Cannabis is a lucrative industry, so lucrative that it is set to hit $24.5 billion by 2021. In fact, nine states in the US have legalized marijuana for recreational use while twenty-two states have legalized marijuana for medical use.
In this rapidly growing industry, one would think banks would be lining up to get in on the business. However, due to the fact that cannabis is still illegal federally many banks won’t take the cash it brings in. This causes a major strain on dispensaries and businesses that cannot get a business bank account or even apply for business credit cards. These small businesses are also forced to pay penalties due to paying their taxes in cash.
Security is another reason to think about. Dealing with cash only transactions could put dispensaries and small business owners in potential danger. Being a cash-only business leaves the door open for accounting fraud or record-keeping errors. To an industry that is already under a microscope and an administration eagerly waiting for a reason to get rid of recreational use, these business owners need to be careful.
Cryptocurrency would almost seem like a perfect match to the cannabis industry, solving so easily the many issues faced by these businesses. In fact, many cannabis-focused coins are showing they have a real solution.
Some cannabis businesses and dispensaries feel like accepting cryptocurrency will bring unwanted attention, others would love to see the two join together. The laws are not black and white, they are still very much grey when it comes to how to make these transactions work while using cryptocurrency.
Recently in Washington State, lawmakers have granted marijuana businesses the ability to accept cryptocurrency transactions. POSaBIT, a Seattle based company helps many of these businesses make that possible.
Using POSaBIT the consumer is able to buy Bitcoin/Litecoin on the spot and then make their purchase from the retailer. This is helpful to the consumer that does not normally invest in cryptocurrency since all of this is completed seamlessly within minutes. The customer does not need to download any apps nor personal verifications need to be made while an account is set up.
Altcoin Buzz spoke with three Washington-based marijuana retail shops. Although they wish to keep the name of their stores anonymous, they were willing to give their feedback on accepting cryptocurrency transactions.
One retail owner said: “We accept Bitcoin. I’ve been invested in it since 2015 so for me personally I like being able to say I accept it. Bitcoin is a trendy subject even for people who aren’t invested in it. Kind of gives you an edge over other stores when you accept it.” They then added: “I figured not too many people would pay in Bitcoin where it would make that much of a difference. Bitcoin goes up, awesome! Bitcoin goes down, it sucks but I don’t really lose too much.” When asked about cryptocurrency being a solution to traditional banking, the store owner said: “I would love to be able to accept Ethereum, Verge or PotCoin. Those are three of my favorites. I just don’t want to stir the pot too much. I know I can accept Bitcoin so I do. No one wants to mess with financial stuff and when you throw cryptocurrency into the mix it gets a little confusing.”
Another retail store owner told Altcoin Buzz: “I started to accept Bitcoin because I like to trade and invest in all different tokens. We’re cash only and it’s a little annoying. People that come into the shop and see the sign usually ask me what Bitcoin is or go into a story about how they know a guy, who bought a Lambo and moved to Fiji because they bought like 10,000 of them years back. The small amount that I do receive in Bitcoin transactions, I end up moving them over to PotCoin or HempCoin. This helps me keep track of the payments easily and I get to put it in two coins that I support.”
The third retail shop owner, who co-owns a store with his son had this to say about doing transactions in cryptocurrency: “I haven’t a clue what it is when people want to pay me in this stuff! My son says we should take it and he likes it. When people ask me about the ‘Fitbit’ coin [Bitcoin] or whatever it is, I have them deal with my son. I may need to get enlightened but it seems risky.”
Although Bitcoin seemingly is the coin of choice for many store owners, there is still much attraction with investors to several cannabis-focused altcoins. The long-term holding of these coins could turn out to have great investment potential in the future.
What are some of the more well-known cannabis-focused altcoins?
PotCoin (POT) is one of the bigger names in cannabis-focused crypto. Released in 2014 with the aim to become the standard payment in legal cannabis transactions. Current Market Cap: $27,222,555 USD
HempCoin (THC) is one of the original 30 cannabis-focused coins released in 2014. What makes HempCoin different is it hopes to be adopted by the farming and agricultural industry. HempCoin holds their focus on the freedom to use Hemp more than the recreational use of marijuana. Current Market Cap: $24,826,250
CannabisCoin (CANN) Much like PotCoin, CannabisCoin focuses on making legal payments easier for transactions being made in dispensaries and retail stores. Current Market Cap: $4,585,987
It’s hard to say what really is in store for investing in these cannabis-focused coins. It seems the crypto-community is trying really hard to break into this industry and offering real solutions.
Education of blockchain technology and crypto investments seem to be another missing piece to the puzzle. Most people agree that this is a great idea and still, the cannabis industry remains hesitant to carry out crypto transactions day to day.
While the future looks bright for long-term holds, it’s too soon to say if this controversial product is ready for a controversial solution.