Marijuana Entrepreneurs See Bitcoin as Banking Answer
Legal marijuana companies are turning to Bitcoin, the world’s most popular digital currency, in an effort to get rid of all its cash, as banks stay on the sidelines.
The inability to access traditional financial institutions is 1 of the marijuana industry’s biggest impediments.
Legal cannabis was a $6-B industry last year and is expected to grow to $50-B in Y 2026, according to industry estimates. But because marijuana is illegal under federal law, big banks and credit-card companies steer clear.
That has forced most merchants to accept cash only, a logistical headache and constant security threat.
Enter Bitcoin, the cryptocurrency that consists of digital coins “mined” by computers solving increasingly complex math problems.
Now, 2 financial-technology startups, POSaBIT and SinglePoint Inc., use the cryptocurrency as an intermediate step that lets legal marijuana buyers use their bank-issued credit cards to buy marijuana.
Fact: There’s no industry that can operate safely, transparently or effectively without access to banks or other financial institutions and traditional services.
Marijuana is legal for both recreational and medical use in California, Oregon, Washington, Nevada, Colorado, Massachusetts, Maine, Alaska and the District of Columbia, and approved in 20 additional states for medical purposes only.
While the early Bitcoin adopters are claiming success, the currency still has a long way to go before it gains wide acceptance. For many in the legal marijuana industry, the virtual currency’s association with illicit drug dealing on the dark web is a drawback.
Others have a hard time grasping how a virtual currency works, at least for now.
It may only be a matter of time before marijuana dealers have an easier solution. The reluctance of banks to handle marijuana transactions will probably subside before the digital-currency solution has a chance to take off.
The banking issues are going to be solved in such time that the people in this industry are going to gravitate toward traditional banking LTN believes
Some companies say Bitcoin technology will make sense in the cannabis industry even after traditional banking becomes available.
Some others see Bitcon as a scam that they do not know or understand about. However, many establishments are beginning accepting it, but it has been described as the “Wild, Wild West.