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I trade mainly on sentiment & leave the more technical aspects to other Wolves, but I do chart. I have a group of traders that pool resources & $$$ to make the #Wolf-Fund. My persona on twitter @wolfofweedstreet only discusses Marijuana related stocks. I Am the Wolf of Weed Street and... More
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  • Blue Line Protection Group: Solving Banking & Security Issues In MMJ...

    The other day we issued a "Connect the Dots" piece identifying yet another niche sector of the cannabis market providing an opportunity for our subscriber base. As the industry continues to grow and more and more states move towards acceptance, the one area that seems to be overlooked is banking and security. Therefore, a potential value opportunity exists for investors as banking and security companies begin capturing market share with each new passing state.

    The one company we highlighted in this space is Blue Line Protection Group (OTCPK:BLPG). And why? Because this company is solving both problems with one solution. Not only does BLPG provide top notch security from special ops military veterans and police officers, but it also offers convenient banking solutions that could remove all cash transactions making for a much safer work environment and easier banking. The anticipation is (if it's not already happening) is a supply and demand issue regarding those that need added security/banking services, and those firms like Blueline that can supply either service for the client..

    As many seasoned MMJ investors know, a company needs an element outside of its fundamental business model to attract investors. As Peter Lynch says "Buy what you know," or in this case what is currently becoming topical conversation when it comes to all the money being generated within the states with some form of Marijuana growth taking place. All too often you hear or watch stories about how banks can't except the cash these Grows or dispensaries are making. As these stories become more topical and pervasive Media outlets look for angles to these tales from a pragmatic viewpoint. Example: Dispensary "A" has a $1,000,000 in cash, since they can't put it in banks, how do they protect it and/or store it? It is here that they land on a company like Blueline; and they have certainly covered them. Good media relations as well as spots in TV specials like "Pot in America" on CNN go a long way, but what is enticing about this angle is that they were being discussed before they were even public.

    This Colorado based company was recently featured on abc7 News as they began training in Illinois as the state started issuing licenses to grow and sell medical marijuana.

    Click here to see the video:


    In unmarked armored vehicles, Blue Line teams come to non-descript marijuana growing factories to make daily pick-ups of marijuana. The product is in zip-locked, serial numbered buckets.

    The abc7 News Team accompanied state-licensed delivery teams, most ex-military and former law enforcement, to hand-carry the buckets into retail outlets that sell recreational or medicinal marijuana. The delivery buckets are unzipped and the contents checked. Store clerks and the armed guards then sign off on state paperwork.

    "We verify everything that is manifested is actually in the buckets," said Matt Karr, Blue Line Protection operations manager. "We take it off, we transport it. It's in the same container we haven't touched it; we haven't manipulated it in any forms and it's ready to go."

    But security also picks up the proceeds; truck-loads of cash, sometimes $1 million a day on each run. And therein lies the security risk. A 25-year SWAT commander, Grant Whitus is in charge of their training and will oversee security hires for his company in Illinois, where marijuana is a multi-million dollar business on the brink. And that's just one state. Blue Line has reported operations in Colorado, California, Alaska, Washington, Oregon, Nevada, and the District of Columbia.

    "The biggest threat of course is what do you do with those large amounts of cash," said Blue Line's VP of Operations and Compliance Ricky Bennett, a former Colorado police chief.

    The problem with marijuana cash, Bennett says, is that most banks don't want to touch it. Even though some states have legalized marijuana, the federal government hasn't, and banks are federally regulated.

    Until that is addressed, in Illinois and elsewhere, millions in marijuana profits will have to be stored by security companies. And as the marijuana industry grows, it becomes more and more clear how much of a need there is for security companies like Blue Line.

    The actually recently published a video about Blue Line and their growing market share in Colorado titled "Marijuana Banking: An Armored Car Ride Along to Denver Pot Shops."

    Click here to see the video:


    The media exposure and recognition of Blue Line continues as discussed the business potential behind Blue Line in an article titled "Pot Industry is a Buzz-kill for Banks" where they stated how there is a growing need for security and banking solutions for the marijuana industry.

    Read the entire article here:

    The article mentioned how Blue Line recently partnered with payment processing company Payteller Finance in a joint venture to provide marijuana businesses a mix of security services and access to Payteller's JaneFour20 digital payment kiosk, which the companies say eliminates the need for cash transactions.

    Even media giant CNBC has taken notice of what Blue Line is doing in a documentary titled "Marijuana Country: The Cannabis Boom"

    Click here to view the video:


    Big banks are still not accepting cash deposits from marijuana businesses. This poses a heightened risk for everyone associated with those businesses as there are always large amounts of cash on site. There is a clear need for security as well as banking solutions and Blue Line is providing their clients with both. Mainstream media has started picking up on the story as the company continues to swallow up market share with each new passing state to accept the use of medical or recreational marijuana. And there's just one other thing Blue Line is doing that most other marijuana related companies are not, that's generating revenue. The company has a laundry list of clients all over the country that continues to grow almost coincided with the industry as a whole so we expect the media exposure to only increase.

