stuck with truckloads of cash, making them prime targets for robbery. They also struggle to safely transport product without hiring expensive local private security firms, as nationally operating transport companies, like Brinks, refuse their services.
Colorado collected $6.1 million in taxes in just the first two months of this year, but understands there’s a lot more out there to collect since, how does a $200m market cap weedco pay its taxes when it’s forced to stockpile C-notes behind the counter?
Answer: It often won’t, so Denver has pushed through legislation creating a new banking co-op facility that would let weedcos work together to create their own banking style institution.
Which is just what we need – stoners running a bank. This, clearly, is all a bit ridiculous.
Enter Abattis Bioceuticals (CSE:ATT, Stock Forum).
Riding a steady stock rise since it became a weedco, the company is hoping to become medical marijuana’s banker with their recent acquisition of a chunk of Instant Payment Systems, a Washington state-based firm that proposes to provide MMJ patients throughout the world with loadable payment cards and a mobile app that will remove cash from the equation and allow the transfer of funds digitally to bank accounts via their system.
The payment cards are intended to serve a dual purpose as they will also allow patients and regulatory agencies to track products and purchases made through the card for both safety and taxation purposes, without a staffer needing to make a run to their car at the end of their shift with a handbag stuffed with twentys.
This could be a big deal for the dot.bong world, but the acquisition of the payment company wasn’t entirely altruistic, as the system is also wired to take a piece of every transaction across the network.
Abattis’ move to purchase a 34% stake in the payment company also serves to place the final piece of the puzzle in its plan to provide seed-to-sale services that apply across the rapidly emerging MMJ sector.
Company president and CEO, Mike Withrow, at a Vancouver reception Thursday, commented on the milestone saying, “This transaction enables the company to provide a valuable service and solves a problem to an unmet need for dispensaries of medical marijuana and other botanical medicines.”
He added, “The IPS cards and phone apps can be branded and loyalty programs can be used so the patients save money and can maintain a budget while managing their purchases of Medical Marijuana. The system also protects dispensaries from carrying cash as funds are automatically credited to their accounts.”
Withrow said, “It is becoming clear that investors understand our comprehensive business model. We are not just about cultivation,” adding, “We look forward to integrating this technology into our Washington State Lab model. We believe the use of this system by dispensaries will become the minimum standard requirement for dispensaries worldwide.”
Making the jump from idea to reality will be the task for Abattis. It can be notoriously difficult to make people pick up an app en masse, even if it helps them buy their weed, but as one prong of a diverse industry strategy, it has a mighty potential upside.
Abattis shares were largely unchanged on the news. The company has a $55.7 million market cap with 47.6 million shares outstanding.
05/03/14 8:48 AM
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