The cannabis industry and the cryptocurrency industries are both growing. There have been a huge number of new stories about both of these industries in recent years, as cryptocurrencies such as Bitcoin become more and more mainstream, and cannabis gets decriminalized in more parts of the US. In 35 states, it is legal to use cannabis for medical reasons.
So is there much linkup between the cannabis industry and crypto? What are the benefits of combining the two? We explore more in this article.
The cannabis industry finds itself in quite a strange situation in terms of legality and in this guide, we’re looking at how crypto might be the answer for a lot of cannabis businesses.
What is Cryptocurrency?
You may have some experience with cryptocurrency already. A cryptocurrency is a digital currency that uses cryptography so that it can’t be counterfeited. The cryptocurrencies tend to be “decentralized” and use blockchain, which makes them incredibly secure and uses a network of computers.
Cryptocurrencies are not issued by a government or central authority. The government can’t manipulate them or interfere with them.
Bitcoin is a great example. It’s the biggest of these currencies, and has grown incredibly in recent years. If you bought Bitcoin when it was new, you could be a very wealthy individual today.
Crypto has pros and cons, just like other currencies. It’s a volatile currency when it comes to the price, which can go up and down. It’s also been used quite a lot for some illegal activities. The fact it isn’t regulated closely by the government means that it has been made popular on the dark web. That doesn’t mean that it isn’t a legitimate currency, and most transactions are still totally legal.
Can Cannabis Businesses Use This Method of Payment?
Not only can cannabis businesses use this method of payment, it is recommended for a lot of the businesses due to the fact that they may otherwise struggle to take payment.
Some banks and payment providers refuse to work with the cannabis dispensaries. Due to the fact that federally, marijuana is still illegal, they see cannabis businesses as a risk and won’t issue bank accounts or payment platforms. It can be really hard to find providers in this industry, and a huge number of cannabis businesses have to deal almost exclusively in cash.
Cash payments can bring their own problems, so this means that crypto is a popular choice for the cannabis industry. It is best to use it in conjunction with other payment methods as not everybody has access to bitcoin and other cryptocurrencies. Fortunately, a lot of cannabis users, both recreational and medical, are familiar with cryptocurrency. What’s more, customers keep coming back. This means that if you start to take Bitcoin or other cryptocurrencies, customers might be willing to start to use the currencies.
Taking cash is not a problem for some businesses, but it can be a security risk and a lot of businesses find that it is almost a penalty for operating in the industry.
In the future, it may become easier to work with big banks. There is no denying the fact that the US is becoming more accepting of the cannabis industry. That doesn’t mean cryptocurrency for cannabis businesses will be redundant though. Far from it.
Did you know that there are even specific cannabis cryptocurrencies? These are relatively obscure, and probably aren’t recommended at the moment, but they could still grow. CannabisCoin, DopeCoin, HempCoin, and PotCoin are specific cryptocurrencies or “altcoins” which are aimed at the industry.
What Are the Benefits of Paying via Cryptocurrency?
There are many benefits to cryptocurrency. This is why it has grown so much in recent years and Bitcoin, as well as other cryptocurrencies, are starting to become so mainstream.
Bitcoin has very low transaction costs compared to credit cards. Paying with this kind of digital currency means you can incur less in the way of transactional costs and save money in the long run.
Crypto also allows you to pay anywhere with minimal issues. Credit cards might block some transactions if they are suspicious, but paying with crypto is extremely easy in every location, with no extra fees based on where you are. The currency is truly global.
The transaction is also immediate with cryptocurrencies such as Bitcoin. Once the transaction has been made then the money is instantly available to the recipient. This is different from other payment formats which may have a delay.
It is very likely that the cannabis industry and crypto will continue to work hand-in-hand, even as banks become more accepting of the industry and supportive of cannabis (something we predict happening soon) it is still likely that many customers and providers alike will continue to support cryptocurrencies.