Carlsbad, CA / June12, 2014 / Permits or licenses for medical marijuana dispensaries have taken center stage in marijuana business media as state and local governments adopt strict application processes for marijuana dispensary permits or licenses. Some entrepreneurs who have been shut out of their respective lottery or selection process without a license or permit have considered legal action against governing agencies, which Fred Dreier of Marijuana Business Daily warns against in most cases.
The recent House vote in favor of eliminating DEA enforcement efforts toward state-compliant dispensaries provides potential framework for federal legislation. It would appear that state-compliant operations which meet or exceed regulatory initiatives are no longer at risk of prosecution by the federal government. State or local governments who restrict the number of dispensaries will change the supply chain in favor of efficiency and scale - permitted dispensaries will cater to an extremely large and ever increasing patient population.
Having a state-compliant operation (or, licensed operation with Health Canada) significantly bolsters potential for equity capital, as it removes an additional layer of perceived risk between investor and issuer.
Sign-Up for FREE Updates from The Marijuana Index!
"The Real Contenders" in Canada
In Canada, there are reportedly more than 600 applications in process for a medical marijuana license under the new laws. As only a handful of actual licenses have been issued, issuer "Tweed Marijuana" (TSXV: TWD) is well positioned in a Canadian market believed to garner more than 400,000 patients. Their $15 million bought deal financing illustrates a level of comfort with investors and sets a precedent of capital formation for other industrial scale producers in Canada who receive a license from Health Canada. James West of Midas Letter reports that Tweed Marijuana has few peers as far as Canadian marijuana stocks are concerned.
Sign-Up for FREE Updates from The Marijuana Index!
Recent US-Based License Recipient
In the US, GrowBLOX Sciences (OTCQB: GBLX) announced that it's wholly owned subsidiary GB Sciences Nevada, LLC obtained a medical marijuana license in Clark County, Nevada. Commissioners only awarded 18 licenses out of 79 final applicants - a three day hearing was conducted in order to make the selections after an unorthodox process which included 6-minute "pitches" to decision makers. Several "high-profile Nevadans" were among those receiving the limited number of licenses.
In addition to receiving a medical marijuana dispensary license in Nevada, GrowBLOX Sciences announced an LOI with First Security Bank of Nevada in a deal where GrowBLOX and First Security would implement a revolutionary cash management system via kiosk. The company hopes to demonstrtate compliance and transparency for their Clark County location and possibly the industry; the LOI appears to be the first public and transparent move between a dispensary and bank involving cash deposits from dispensary operations. A third-party paid for advertising of GrowBLOX Sciences (OTCQB: GBLX) on MarijuanaIndex.org and within certain written publications such as this.
Sign up for FREE Updates from The Marijuana Index!
What Licenses or Permits & Compliance Mean to Capital Markets
More clarity from the federal government on compliance and enforcement means more investor money and bigger players entering the arena. Previously thought to represent tremendous economic and criminal risk, dispensaries which operate in jurisdictions with permits, licenses, or established protocols for compliance are increasingly attractive from an investor's lens.
Regulatory "comfort" in the industry among insiders and active investors is at an all-time high, as illustrated by the size of private equity dollars and sheer mass and overall liquidity of issuers or mergers within the public sector. Some would argue that an overall decline (and general roller coaster) within cannabis public equity prices is extremely bearish, but an exponential increase in companies vying for investor attention means lower liquidity on a per-issuer basis. Investors are likely to become more discerning, especially in light of regulatory actions in 2014. When ambiguity is removed regarding federal treatment of state and locally compliant marijuana dispensaries - look for potential IPOs on national exchanges in the US and acquisition activity to gain in both quantity and size.
Sign Up for FREE Updates from The Marijuana Index!
About The Marijuana Index / MJX Marijuana Index
Network partners of marijuana media leaders Cannabis Financial Network (http://www.cannabisfn.com/), The Marijuana Index was founded in Q1 2013 and represents the first and only registered equity tracking index for marijuana stocks, cannabis stocks, and hemp stocks – providing investors and listed companies with dynamic market data and streaming content. The Marijuana Index provides marijuana investors and interested observers with a medium for research, charts, and a centralized news source on an emerging and turbulent marijuana industry.
Readers are urged to visit http://www.marijuanaindex.org/ for up-to-date information and to sign up for updates.
Follow The Marijuana Index on Twitter @MarijuanaIndex.
Companies or websites wishing to advertise on the index should contact [email protected]ijuanaindex.org – advertising packages are now available.
The Marijuana Index (MJX Marijuana Index, the "index") is a data aggregation service and does not provide promotional efforts, other than text sponsorship or visual advertisements, unless otherwise noted. The Marijuana Index does not offer investment advice. Nothing listed on MarijuanaIndex.org or within this release is an offer to buy or sell securities. Readers are cautioned against using information obtained from The Marijuana Index as a basis for any investment decision. The Marijuana Index makes no warranties or representations as to the accuracy of posted or streamed information on MarijuanaIndex.org or from companies on the site or within the index news feeds. The Marijuana Index was paid $20,000 cash by a third party to provide visual sponsorship and newsletter placement for OTCQB: GBLX for approximately one month of services. The Marijuana Index reserves the right to buy or sell shares in listed or mentioned companies without notice. The Marijuana Index has been registered with leading financial content provider Quotemedia with the ticker ^MMJ since Q1 2013 (the word "registered" is not meant to imply registration with the SEC). The Marijuana Index makes no expressed or implied warranties or representations regarding changes to the index weighting or inclusion / removal of constituents, tier system, current and future features of the website, or any company or sponsor (either product, public issuer, or newsletter) listed or shown on MarijuanaIndex.org or their respective performance.
For more information on the index disclaimer, visit http://www.marijuanaindex.org/ and click on "About" and "Disclaimer."
INCLUSION IN THE MARIJUANA INDEX OR PAID SITE SPONSORSHIP BY ISSUERS / THIRD-PARTIES DOES NOT IMPLY THAT DUE DILIGENCE OR EVALUATION ON ANY LEVEL HAS BEEN CONDUCTED ON LISTED OR SPONSOR COMPANIES.
SOURCE: The Marijuana Index