A new decision by a major bank could present trouble in the near future marijuana stocks.
PNC Financial Services (NYSE: PNC) is shutting down its bank accounts for one of the largest advocacy groups for cannabis legalization. The group, appropriately named ‘The Marijuana Policy Project’ (MPP), was informed by a PNC representative that the bank felt it was “too risky” to do business with the organization.
Could the result of this decision by PNC executives affect the marijuana industry? Yes, and it could potentially deflate marijuana stocks in the process.
A representative from PNC confirmed that it would shut down MPP’s account but refused to comment on the details of the situation. PNC did, however, state that “as a federally regulated financial institution. PNC complies with all applicable federal laws and regulations.”
The representative from PNC referred to federal laws such as the Bank Secrecy Act which was enacted in 1970 requiring financial institutions to monitor customers’ accounts for various forms of potential criminal activity. If the company is suspected to be engaging in criminal activity, banks are prohibited from doing business with that company.
Although MPP does not touch the physical marijuana plant, an audit of the organization by PNC showed that MPP received some funding from businesses that are in the physical marijuana industry. This does not necessarily mean that these companies are committing crimes, but rather the fine line between federal and state legislation means that it remains risky for anyone involved. PNC took this information and decided that it would no longer do business with MPP although the organization had been a customer of the bank since its founding in 1995.
The result of this could lead to a domino effect in the industry. If one major bank decides to take an action like this, it could only trigger other banks to follow suit. This could lead small businesses involved in marijuana to only deal with cash in order to survive which is a dangerous and inconvenient system for all. In short, this new budding industry deserves recognition by the financial industry. If the government chooses to tax these companies as they do, it is only fair that they receive bank accounts and treatment as though they are any other business.
The legalization of marijuana has been pushed back by financial establishment in Ohio. The Ohio Bankers League (OBL) has voted against the legalization of both recreational and medical marijuana. OBL has 210 members and does not want to spark a war between federal laws and state laws when it comes to cannabis.
“Marijuana is illegal at the federal level, and handling proceeds connected to marijuana-related businesses also remains illegal – regardless of state law,” said CEO of the Ohio Bankers League, Mike Adelman. “[Issue 3] would put the Ohio banking industry in an untenable position and would render the marijuana industry an all-cash business, creating public safety issues and money laundering concerns,” he concluded.
OBL says that they would reconsider the vote if the federal government were to reform their strict laws. The initiative for the ballot will be decided on November third and would allow residents in Ohio to grow small amounts of pot in their own home. Commercial growing would also be allowed, but limited to only 10 sites. Ohio banks may be a victim of the federal government’s laws if they were to serve businesses that sold marijuana “including the Bank Secrecy Act, U.S. Controlled Substances Act, the Racketeer Influenced and Corrupt Organizations Act and the Patriot Act.” Groups advocating legalization have tried to convince the group that they wouldn’t need to fear over this if the Issue 3 were to pass.
“The Yes on 3 Amendment does not require Ohio banks to take the billions of dollars generated from Ohio’s regulated marijuana industry. Therefore, the Ohio Bankers League has no legitimate concerns to deposit,” stated executive director of ResponsibleOhio, Ian James.
At the moment, ResponsibleOhio looks to be winning when it comes to the opinion of the public with their own Quinnipiac University Poll. According to results, 52% of residents in Ohio would like to legalize pot for recreational use while 84% would like to legalize marijuana for medicinal purposes. Despite these numbers, the Ohio banks are just another on the list of some of the bigger financial institutions (Wells Fargo, PNC Bank, JP Morgan Chase, etc.) that have made it known that they will not be supporting the cannabis firm with their services.
Miami, FL, June 11, 2015 (GLOBE NEWSWIRE) — MJ Holdings, Inc. (OTCQB:MJNE) (“MJ Holdings” or the “Company”) today announced the launch of FindaMarijuanaDoctor.com. The site is a joint venture between the Company and Jason Spatafora, an Internet and social media entrepreneur, who owns the FindaMarijuanaDoctor.com domain name, founded MarijuanaStocks.com and is known by the Twitter handle @WolfofWeedStreet.
. “It’s very exciting to conceptualize an idea and see it materialize in a way that benefits both patients and Doctors in a meaningful way,” said Spatafora.
“During the initial launch phase of the site, the joint venture will focus on on-boarding doctors who are already certifying patients for use of medical marijuana; however the larger opportunity will be in the second phase when they will prepare the broader population of doctors’ to better serve their existing patient bases, and to improve the overall state of medicine by including medical marijuana as an alternative medical option to manage the 25 medical conditions for which States’ have passed laws legalizing its use” said Adam Laufer, co-CEO of MJ Holdings.
As it stands today, there are 21 states, the District of Columbia, U.S. territories Puerto Rico and Guam, that allow for the use of the euphoric ingredient known as THC in marijuana and 15 additional states that have approved the use of CBD strains of marijuana with little to no THC, for medical purposes.
Approximately 64 million Americans suffer from conditions for which marijuana use has been approved by States, despite being illegal under Federal law. These conditions include, but are not limited to, Alzheimer’s, Arthritis, Migraines, Parkinson’s, PTSD, AIDS, Anorexia, Epilepsy and Cancer. What this means for many doctors, is that up to 20% or 1 in 5 of their existing patients could potentially benefit from the use of medical marijuana, but presently only a few hundred doctors nationwide are engaged in recommending marijuana to their patients.
Features included in the FindaMarijuanaDoctor.com website are: search tools for patients to locate doctors, scheduling tools for doctors to book patient appointments, tools for patients to review and rate doctors, and information and videos for doctors and medical professionals seeking to learn more about the use and recommendation of marijuana for medical use. The site will be free for patients and for doctors, with premium paid services offered to both user groups.
About MJ Holdings, Inc.
MJ Holdings, Inc. is a publicly traded company (OTCQB: MJNE) owns, operates and is developing a diversified portfolio of assets and properties tangential to medical and recreational marijuana; including digital properties, FindaMarijuanaDoctor.com and the Toker mobile app, in addition to our revenue producing real estate portfolio and our KINGSTON® brand Mjuice® line of flavor profiles. We are focused on the growth, development and expansion of our current portfolio of products in addition to exploring strategic acquisitions, which compliment our existing businesses and or which expand our social media reach and sales distribution. For more information please visit us at www.mjholdingsinc.com.
Safe Harbor Statement
This press release contains certain forward-looking statements that are made pursuant to the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words such as “expects,” “anticipates,” “plans,” “believes,” “scheduled,” “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. These forward-looking statements concern MJ Holdings’ operations, economic performance, financial condition, financial services and product offerings and are based largely on MJ Holding’s beliefs and expectations. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of MJ Holdings to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Certain of these factors and risks, as well as other risks and uncertainties are stated in MJ Holdings’ Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and in MJ Holdings’ subsequent filings with the U.S. Securities and Exchange Commission. These forward-looking statements are made as of the date of this press release, and MJ Holdings assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.
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