Why Marijuana Banking Needs to Change
The marijuana stock market has been booming over the past few years. In that time, we have seen company valuations shoot up, as well as investor faith in the market. Despite the massive influx of capital, banking for the industry has yet to catch up.
This means that marijuana businesses and pot stocks have a more than difficult time handling money in their respective companies. New laws, however, maybe going into effect in the near future that could begin to shift this. For now, this is one of the largest issues that the cannabis stock space has had to face.
Where the Issue Lies For U.S. Marijuana Stocks
The U.S. has become the largest area for marijuana stocks to flourish. Despite more than half of the country putting in legislation to allow weed in some form or another, the federal government has yet to fix their stance. The feds currently view cannabis as a Schedule I narcotic. This means that they believe the plant has no medicinal value. In addition, it also states that they believe cannabis has a high potential for addiction.
This, of course, is not factual and has not been proven by any sort of scientific research. The research that has been done has shown the reality to be quite the contrary. Cannabis has a large amount of potential to treat a wide variety of ailments.
Two Marijuana Stocks as an Alternative for Banking
Brinks Company (NYSE:BCO) is considered to be one of the main companies for cannabis banking. Although they are traditionally a money transport service, the company saw a big gap in the market and began to capitalize on it.
Since marijuana businesses do not have access to banks or traditional financial services, they have turned to companies like Brinks. Brinks can handle everything from the safeguarding of money to transport and more. This is a large part of the reason that the company has seen such an uptick in value over the past year or so.
Innovative Industrial Properties (NYSE:IIPR) is not a traditional marijuana stock either. The company operates as an REIT or Real Estate Investment Trust. This means that they own a series of facilities which they then lease out to those wishing to grow cannabis. Although they do not bank for cannabis stocks, they do offer investments where others do not.
The company has also reportedly leased out all of its facilities. This means that their profitability is as high as it could be. The company has consistently given returns to investors in the form of both dividends and stock price increases. As an alternative marijuana stock, they definitely present a solid opportunity to investors across the board.
All in all, marijuana stocks and the companies that offer banking services, seem to be growing in volume. The hopes are high that this can continue to occur throughout the future of the industry. Only time will tell how long the industry can see success while the banking issue continues to stand.
Published at Fri, 19 Jul 2019 14:19:22 +0000