    We can see the news headlines now: "Blue Line Security Guard 'Smokes' Wanna Be Thief."

    Once a news story breaks about a Blue Line guard preventing a robbery or saving someone's life, all of Wall Street will learn about this company, but the idea here is to anticipate the news, not buy when you're reading about it in the Wall Street Journal.

    Once a news story breaks about a Blue Line guard preventing a robbery or saving someone's life, all of Wall Street will learn about this company.

    Mar 17 4:28 PM | Link | 1 Comment
  • Part 2 GBLX: Risks & Rewards...

    GrowBLOX Sciences Changing the landscape for the Marijuana Industry

    There's no doubt that the marijuana industry is booming with new opportunities both from a business development stand-point and from an investment approach. The current market landscape has opened up many options but the bottom line is this: if dispensaries can't get product, IE marijuana, there's really no market to be had. More importantly for states like New York, Florida, and Illinois which have all just put medical marijuana plans in place, the necessity to have a consistent medical grade product is paramount to the entire market within those states.

    After looking through the industry, I've found that there is, in fact, a company that focuses solely on medical grade marijuana production in order to deliver an effect and consistent strain with each and every crop. GrowBLOX Sciences, Inc. (OTCQB:GBLX) is a "research and biotechnical development company setting the gold standard for manufacturing medical cannabis producing technology, as well as discovering, developing, and commercializing proprietary strains of cannabis to treat a broad range of serious medical conditions." Based on its unique technology, individual proprietary cannabis strains for treatment of specific medical ailments, and the company's four revenue drivers, GrowBLOX has the ability to become a key player in the industry.

    Early Foothold in the Growth and Dispensary Market

    To date, GBLX has begun to build a footprint within the medical MJ space in several key states. First, in May the company was up for approval as one of Nevada's "elite 18"; only a little more than a handful of companies that were granted special use permit licenses for medical marijuana dispensaries. The GrowBLOX chamber has gained the attention from the marijuana community for its ability to successfully produce consistent strains of medical grade marijuana in a fully enclosed, climate controlled medium.

    GrowBLOX has remained steadfast in the companies approach to build revenue through in state partnerships similar to the operations in Nevada via GB Sciences, NV. As of recent, GBLX has applied for 2 additional licenses within the state and if approved, will have dispensaries in high traffic areas within the Las Vegas market, which will utilize the GrowBLOX technology to provide a consistent product across the state to thousands of residences and millions of tourists who fall within its boarders.

    In addition to Nevada, GrowBLOX has also begun to establish itself within the Florida market via a wholly owned subsidiary, GB Sciences Florida, LLC. According to the company in a recent press release discussing the move, GrowBLOX Sciences recognizes Florida's high standards for quality in medical marijuana cultivation as a perfect match for their GrowBLOX™ cultivation technology. GrowBLOX CEO, Craig Ellins, said, "In an effort to safeguard Florida's medical marijuana patients, Florida's legislators have crafted some of the country's most stringent quality standards when it comes to the safety and efficacy of the medical marijuana grown in their state. They want medical solutions, and that's exactly what our GrowBLOX™ does, it makes medicine."

    Florida will soon hold a vote this November where voters will be able to have their chance at being part of Florida's approval of the Florida Right to Medical Marijuana Initiative, commonly known as Amendment 2. State projections of sales already range from $138 million to $5.6 billion, with projections of tax revenue ranging from $8.3 million to $338 million based on the number of medical marijuana patients, the amount of pot they may use and the price per ounce. IN any case, the market for medical marijuana in Florida could become a strong revenue driver for GBLX if Amendment 2 passes.

    A third highlight that continues to support GrowBLOX as a market disruptor is recent press that was released Friday afternoon (7/25). GBLX announced the execution of a binding Memorandum of Understanding with LaurelCo, LLC, an Illinois limited liability company formed to pursue the acquisition of both cultivation and dispensary medical marijuana licenses in the state of Illinois thus allowing GBLX its entry into a 3rd state. Through the agreement GBLX will provide the growing chambers to Laurel in exchange for a 10% equity interest. Additionally, after the Illinois company opens "one or more dispensaries", GrowBLOX will not only begin to receive an accelerated payback of actual costs but it will also realize a 10% royalty from products created in the chambers and sold by the LaurelCo, LLC licensed entity thus immediately achieving several revenue streams within the Illinois market.

