Are cryptocurrencies the future of the cannabis industry? All signs are pointing to yes!
The cannabis industry has a unique problem: cannabusinesses are making money hand over fist, but they are still having financial issues. This is because of the legal status of cannabis in the US. Cannabis is legal in some form in 29 states and in DC, but is still a Schedule I drug under federal law. As such, businesses that deal in cannabis such as dispensaries, cannot do business with banks, because banks are federal institutions. As a result, dispensaries have to deal exclusively in cash. Customers pay for their goods in cash, employees are paid in cash, even taxes are paid in cash.
This makes things unreasonably complicated (not to mention dangerous) for all involved. Customers are required to carry large amounts of cash, which is inconvenient in an age where you can buy anything by whipping out your debit card. Dispensaries are often targeted for robberies. Owners of cannabusinesses cannot make the same deductions as other businesses and end up paying more in taxes.
It doesn’t seem like cannabis will be legalized in the United States anytime soon. Some are wondering if cryptocurrencies may be the solution to the cannabis industry’s financial woes. If you are unfamiliar with the way cryptocurrencies such as Bitcoin work, allow me to give you a really quick and basic rundown on the subject.
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What are Cryptocurrencies?
Cryptocurrencies are digital forms of currency. In the most basic terms, when you buy a form of cryptocurrency, such as Bitcoin or Eretheum, you can then use it as real currency. Depending on the exchange rate, they can be worth quite a lot. My one regret in life is that I didn’t invest in Bitcoin when it was brand new. The biggest benefit of cryptocurrency is that it is decentralized. This is the opposite of the federal banking system, which is not. Since cryptocurrencies are decentralized, they are not subjected to the same laws as our federal banks. This is where cannabis comes in.
Are Cryptocurrencies the Answer?
There is currently no law on the books preventing people from using cryptocurrencies like Bitcoin to purchase cannabis, at least not yet. There is some risk; if people started doing this, it could elicit a response from the federal government. Despite these worries, new companies such as GreenMed are stepping forward to become the digital payment platform of choice for the cannabis industry. Dispensaries that use cryptocurrency platforms such as GreenMed will have a distinct advantage over those who don’t because they’ll be able to offer their customers the option of paying using their plastic, and who wouldn’t want that?
Cryptocurrencies allow cannabis consumers to keep their transactions secure, meaning there is no credit card statement to trace your purchases to you. You can already use cryptocurrency to purchase from international seedbanks. So, are cryptocurrencies the future of the cannabis industry? So far, all signs point to yes.
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