Medbox Commends Colorado Legislature on Efforts to Facilitate Banking Alternative for Marijuana Industry

LOS ANGELES, May 7, 2014

State legislators in Colorado passed a bill on May 2, 2014 which could potentially grant access to the Federal Reserve's money transaction system. To date, 20 states and the District of Columbia have passed laws allowing the sale of medical and recreational marijuana, but its production, sale, and possession remain illegal under federal law. The misalignment of Federal and State laws has prevented the nations' banks from enabling dispensaries and other businesses in the legal marijuana industry to utilize the banking system. Colorado has now taken a first step towards alleviating this disparity and establishing a financial structure between the banking community and the marijuana industry.

The proposal calls for "cannibas credit co-ops" to be governed by the state's financial services commissioner in order to provide marijuana retailers a means by which to transact business and provide financial services to its members through cooperative banking. The proposal, passed on a preliminary vote, will be formally voted on this week.

Due to federal laws and the current unwillingness by banks to conduct business with dispensary owners, most transactions rely on cash payments, making the business owners targets for crime while inhibiting the state's ability to track and tax sales.

"We strongly commend the state of Colorado for paving the way for marijuana retailers to be able to transact their business through a structured financial system in the same manner as other businesses," commented Dr. Bruce Bedrick, chief executive officer of Medbox, Inc. "We are pleased to see the legislators take such a progressive step towards supporting dispensary operators, an industry that Medbox directly serves. The financial structure being established in Colorado dovetails nicely with two of our latest initiatives, specifically our Medbox Merchant Services, Inc. and Medbox Armored Transport, Inc. subsidiaries. Medbox Merchant Services specializes in banking transactions with prepaid debit cards, convenience checks and cash depository needs for operators. Medbox Armored Transport is focused on armored car transport of cash from dispensaries to participating banks."

"As this industry continues to evolve and progress, Medbox is at the forefront of designing and delivering solutions so retailers can efficiently serve their customers in a safe environment while complying with local and federal regulations," stated Dr. Bedrick. "A financially sound and solid banking infrastructure is yet another step towards legitimizing the marijuana industry."

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