This bank is doing something most others are afraid to come near – and it could mean huge things for the cannabis industry.
In 2016, the voters of Arkansas legalized medical cannabis, but there’s been one big problem.
Most banks won’t work with marijuana companies. They are afraid of accepting funds from an “illicit” business, thanks to former Attorney General Jeff Sessions’ crusades.
But there’s one bank in Arkansas that sees huge potential working with this emerging industry, and I want to applaud them for being progressive.
John Stacks is the CEO of HomeBank of Arkansas.
After watching his father struggle with cancer, he changed his views on medical cannabis, according to local TV station KTHV.
“Got me to thinking more about the acceptance of medical marijuana today, and actually turned my view around from having been strongly against all those aspects, really, until I just educated myself a little bit as to what the benefits could be,” Stacks told the station.
He and his board of directors agree that working with people and companies in the medical cannabis community is not only good business – but good for the community. Legal marijuana dispensaries will help curb sales on the black market.
Safe Harbor Services, a specialty firm that connects cannabis-related businesses with financial institutions, will analyze applications and prepare paperwork for HomeBank.
Stacks wouldn’t speculate on how much the $10 billion cannabis industry could add to HomeBank’s bottom line.
But when you’re the only game in town, you make all the money…
Banks Will Start Cashing In on the Cannabis Market
Bank CEOs have been in a tough position with mixed signals about marijuana legalization coming from the Trump administration.
But there’s always a little bit of risk involved when it comes to big profits. For example, asset management company Cowen Inc. invested $1 million in Tilray Inc. (NASDAQ: TLRY).
Everyone was talking about Tilray after its IPO. Shares opened at $23.05 – and they went to the moon shortly after – reaching $300.
That original $1 million bet Cowen made on Tilray?
It was worth $18 million at the end of September 2018, according to Barron’s.
The marijuana industry has already completed its first monumental strides… but according to this recent announcement, this was only the beginning. In fact, there could be an entirely new wave of millionaires minted – virtually overnight. This rare occasion doesn’t happen often – so take this as a final warning. Just click here for the full story.
And don’t forget about the fees bankers make as underwriters of IPOs. In 2016, the average underwriting fees on a deal size greater than $1 billion was 4.7% of the deal.
That’s a nice $47 million payday for banks on a $1 billion IPO, just from fees.
And folks – I’m here to tell you this industry is too large to stop. Bankers will start working with cannabis companies sooner rather than later. (I recently spoke with John Vardaman, the co-author of the Cole Memo, and you won’t want to miss what he said about banks and cannabis companies.)
Some believe cannabis could be a market worth $1 trillion.
However, don’t take just my word for it.
Former Speaker of the House John Boehner said at the American Cannabis Summit that he is now “all in” on cannabis.
“This is inevitable. Voters want it. Economic benefits are too big to ignore. Let me just say, I have a strong suspicion we won’t be waiting five years to see the federal government legalize cannabis,” Speaker Boehner said.
He knows how Washington works better than anyone does.
Once more states legalize cannabis, more banks will feel comfortable working with them. That means cannabis companies can access traditional financial services and receive loans to buy more product, equipment, and open more dispensaries.
And with cannabis startups able to access traditional financial services, we’re going to see more marijuana IPOs than ever before.
This is an exciting time to be a cannabis investor, and I’d like to thank you for being an important part of the National Institute for Cannabis Investors,
Executive Director, National Institute for Cannabis Investors
P.S. The prohibition of cannabis is quickly becoming a thing of the past in modern America. But within this million-dollar opportunity also lies nearly a million different hitters in the game – making it nearly impossible to identify the winners from the wannabes. That’s why we’ve done the heavy lifting for you – and narrowed it down to four pot stocks with MASSIVE upward potential…