There are two markets that have been absolutely booming above the rest lately: cryptocurrencies and the cannabis industry.
This year, we’ve seen Bitcoin achieve over 900% in growth, while Ethereum has shot up an astonishing 5,700%. According to CoinMarketCap, there are currently 1,326 different kinds of cryptocurrencies and growing. It seems everyone is scrambling to invest in cryptocurrencies these days.
Now let’s look at the cannabis industry. In North America, marijuana sales totaled almost $7 billion in 2016, with a 30% growth rate. To put that in perspective, cable television grew 19% at its peak in the 90s, while broadband internet grew 29% in the 2000s.
And cannabis industry growth is not set to slow down any time soon. By 2021, North American sales are projected to top $20.2 billion.
Yet, even though legal cannabis businesses are raking in all this money, banks are refusing to work with these businesses since marijuana is still illegal under federal US law. This means that practically all of these billions of dollars that have been legally made from cannabis cannot be protected in a bank account.
They are sitting around in piles of cold hard cash which is highly inconvenient, not to mention downright dangerous, for the people running these businesses. Imagine having to pay your bills, taxes, and employees all in cash, while constantly worrying about being robbed, even though your business is legitimate and legal in your state.
Luckily, cryptocurrencies and blockchain innovations are coming to the rescue, creating solutions and aiding where centralized institutions have failed.
Let’s look at some of the creative ways these two booming industries are intersecting and working with each other.
Right now, if you wanted to go to a legal cannabis dispensary in the US, you wouldn’t be allowed to pay with your debit or credit card. But POSaBIT is a company that is helping get around this inconvenient issue. This financial technology company based in Seattle, Washington has created an easy way for consumers to pay with their cards using digital currency instead of dollars.
All the store has to do is put in a POSaBIT kiosk next to the register. Customers can then use their debit or credit card to buy Bitcoin through this kiosk—they just have to pay a $2 transaction fee. The customer will now hold the exact amount of Bitcoin equal to the price of the goods they wish to purchase. Then they simply send the cryptocurrency to the store, and POSaBIT will send the dollar amount to the business’s bank account.
This is a win-win for everyone, since it helps merchants reduce cash transactions which provides a safer environment for their employees, while also allowing customers to make purchases with their cards instead of cash in a simple and convenient way.
PotCoin is the first cryptocurrency created specifically to help the legal cannabis industry facilitate transactions. Their goal is to be the banking system and infrastructure this multi-billion dollar industry so desperately needs.
PotCoins can be transferred directly from person to person via the internet, without going through a bank. This, like POSaBIT, removes the need for cash transactions. With PotCoin, legal cannabis businesses can keep their profits in an ultra-secure manner on the blockchain instead of having to keep piles of cash lying around.
PotCoin helps businesses and consumers easily make transactions with one another as well. For example, a medical marijuana dispensary could buy from a grower and instantly pay them in PotCoin.
On top of that, medical patients that choose to buy their ganja using PotCoin receive rewards for using it. As long as they verify their prescription, PotCoin will send them some free currency for each purchase made.
Paragon is a company that has decided to tackle the industry-wide problems faced by the cannabis industry. Their goal is to legitimize and provide transparency as well as regulatory solutions. This will improve the reputation of the industry and help further legitimize it, since a lot of people still don’t take this booming industry seriously yet.
The creators of Paragon realized blockchain technology offers an ideal solution. Since the blockchain holds an immutable ledger and assured contracts, it can easily accommodate the recording and storing of all product life cycle events, verify patient identification, assure payments, and more.
Paragon is the very first organization dedicated to leveraging smart contracts built on the blockchain to create and foster a community dedicated to the worldwide legalization and systematization of cannabis.
They explain in their whitepaper how they plan to use the blockchain to connect all facets of the cannabis industry from start to finish.
Paragon is even working on setting up cooperative workspaces where members can work, meet, socialize, and create. They’re doing this specifically for cannabis-based startups that struggle to find suitable locations to house their businesses, since a lot of places don’t feel comfortable giving a lease to cannabis businesses. They will only accept payment in PRG, their cryptocurrency.
What Does the Future Hold?
It seems only natural that the legal cannabis industry and the cryptocurrency world are merging and working together. They’re both relatively new industries that are gaining more and more attention from investors and the public at large, causing them to explode in growth.
The future certainly looks bright for both of these hot markets. It will be fascinating to see what new innovations will come up next. It’s clear that the blockchain is transforming the world in many aspects, and the cannabis industry is another area that’s greatly benefiting from this new technology.