Marijuana-related businesses (MRBs) are having a rough time. Not financially, since business is doing well. More and more US states legalize marijuana. However, they can’t deposit their income in banks. Due to the current marijuana laws, no major bank will take on MRBs as clients. In other words, It makes MRBs unbanked.
On the other hand, Brett Harrison, President of the FTX crypto exchange, made a statement. They are considering a partnership with Cresco Labs. This company embeds itself in the cannabis industry. For example, they distribute and cultivate cannabis products. We will show you why this cooperation can benefit both the crypto and marijuana fields.
2/ Though cannabis is legal in IL (@FTX_Official's US HQ) and many other states, marijuana-related businesses (MRBs) are effectively underbanked. This is because:
— Brett Harrison (@Brett_FTXUS) March 18, 2022
What Are the Advantages for MRBs to Use Crypto?
Financial institutions consider MRBs as high-risk. In a similar vein like casinos or firearms retailers. As a result, banks won’t touch any money raised from cannabis-based firms. In addition, MRBs don’t have access to debit or credit cards, point of sale banking systems, or ACH. So, this pretty much leaves them with only one solution. That is, to accept and hold cash.
As a result, these companies are vulnerable. Consequently, violent robberies are becoming a daily threat. Furthermore, the police seem to let this happen and don’t offer any protection.
However, crypto can solve many of these problems. Crypto exchanges like FTX can offer point of sales payment options. These services also offer lower fees compared to banks. The MRBs can use stablecoins for instant settlement. This eliminates the cash issue. Furthermore, it’s less volatile compared to other cryptocurrencies.
Most importantly, these products follow rules and regulations. Moreover, the MRBs meet all crypto anti-money laundering policies. In other words, AML and cybersecurity provided by CEXs. A win-win situation.
What Is Currently Available in the Crypto World For Marijuana Firms?
There are already some cannabis-related projects floating around in the crypto space. Here’s a selection of what currently is available.
Cresco Labs is one of the bigger players in the US cannabis industry. Currently, they operate in no less than 10 US states. They have 21 production facilities with 51 retail licenses. Can you imagine if a firm of this size needs to hold all its finances in cash?
Source: Cresco Labs
PosaBit offers point-of-sale payment solutions for the cannabis business. Moreover, it’s all based on blockchain technology. Most importantly, they meet all the various US states regulations as well.
Cannumo, this platform delivers a rich experience. For anyone and everyone willing to join an ever-growing cannabis industry with zero stress.
Currently, there are various cannabis-based cryptocurrencies. Here are the current top four, all launched way back in 2014.
- PotCoin (POT)
- CannabisCoin (CANN)
- DopeCoin (DOPE)
- HempCoin (THC)
The metaverse saw Higher Life CBD enter. Shop in the Cryptovoxels metaverse and have it delivered to your doorstep.
Kandy Girl, a cannabis start up sells Delta-9 THC products. They chose Decentraland as their metaverse. The 2018 Farm Bill created this loophole.
Source: Kandy Girl
To sum up, the US state-based legal cannabis industry is a growing industry. However, it is illegal to bank cannabis-related proceeds. Even if the firm is legal. On many levels, this doesn’t make sense.
Whilst the cannabis industry waits for regulation, crypto can make a difference. Crypto payment options make this business safer and, in a way, more regulated. This seems to be the appropriate time for the two services to meet.
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