Bitcoin has rapidly become a threat to the regular financial systems of the world due to the fact that it offers faster and more reliable payments and money transfer solutions. It is thus expected to help change many industries including the Cannabis industry.
Many industries are rapidly adopting Bitcoin and other cryptocurrencies to improve their financials. The cannabis industry is one of the industries that might benefit the most from such adoption and for a pretty good reason. Despite the fact that marijuana has been legalized in a majority of the states in the USA, the federal government still considers it as illegal. The legalization frameworks are also not as strong and as such, banks and other financial institutions are not so supportive of marijuana businesses.
Lack of financial backing and stable cash flow are a huge problem for any business and those in the cannabis industry are no exception. The fact that banks are shying off from offering banking services to marijuana businesses makes alternative financial solutions such as cryptocurrency quite attractive. The fact that digital currencies such as Bitcoin are decentralized and not controlled by any single institution means it is easier for marijuana to transact with and a better solution that will allow them to operate without any authoritative body threatening to seize accounts and shut down operations.
One of the concerns that plagued Bitcoin is that it was being used by people to purchase illegal drugs. However, the tables seem to have turned because players in the cannabis industry are now hoping that the digital currency will play a pivotal role towards the legalization of marijuana.
“That reputation is being turned around,” stated Wil Ralston, the head of a tech company called SinglePoint that is developing an app called SingleSeed.
The SingleSeed app is a digital currency payment app that can be used to purchase marijuana at dispensaries. Singlepoint and POSaBIT are the latest tech firms to tap into the opportunities provided by digital currencies and their platforms. The aim of these companies is to create payment methods that can be used at dispensaries to purchase marijuana through bitcoin.
There are more than 500 banks in the U.S that currently do not offer support to businesses in the cannabis industry. Very few banks are willing to dip their feet in such waters but even so, there are a few factors to consider especially for marijuana businesses looking to scale up. Constant cash flow is important but it may be negatively impacted by the slow and bureaucratic processes that are involved in the standard banking system. The situation is even worse when it comes to debit and credit cards because no merchant services are offered at cannabis stores.
The above limitations are just a tip of the iceberg that is on the proverbial path of the marijuana boat. The fact that cryptocurrencies are much easier to transact with presents a lot of incentives for the cannabis industry to prefer transacting using digital currencies such as bitcoin.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
Image courtesy of David Gach via Flickr
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ur welcome pic.twitter.com/e2KF57KLxb
— Elon Musk (@elonmusk) February 4, 2021
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Hong Kong, Hong Kong, 25th January, 2021, // ChainWire //
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