In 2010, the first known commercial transaction using bitcoin occurred when programmer Laszlo Hanyecz bought two Papa John’s pizzas for 10,000 bitcoins.

Two years later, Colorado and Washington became the first two states to legalize recreational marijuana use.

Meanwhile, the Bitcoin Foundation was established in September 2012 to promote the development and popularization of Bitcoin.

In December 2017, Bitcoin was valued at nearly $20,000.

Just a few months later, Canada Officially legalize recreational marijuana nationwide. It’s easy to see how the success timelines of cannabis and cryptocurrencies have paralleled.

People working in both areas tend to be early adopters who can adapt quickly to a changing regulatory environment.

Here, we’ll break down what you need to know about cannabis and cryptocurrencies, from cannabis coins to buying and selling products using cryptocurrencies.

A couple in financial heaven

At press time, it was unclear when the Security Act, which would allow federal banks to safely work with cannabis companies, would be passed.

Until then, due to regulations, the traditional banking system will continue to create huge barriers for cannabis. As a result, many pharmacies are forced to use only cash.

Lorenzo Nourafchan, CEO north star Financial Consulting Group is an accounting firm specializing in the cannabis, technology and entertainment industries. Benzinga Cannabis customers pay 1-2% cash deposits and pickup fees, which increase when a business conducts multi-million dollar transactions.

Not to mention the risk of theft when running a cash-only business. In a 2019 NPR article titled “Cash Bags, Armed Guards, and Vigilant Banks: The Edgy Life of a Cannabis CFO,” Tom DiGiovanni discusses the security measures he must take to protect his company Cooperative millions of dollars in cash, including armed guards and unmarked armored vehicles.

Essentially, leveraging cryptocurrencies can bring benefits to companies, such as blockchain Transparency and security, the ability to transact online, and a formal banking alternative free of regulatory scrutiny.

For many companies, cryptocurrencies enable them to conduct safe and convenient transactions. Cryptocurrencies have always been the solution to banking problems.

marijuana coins

Some people think that cryptocurrencies and cannabis go so well together that they have developed cannabis-specific cryptocurrencies.One of the first cryptocurrencies to be used for cannabis industry It is PotCoin.

It was launched in January 2014 to address the banking issue in question. Its creators wanted to capitalize on the legalization of marijuana in Colorado and even installed a PotCoin ATM at a dispensary in the state.

However, PotCoin didn’t become the currency until June 2017, when a video of former NBA star Dennis Rodman wearing a “potcoin.com” shirt circulated on the Internet.

Its value soared 76% in just one day. In May 2021, the value of PotCoin is hovering between $0.01 and $0.02.

The same year PotCoin was launched, several other tokens went public, including CannabisCoin, DopeCoin, and HempCoin. However, until cryptocurrencies become less volatile and more regulated, it is unclear what role these tokens will play in the cannabis industry. The next time you visit your local pharmacy, though, it might be worth keeping an eye out for a cryptocurrency ATM.

but……

Cryptocurrencies, however, are not the knights in digital armor to save the cannabis industry. Every seemingly simple solution presents several problems. First and foremost, the volatility of cryptocurrencies is no secret. In the first half of 2021 alone, Bitcoin fell to the low $30,000s and surged above $60,000. It’s so finicky about its price that a simple tweet from Elon Musk could have a big impact on it.

Also, there are possible tax issues. One of the appeals of cryptocurrency is that it is an appreciating asset. For example, if someone buys a product with $100 in bitcoin, it could appreciate (or depreciate) quickly. If it does appreciate and becomes $120, that could trigger a capital gains tax.

It’s not yet a foolproof system. Because both industries are so new, many things are still unknown. However, those who are successful in the cannabis space may be used to navigating uncharted territory and need to pivot, two important skills that apply to cryptocurrencies as well. ?

Editor’s Note: As the world of cryptocurrencies and cannabis banking continues to change,
The information provided in this article may
Changes have occurred since publication. as always,
Buyer beware.