Profit From Piles of Marijuana Cash

This post Profit From Piles of Marijuana Cash appeared first on Daily Reckoning.

We were recently approached about a lucrative business opportunity…

The business pitch was concise and to the point:

We are THE FIRST company in Maryland to offer an integrated security solution for the transportation of cash and cannabis.

This wasn’t your usual tech startup pitching a new app — the opportunity was simple.

You’ve seen the armored trucks before…

Brink’s, Dunbar Armored, Loomis — they all help traditional retailers securely haul bags of cash from Point A to Point B.

But when it comes to the legal cannabis industry, the big players are largely missing in action.

In 2013 the federal government asked the major armored car companies to lay off the marijuana.

So the big players in the industry have ceded the multimillion-dollar marijuana cash flow to little-known companies.

As Michael Julian, the CEO of smaller armored car firm MPS International, told Bloomberg, “I’m not a brilliant businessman. I just have enough common sense to see that something needed to happen, and we jumped on it.”

As he says, “There are more dispensaries in Denver than there are Starbucks.”

In 2016, Colorado’s legal cannabis industry brought in more than $1 billion in revenue.

But due to federal regulation, the cannabis industry has limited (or no) access to traditional banking services.

Since growers and dispensaries can’t process debit or credit card payments, they’re forced to conduct the majority of their business in cash.

So at the end of the day, more than 450 dispensaries in Denver are sitting on large piles of cash.

Since recreational marijuana was legalized three years ago, there have been nearly 600 reports of dispensary robberies in Denver.

Protecting this multimillion-dollar cash flow creates a lucrative opportunity.

The law enforcement officers that were once trained to crack down on cannabis smugglers are now working for companies like MPS International.

And it’s not just criminals and former law enforcement officers following the money.

Cannabis may be illegal on the federal level, but the IRS still wants its cut — and they’re willing to go after it.

This year, the IRS set up cash-counting rooms in Seattle and Denver to facilitate income tax payments from the cannabis industry.

As we type, armored trucks are making the rounds to deliver bags of cash to tax collectors in undisclosed locations.

By the end of the day, nearly $185 million in taxes will have been paid in Colorado alone for the 2016 tax season.

Meanwhile, Oregon’s retail cannabis industry is projected to generate around $43 million.

But those are pennies compared to the amount that stands to be made a year from today.

By this time next year, armored trucks across 28 states (plus D.C.) will be picking up millions of dollars in marijuana money.

And you likely won’t see the usual names like Brink’s, Dunbar Armored or Loomis printed on the side.

Instead, they’ll most likely be today’s little-known companies that are quietly becoming the industry leaders.

Regards,

Jose Vilchez-Azcona
for The Daily Reckoning

The post Profit From Piles of Marijuana Cash appeared first on Daily Reckoning.

This story originally appeared in the Daily Reckoning . The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today’s markets. Its been called “the most entertaining read of the day.