Pubdate: Wed, 06 Jan 2016
Source: Colorado Springs Independent (CO)
Column: CannaBiz
Copyright: 2016 Colorado Springs Independent
Contact:  http://www.csindy.com
Details: http://www.mapinc.org/media/1536
Author: Griffin Swartzell

MERRILL LYNCH WEIGHS IN ON MARIJUANA INDUSTRY; FOURTH CORNER CREDIT 
UNION FIGHTS IN COURT

Bulls and buds

Early last month, Merrill Lynch Wealth Management sent out a 45-page 
investment report on the medical marijuana industry, which it 
estimates as being worth $2.9 billion nationwide. Merrill Lynch's 
conclusions fall especially "bullish on the cannabis testing market," 
which ML conservatively forecasts could grow to between $50 million 
and $100 million by 2020 as more states legalize.

That's not a huge surprise. ML's report dedicates a fair amount of 
space to potential cannabis-based medicines that treat illnesses 
without getting people high. The report name-drops Charlotte's Web, 
the nearly THC-free Colorado cultivar and CNN darling that helped 
legitimize marijuana as medicine across the nation.

The equipment needed to hold cannabis to the degree of precision seen 
in the larger pharmaceuticals industry is expensive. ML specifically 
mentions three multi-billion-dollar companies as "key providers of 
cannabis [quality control] tools": Agilent Technologies, Thermo 
Fisher Scientific and the Waters Corporation.

Investing in a well-established tech or biotech company carries less 
risk than other areas of the MMJ industry, due in part to investment 
regulations. With the high initial investment required to start a 
testing lab (in both equipment and personnel costs), cannabis-testing 
businesses aren't likely to attract the number of entrepreneurs the 
rest of the industry has seen.

But for all its bullish bluster, the report is guardedly optimistic, 
noting that "due to rapidly evolving and potentially conflicting 
legislation enacted on a state-by-state basis, the cannabis-testing 
industry is subject to disruptive changes."

Canna-banking in court

Last week, Fourth Corner Credit Union had its day in court when Judge 
R. Brooke Jackson of the District Court of Colorado heard arguments 
in Fourth Corner's suit against the U.S. Federal Reserve. Earlier 
this year, the Fed denied Fourth Corner, the first marijuana-focused 
banking institution, a master account - essentially, a bank's 
connection to the Fed's financial oversight system - citing the fact 
that marijuana is still federally illegal and asking the court to 
throw out Fourth Corner's suit. Fourth Corner Vice President Mark 
Goldfogel told the International Business Times he could not find any 
past instances of the Fed denying a state-sanctioned bank its master account.

"The Federal Reserve is not the enforcer of drug laws," Fourth Corner 
attorney Mark Mason told IBT. "We need to get [the marijuana 
industry] right. And if we are not going to have banking ... and have 
millions and millions of dollars on the streets where bad things can 
happen, that is not responsible."

Jackson hinted that he will not need much time to deliberate. Keep an 
eye on here for word on his decision.
- ---
MAP posted-by: Jay Bergstrom