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Monday, May 29, 2023

Medbox Shares Jump on U.S. Banking Ruling

Shares of West Hollywood marijuana services provider Medbox Inc., jumped 27 percent on Friday after U.S. officials took steps that could lead to banks being able serve marijuana-selling businesses.

The Justice Department released a memo indicating it wouldn’t pursue enforcement against banks that do business with the marijuana industry if the banks comply with department guidelines.

Also, the Treasury’s Financial Crimes Enforcement Network on Friday issued banking guidelines with the goal of reducing dangers that pot sellers now face in operating an all-cash business, according to a Bloomberg News report.

“Financial institutions can provide services to marijuana-related businesses in a manner consistent with their obligations to know their customers and to report possible criminal activity,” the Treasury Department said in its announcement.

Marijuana industry advocates and officials in Colorado and Washington states, where voters have approved the sale of marijuana for recreational use, had asked for the guidelines.

Medbox, which sells automated dispensers that can be used for marijuana, isn’t directly affected by the action since it does not sell marijuana and already has access to commercial banks. But the company’s customers are medical marijuana dispensaries around the country and stand to benefit directly.

Shares closed up $6.70, or 27 percent, to $31.75 on Over-the-Counter Bulletin Board.

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