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: http://abc7chicago.com/health/i-team-security-a-high-priority-for-illinois-pot-business-/438115/
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 inewsnetwork.org 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: http://inewsnetwork.org/2014/12/10/marijuana-banking-armored-car-ride-along-to-denver-pot-shops/
The media exposure and recognition of Blue Line continues as Fortune.com 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: http://fortune.com/2014/11/21/ancillary-businesses-cannabis-industry/
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: http://www.cnbcprime.com/marijuana/
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.
Disclosure: The author is long BLPG.
Additional disclosure: I have a small 20,000 share position at .1875 average and might take a bigger position in 72 hours...