Cannabis firms have fought regulations and misconceptions for quite a long time as they have made attempts to inform the public on the medical benefits of the plant. In the recent couple of years, cannabis companies have started recording a surge in interest, as evidenced by their monthly record sales. Investors in Wall Street project that the industry will attain a valuation of $75 billion by the end of 2030.
Almost coincidentally, cryptos have also been enjoying a surge in popularity, with values of top cryptocurrencies such as bitcoin and Ethereum hitting record levels. Toward the end of 2017, the total market capitalization of the cryptocurrency industry hit $600 billion.
Apart from the growth prospects of the two industries, both experience legal uncertainty, high-risk environments and tighter government regulations. This makes cannabis and cryptos perfect partners.
How Blockchain is Facilitating Cannabis Trade
The blockchain technology that is the backbone of crypto transactions can help the cannabis industry to secure its exchange transactions. The cannabis trade has been criticized for channeling funds into the black market. With the blockchain, these worries can be put to rest and loopholes for fraud and funds leakages into the underworld sealed.
When this happens, both the crypto and cannabis industries can legitimize their activities in today’s dynamic modern economy. For instance, in the United States, only Alaska, Washington, Oregon, California, Nevada, Colorado, Vermont, Maine and Massachusetts have legalized marijuana for both recreation and medical use. The rest of the states have legalized the drug only for medical use.
Using cryptocurrency to facilitate transactions in the cannabis market is hugely important. This is because it widens the playing field and promotes inclusion to other groups all around the globe that previously were secluded from the trade. Since cannabis is still a Schedule I drug together with methamphetamine and heroin, players in this industry are barred from using bank accounts.
Any attempts by the banking system to facilitate cannabis payments could lead to dire legal consequences, including charges for money laundering. The exclusion of the banking system also renders the use of credit and debit cards impossible. Operations for cannabis businesses in the U.S. are cash-based.
Legitimizing the Cannabis Industry through Crypto
Cryptocurrency companies have come up to support trading activities and other development initiatives within the cannabis industry. One of the companies offering blockchain technology solutions customized for the cannabis industry is Pacific Software Inc. (OTC: PFSF). The company seeks to improve the compliance, transparency and efficiency of cannabis supply in states where it has been legalized.
Cannabis companies and traders who want to use the company’s Hyperledger blockchain applications are required to pay transaction fees, cash, loyalties and other forms of payment depending on the nature of the transactions.
GreenBox POS, LLC (OTC: GRBX) has also built customized payment solutions for different industries, including cannabis. The point of sale system is fully integrated, easy to use and intuitive.
By connecting buyers and sellers, crypto firms are creating a legitimate, centralized online meeting place where cannabis enthusiasts can share information and engage with one another. Usually, participants are rewarded with crypto coins that can be exchanged for goods and services or converted to fiat currency.
Any effort to boost accountability and transparency in the logistics and supply chain of cannabis is therefore welcome. The adoption of blockchain technology is yielding positive effects by fighting the social stigma around the sale and use of marijuana. As this positive ecosystem expands, buyers and sellers will feel safe, just like any other participants in a market platform.
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