    "With the formalization of our relationship with LaurelCo, LLC in Illinois, we are setting a standard for our growth into states in which GBLX does not have resources in place to operate a medical marijuana business by seeking out great partnerships who will operate the local business and be part of our nationwide plans."

    -Craig Ellins, CEO, GBLX

    So just on the product side, GrowBLOX has an open channel for revenue from 3 states just beginning to legalize medical marijuana. Since making these announcements, GBLX share price has increased from lows of $1 a little over a week ago, to highs this past Friday of $1.25 just before closing the week at $1.20. The marks a 20% rebound in less than 2 weeks and could be the first indication of positive sentiment beginning to flood into the market once again.

    Financing Activities

    To sustain growth operations, GBLX has brought on Lazarus Investment Partners LLLP. Not only has this firm invested over $1Million into the company but as of July, Lazarus also purchased more shares in the open market and significantly higher prices that its original investment. Recent press shows that this company "has acquired an additional 269,632 shares in the open market for an additional $322,000 investment. Lazarus, which already holds a 3,000,000 share investment at a price of $0.50, averaged up their position acquiring 199,632 shares at $1.19, 50,000 shares at $1.21, and 20,000 shares at $1.20 over a three day period from June 30, 2014, to July 2, 2014." The fact that this investment firm is cost averaging up should indicate its opinion on where it thinks GB Sciences is headed in the future. Furthermore, the most recent shareholder update reveals that GBLX closed a $5 million private placement with institutional and accredited investors. The financing included warrants which, when fully exercised, amount to a $30 million financing. These warrants expire between 3 to 5 years depending on A or B warrants thus posing little dilution risk in the near term.

    Risk Factors of GBLX

    Market risk is an obvious factor here. Volatility in a small cap marketplace poses greater risk for long-term investors as compared to high frequency traders. In the case of GBLX, it has seen consolidation over the last 60 days going from a high price of $3.49 to a low of $1. I believe future operations of GBLX will determine the stock's to be more or less volatile. In addition to this, the company is both top-heavy in funding activities while not posting a single dollar in revenues. Obviously it is building the framework to begin generating revenues as soon as possible but in the interim, this is still a developing situation. Third, as with the marijuana market as a whole, state legislation poses probably one of the biggest risks for the company's success.

    If Florida's vote fails and Illinois does not pass its medical marijuana law, GBLX can say goodbye to the "potential market" and will only be limited to the select few medical users the current state laws allow. Finally, potential dilution also poses as higher level of risk for investors specifically. The company has obvious dealing with firms like Lazarus partners as well as other institutional investors. Should these backers decide to pull the plug so to speak, there are enough freely tradeable shares in their hands that it could potentially be disastrous to the share price. Just as an example, Lazarus Investment Partners holds a 3,000,000-share investment at a price of $0.50, a price per share far lower than the current market price. Assuming this firm is as savvy as diligence would suggest, this scenario probably wouldn't happen but it still poses a risk in the event that it does so investors should be completely aware.


    GrowBLOX as a company has been working to become a market leader within the quickly growing medical marijuana space. Through several operating agreements between the company, its subsidiaries, and partner entities, GBLX has begun to establish a presence in several of the "up and coming" medical states who all have laws up for vote as it pertains to full legalization for medical use. Though there are several key risks that investors should pay attention to when undertaking their diligence, the fact remains that GrowBLOX has a system in place not only for streamlined cultivation processes but also for building & expanding into new markets. Based on these reasons, I believe GBLX and its technology to be market disruptors and allow the company to become potential market leader if and when these new states go online for legalized medical sale by the end of 2014 and into the beginning of 2015. This groundwork is a vital piece for GBLX and any marijuana company looking to realize increased revenues in the very near term. So for GrowBLOX, being first to market has been a key strategy to build the framework for its future endeavors within the space and in conclusion, I personally think that GBLX warrants further diligence.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jul 28 2:21 PM | Link | 2 Comments
  • GBLX: Planting Flags Now To Plant Seeds Later....

    Catalyst's and revenue streams are two very important drivers in the OTC as we have discussed many times on A narrative it seems these days is just as critical as product, revenues and execution which is why I'm taking a closer look at GBLX. With four separate revenue drivers, a unique technology, an individual proprietary cannabis strains and a presence within a growing list of states, GrowBLOX Sciences, Inc. has been garnering the attention of the investment community over the last few months. Not only has GBLX seen explosive highs nearly $3.50, but the recent pullback to lows of $1 may have opened an opportunity for new investment. After watching the trading from Friday's afternoon session, a deeper look at the company and the current industry climate are the main reasons to keep an eye on this company heading into the fall.

