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NEW YORK (MainStreet) — First Security Bank of Nevada has opened a bank account for a marijuana dispensary and will begin transacting once licensed by the state.

"We are the first marijuana company to have a federally insured bank that will accept our deposits and clear our patient's credit cards," said GrowBLOX CEO Craig Ellins. GrowBLOX Sciences through its subsidiary GB Sciences Nevada received a letter of intent signed by Banker John G. Sullivan.

"It's the bank that will divide the money into percentage for taxes and the rest into our corporate account just like with casinos where a third party counts the money," Ellins told MainStreet.

Federal money laundering rules require dispensary staff not to touch money from marijuana sales.

"We have an armored car company that will pick up money from our ATM-like machines at our dispensary," Ellins said.

Like the C4EverSystems cash management kiosk, GrowBLOX will use its proprietary system created by a combination of companies that include MJ Freeway and BlueLine Security Services.

"I would love to do business with GrowBLOX," said Mark Goldfogel, CEO of C4EverSystems. "I've tried to call Craig and work something out but have not heard back from him."

First Security Bank of Nevada's letter to GrowBLOX was signed June 10, which was about a month prior to the House of Representatives vote that now prevents the use of government funds to penalize banks that provide services to legal marijuana businesses.

Marijuana entrepreneurs, like Goldfogel and Ellins, are rejoicing.

"My biggest challenge has been convincing banks that if they let us validate the cash, the government will not prosecute them so this development makes it easier to sell our services to banks," Goldfogel told MainStreet.

GrowBLOX has applied and received license to sell in Nevada as well as two special use permits.

In addition to developing its own dispensary kiosk, GrowBLOX combines agriculture with biotech capabilities to cultivate consistent strains of cannabis.

"Most dispensaries are growing for volume, but it's not medicine when it has mold, mildew and pesticide on the flower," said Ellins. "Growing is supposed to be done in a controlled room not bumping up against other plants. If the FDA required testing for pesticides, 90% of grow rooms would be shut down. We grow natural."

Unlike Gaia's grow facility in Denver on 39th and Holly Street, GrowBLOX only grows two plants in one module so that water doesn't go from one chamber to another.

"If contamination occurs it doesn't spread because it only happens in one area and we only grow our plants to six feet," Ellins said.

But there is competition on the horizon.

"We recently received a special use permit for cultivation and production from Clark County but not for a dispensary," said Derek Peterson, president of Terra Tech Corp (TRTC), a penny stock. "We are also applying for a dispensary license this week in the City of Las Vegas."

Regardless of licensing status, not all investors are convinced of the legitimacy of cannabis penny stocks, ancillary or not. GBLX is also a penny stock trading at about $1.30 a share.

"I don't know what market share cannabis penny stocks are competing for," said Christian Groh, founder of Privateer Holdings, a private equity firm with a focus on the cannabis space. "There's not a lot of market share out there and a lot of it is smoke and mirrors about what the potential market share can be. Today there's no value in most of these pink sheet companies."

Yet and still, Ellins has a long term vision. He aims to sell what's called ethical, medical-grade marijuana.

"We launched GrowBLOX because current cultivation mechanisms are not going to work for pharmaceuticals or nutraceutical grows," Ellins said. "Harmful chemicals in pesticides and herbicides do not make good medicine."

Ellins may be on to something. The adoption of cannabis-based medications and products could very well be the future of the pharmaceutical industry.

--Written by Juliette Fairley for MainStreet