Marijuana businesses have been facing a very difficult situation since their legalization. While 29 states allow for the sale of medical marijuana and 8 states have legalized medical marijuana, the plant remains illegal on a federal level. It is classified as a Schedule I drug which is the highest risk drug category and calls for the strictest laws when it comes to its legal status. This makes it impossible for financial institutions to do business with the marijuana industry in a way that is risk free. Without the use of financial institutions, marijuana businesses have been forced to operate only using cash which heightens the risk of robbery and other potential issues.
The Benefits of Using Bitcoin
This is where the world of digital money comes in. Bitcoin is a digital currency that can be used in the same way as money. Companies such as POSaBIT and SinglePoint Inc. have developed financial technology that allows dispensaries to use Bitcoin, making it possible for consumers to buy their weed using their bank cards. It gives dispensaries a place to store their money in digital form, making it safer from robbery than having it all sitting around in cash. Given that legal marijuana was a $6 billion dollar industry last year and is predicted by Cowen & Co. to be a $50 billion industry by 2026, this definitely offers retailers a better solution.
Peace of Mind Through Digital Currency
“There’s no industry — whether it’s the production and sale of cannabis or the production and sale of a cup of coffee — that can operate safely, transparently or effectively without access to banks or other financial institutions and traditional services,” said Jon Baugher, co-founder of POSaBIT. “That’s where we thought we could leverage the use of digital currency.” POSaBIT currently serves 30 dispensaries in Washington, where recreational marijuana is a legal thriving industry. The technology allows Washington businesses to operate with more peace of mind.
Overcoming an Uncertain Reputation
Not everyone is familiar or comfortable using Bitcoin as of yet. The virtual currency also has associations with being used to buy drugs on the “dark web” which doesn’t help to set people’s mind at ease. There are currently several bills that seek to end prohibition in some way and some that simply seek to make it impossible for the federal government to interfere with marijuana businesses in states where it is legal. If any of these bills pass, it will make it possible for banks to participate in the industry.
There has been a lot of opposition to marijuana from the Trump administration, in particular from the current Attorney General Jeff Sessions, who has been a long time, outspoken marijuana prohibitionist. Sessions has made statements that called marijuana only slightly better than heroin and said that “good people don’t use marijuana.” He is now asking members of Congress to allow him to use federal funding to go after the medical marijuana industry, regardless of whether it is legal in those states. While his presence continues to put the marijuana industry on shaky ground, Bitcoin could offer a solution for everyone.