Cryptocurrencies and cannabis seem to share a lot of things in common; for starters, both face many challenges from financial, regulatory, and even political. Interestingly, their bases seem to overlap as both industries are quite popular with younger demographics. These shared traits aside, crypto and cannabis boast complementary business models that can bolster each other as adoption in the two industries grows.
Challenges Facing the Crypto And Cannabis Industry
Despite being around for over ten years, cryptocurrencies are still seen as fringe financial tools by the mainstream media, financial institutions, and the public. Compared to existing government-issued currencies, cryptos are quite new, and they don’t enjoy the day to day use everywhere except in a few tech pro locations in Europe and some few major cities in the U.S. and Asia. It’s safe to say they are quite unfamiliar with the masses.
Part of it has to do with the fact that the technology is still in development. Transaction speeds are still a problem, and this presents issues for merchants accepting them. Add volatility which they are rife in, and you have another reason why few businesses and institutions are willing to handle them.
Regulation is also a major stumbling block, and in 2020 governments around the globe are still trying to figure out how to regulate virtual currencies.
On the other side, Cannabis being a new industry faces its own share of problems. In a country like the U.S., even though several states have legalized the use of marijuana under certain conditions, it’s not legal on the federal level.
That said, few financial institutions are willing to offer loans or credit to cannabis-based enterprises since it’s still a new industry and the sticky legal issues brought about by differing state rights.
The fact that marijuana isn’t legal on the federal level in a country like the U.S. doesn’t help since banks are expected by the law to be federally insured. This means the cannabis industry must operate on a cash-only basis, much like the crypto industry, which raises the ‘unbanked’ issue.
The Potential For Both Industries To Collaborate
The ‘unbanked’ situation creates potential for both industries to come together and help each other. So far, crypto has proved it offers a viable alternative for those unable or unwilling to secure traditional banking accounts. As Nakamoto intended, the blockchain contains all the information and trust needed to bypass third-party intermediaries like banks.
The marijuana industry can rely on cryptocurrencies to act as their store of value and transaction medium, which is easier to handle and more secure than cash. In exchange, the crypto industry gets a ready-made group of adopters to display as a real-world test case.
So, if crypto works well for securely handling and tracking cannabis transactions, why will it not work well for other industries like flight or auto or even grocery shopping?
The blockchain can help assure quality within the cannabis industry. