Sector Snapshot - Payment Solutions
for the Cannabis Industry
Point Roberts WA, Delta, BC
-- September 10, 2019 -- InvestorsHub NewsWire --
via Investorideas.com, a leading
investor news resource covering hemp and cannabis stocks releases a
snapshot reporting on banking and payment issues in the cannabis
industry in both the US and Canada, and some of the new payment
solutions coming to market aiming to address these
issues.
In recent
news, Arizona began looking to
FinTech and stablecoin to help solve the payments problem faced by
the cannabis industry. According to a recent
announcement from the State’s Attorney
General, digital token startup ALTA “has been approved to
enter Arizona’s FinTech
Sandbox,” making it the seventh
participant in the innovative program.
“ALTA is a private financial
services ‘club’ using money transmission services and digital asset
technology aimed at providing a cash management solution for
licensed medical marijuana providers and vendors. ALTA uses digital
tokens to allow members to safely transfer cash. ALTA allows those
tokens to be redeemed for cash and the value of the token never
fluctuates,” the announcement said.
As one recent
analysis put it, “Cryptocurrency accounts
and transactions are anonymous, an additional benefit to customers
who don’t want their marijuana purchases known.” Not only that, but
“digital assets provide for the immediate settlement of funds, or
when combined with blockchain technology provides for nearly
instantaneous validation of all transactions, as opposed to waiting
hours or days for a credit card payment to
post.”
Global Payout
Inc.’s (OTC:
GOHE) subsidiary company, MTrac Tech
Corporation is a software technology, sales and marketing, and
business development company focused on “high risk” and “high cost”
industries. The Company’s flagship product is the MTrac payment
platform offering a full-service solution with technology offerings
including Payment Platform, Blockchain, Compliance, POS, E-Wallet,
Mobile Application and Digital Payment
Solutions.
The Company today reported,
“For the better part of the past several months the Company has
been fully engaged in a two-year audit as part of a key and
necessary requirement to effectively complete its Form-10 filing
and provide the Company with the fully reporting status that
management has been eager to achieve since assuming control of the
Company in June of 2018. Since April of this year, the
Company has been working in collaboration with Albeck Financial
Services, Inc. to review and reconcile the Company’s financial
records from the last two years in preparation to be turned over
for review and audit by M&K CPAS, PLLC, one of the final steps
required prior to filing the Form-10. And while the Company admits
that at times this process has been painstakingly intricate and
complex, it is both pleased in the progress that has been made and
recognizes the overall significance it will provide in helping
Global Payout establish a strong financial foundation that it
believes will be pivotal in fostering its anticipated growth and
expansion over the next several years.”
“We have approached this
process of reconciling our financials with extreme care and
prudence as we understand how important achieving fully reporting
status is to the company,” said Global Payout COO, David Flores.
Filing our Form-10 remains at the very top of our agenda given the
credibility and transparency it will afford us. The filing is a
vital component to establish Global Payout and MTrac Tech as
legitimate powerhouses in the cannabis and fintech market sectors
and we will continue to work diligently on its
completion.”
The Company said it
anticipates releasing additional updates as it relates to this
ongoing audit and as it gets closer to filing its
Form-10.
Not only are we seeing
payment issues in the cannabis industry, but also in the emerging
hemp/CBD space. Entering the public market, Lightspeed POS
Inc. (TSX:
LSPD), one of the TSX’s most notable IPO’s
this year, is known as a disrupter in the payment industry.
Lightspeed® POS software has been a major provider of much needed
organization and productivity to the CBD market by managing
customers, inventory and employees all in one easy
system.
According to a
report on payments, “Lightspeed®
has been around since 2013 and is a merchant favorite with over 50k
users. Now, with the regulation changes on hemp oil, CBD merchants
can now take advantage of this amazing POS system. CBD businesses
are now able to move out of the shadows and flourish along with the
growing public demand for their products.”
Continued:
“Lightspeed® allows you to integrate to iPad POS Systems,
mobile credit card readers and computer desktops. Bring your CBD
shop into the 21st century and provide the comfort and convenience
customers have come to expect.”
In other recent
news, some retailers have found
innovative new approaches to dealing with these payment problems.
In one example, credit card statements will show that a purchase
was made at the “Midgrun Eats LLC Food Truck, not at the
Blüm Marijuana
Dispensary,”
the Reno
Gazette-Journal reports.
“It’s not even a back door,
it’s more like an upper window,” Jeremy Skaff of Colorado-based
Journey Business Solutions told the newspaper. Skaff is a marijuana
business financial advisor.
The label allows Blüm to
take credit cards in an industry that is typically cash-only. “The
more options that you give people to pay, the more business you’re
going to get. No one carries cash anymore,” Skaff told the news
outlet. No other dispensaries in Nevada’s Washoe County take credit
cards except the six Blüm shops.
Size also matters in this
young industry, as according to one recent
report, Planet 13 Holding’s
13,000-square-foot legal retail dispensary in Vegas includes a
“pizzeria and coffee house to attract customers who don’t partake
in the now-legal herb.” Not only that, but “it offers an Apple
Store-like atmosphere, with sleek modern decor, digital projections
and motion-sensor displays, and friendly associates toting
iPads.”
Planet 13 Holdings
Inc. (CSE:
PLTH) (OTC:
PLNHF) also recently
announced that the Cannabition Cannabis
Museum has entered into a lease with Planet 13 to be part of the
Las Vegas Cannabis Entertainment Complex. Cannabition
previously operated a 10,500 sq. ft. cannabis-themed immersive art
museum in Las Vegas featuring more than 20 unique, cannabis
inspired installations that celebrate the art, culture and history
of the medical and recreational cannabis experience. For more
details on Cannabition please visit https://cannabition.com. To
view Cannabition's plans for the SuperStore please
visit here.
"Cannabition's multi-level
immersive cannabis art museum fits perfectly with the SuperStore
mission to create an interactive and differentiated cannabis-based
experience," said Larry Scheffler Co-CEO of Planet 13. "The
SuperStore's addition of a Café, Pizzeria, event center, customer
facing production facility and now Cannabition, will continue to
cement the SuperStore's reputation as a one-of-a-kind shopping and
entertainment destination in Las Vegas; creating an experience that
no dispensary in the world can replicate."
J.J. Walker, Founder of
Cannabition added, "The SuperStore, which already hosts over 3,000
cannabis enthusiasts per day, is the perfect location to bring
Cannabition to a huge new audience and to be a part of the premier
cannabis destination in the world. Our interactive cannabis-themed
art museum has been featured on CNN, Conan O'Brian, and CNBC and I
know Planet 13 visitors will love our immersive exhibits,
innovative event space and curated retail
store."
The lease is for a five-year
term, with an option to extend for an additional three years. As of
the date of this press release, the anticipated size of the
Cannabition premises is 7,000 square feet. Although the final
opening date remains subject to obtaining regulatory approvals in
Nevada, the parties anticipate that the facility will open in Q2 of
2020.
The cannabis cash and
payment problem is not only limited to the US, as a similar problem
exists in Canada, where pot is legal across the
entire country, but where the reluctance of US-based financial
institutions and payment service providers is also
felt.
While this lack interest
from US financial institutions may be felt, it hasn’t slowed the
ambitions of Canadian companies such as AgraFlora Organics
International Inc. (CSE:
AGRA) (OTC:
AGFAF), a growth oriented and diversified
international cannabis company, who recently
provided some licensing guidance and
operational updates pertaining to the Company’s 2,200,000 square
foot Delta Greenhouse Complex.
The Company’s Phase 1
retrofit of its flagship Delta Greenhouse Complex is comprised of
approximately 431,000 square feet of cultivation/processing
expanse, including over 130,000 square feet of net flower canopy
and is estimated to produce 15,000,000 million grams of premium
cannabis annually. With the completion of PSC's Phase 1 retrofit,
the Company's current annual projected output of dried flower is
approximately 160,000 kg including 2020 forecasted production at
its purpose built AAA Heidelberg craft cannabis cultivation
facility. In addition, AgraFlora anticipates the successful
recapture of over 1,000,000 grams of premium cannabis trim to be
manufactured into ancillary value-added cannabis products on an
annualized basis.
AgraFlora worked with
experienced security and licensing consultants at 3|Sixty Secure to
obtain consulting services and produce the attestation package for
the license application. 3|Sixty’s consultants are industry experts
who have worked directly with more than 60 per cent of Canadian LPs
and ensure their clients’ attestation packages meet the highest
standards possible.
Brandon Boddy, Chairman and
Chief Executive Officer of AgraFlora stated, “The successful
submission of our Evidence Package to Health Canada is a momentous
milestone in AgraFlora’s evolution towards the cultivation of
premium, genetically characterized cannabis under 2.2 million
square feet of glass at our world-class Delta Greenhouse Complex.
Based on the most recent timelines from Health Canada, AgraFlora
anticipates the award of a standard cultivation license within six
to eight weeks.”
AgraFlora projects that
Phase 1 of the Delta Greenhouse Complex retrofit will be completed
on or before October 31st, 2019 and upon receipt of a
standard cultivation license, in accordance with the Cannabis Act
and Regulations, expects to immediately import a portfolio of
high-end cultivars under a declaration from Health Canada. As a
result of extensive deliberations with PSC and its industry
consultants, the Company's internal forecasts indicate that the
inaugural harvest at its Delta Greenhouse Complex will occur within
the first quarter of 2020.
Until the passing of the
proposed Safe Banking
Act, which the US House of Representatives
is expected to
vote on in the coming weeks, both US and
Canadian cannabis companies will have to continue to rely on
innovative payment solutions utilizing fintech and blockchain
technologies. Furthermore, while the Safe Banking Act would provide
much needed institutional support, the retail segment of the
industry may continue to rely on these new payment technologies as
they provide not only safe/secure payment methods but also advanced
data analytics which has become a highly valued commodity to the
industry.
For investors following
cannabis stocks, Investor Ideas has created a stock directory of publicly
traded CSE, TSX, TSXV, OTC, NASDAQ, NYSE, ASX Marijuana/Hemp
Stocks
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