    The company's technology has been built to set the standard for manufacturing and medical cannabis producing technology and has it positioned to become a key player in the industry. One of its major revenue drivers would be partnering with in-state growers to help them cultivate cannabis in order to that meet growing patient needs; which is why GBLX has entered into several key markets:


    GBLX became one of the "chosen 18" that were granted a special use permit licenses for medical marijuana dispensaries through its local partnership, GBS NEVADA, LLC. The Company's Fort Apache location is the only dispensary to service the needs of patients in that area, giving GBLX a major advantage in the Nevada market.


    Mid July marked GBLX's entry into the Florida market through its wholly owned subsidiary, GB Sciences Florida, LLC. The National Cannabis Industry Association estimates medical marijuana will be a $785 million industry in Florida with multiple economic opportunities. Governor Rick Scott signed a law on June 16 allowing for the limited use of a special strain of marijuana called "Charlotte's Web" to treat those suffering from epilepsy, cancer and amyotrophic lateral sclerosis (ALS), known as Lou Gehrig's disease and this is just the first step for the state. Florida will have the opportunity to enact a comprehensive, workable medical marijuana law this November by voting yes on Amendment Two. Another thing I would like to add is that I assume GBLX is two steps ahead when it comes to strains similar to Charlottes Web just as insiders and master growers are. Charlottes Web is often discussed mainly because it gained quick noteriety, but it is important to know that with regards to medicine for ailments above it is similar to the Iphone 4.


    GrowBLOX is currently involved in the application process for licensing in Illinois. As far as timing goes, GBLX has acted quickly in preparation of the potential move as state lawmakers have set final rules to allow medical marijuana in Illinois. This will open the door so to speak for patients to apply for medical marijuana ID cards by the fall and possibly apply for legal cannabis by the spring. The state intends on approving a total of 21 licenses for cultivation and 6o dispensaries by September of 2015.

    Puerto Rico

    The Company opened its subsidiary GB Sciences Puerto Rico, Inc. and is monitoring the island's pending legislation to legalize medical marijuana. The Puerto Rican Senate is currently discussing the legalization of marijuana for medical use and its cultivation and so far SB 517 has passed senate in a 14-12 vote now moving on to the House; it would decriminalize up to 14 grams of marijuana. As far as legalization of medical, Representative Carlos Vargas introduced House Bill 1362 to legalize medical marijuana and regulate its sale, possession and consumption. During the public hearings on House Bill 1362, most groups testified in favor of medical marijuana and argued similar cases as other states moving forward with a motion to legalize the medical use of the drug identifying that reform is needed to tackle drug addiction and high incarceration rates.

    With GBLX already set up in Nevada and already establishing a presence in 3 more areas positioned for some type of legalization, the company has significantly entrenched itself as a driving force within the industry as a whole. Beyond the cultivation aspect, the company has also put into place, key relationships with banking and inside investment. Lazarus Investment Partners LLLP, has acquired an additional 269,632 shares in the open market for an additional $322,000 investment. Lazarus, which already holds a 3,000,000-share investment, which actually averaged UP their position in GrowBLOX. I'm sure it's not hard to see that by averaging up, the firm believes that this is an undervalued investment under the $1.20 mark.

    Furthermore, and quite possibly even more important is a two-fold chain of events: 1. GBLX secured a letter of intent with First Security Bank of Nevada for the purpose of managing the currency and banking flow of The Company's operating facilities and 2. The House voted Wednesday (7/16) in a 236-186 win in support of making it easier for banks to do business with legal pot shops and providers of medical marijuana. This was a decision that rejected a move by Rep. John Fleming, R-La., to block the Treasury Department from implementing guidance it issued in February telling banks how to report on their dealings with marijuana-related businesses without running afoul of federal money-laundering laws. The Treasury guidance was intended to give banks confidence that they can deal with marijuana businesses in states where they're legal. For marijuana cultivation companies like GrowBLOX in connection with its LOI puts GBLX in place to immediately benefit from signed LOI moving forward with full access to banking operations as it stands today.

    Sentiment from the quickly growing millennial generation is in clear support for full legalization. Americans age 18 to 29 oppose the federal prohibition of marijuana, according to national polling data compiled by the Reason Foundation. In addition to this, of those polled, only 14 percent said that someone who consumes marijuana should go to jail. So as more states continue to move toward some form of legalization not only has GBLX positioned itself ahead of these motions through subsidiaries and partnerships, but it has also been incredibly active in providing the necessary quality that many medical programs are looking for.

    Although GBLX has gone through a consolidation over the past week, it looks like interest has built once again following announcements from Capitol Hill. The companies continued growth in additional markets like Illinois and Florida should attract attention & volume, as such this is going to be a stock that I will be watching very closely; especially after the late afternoon activity from Friday. As always do your own DD and invest with caution as the magic OTC ATM is many times "out of order" in the summer months for the foolish investor...

    The Wolf

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jul 21 2:35 AM | Link | 4 Comments
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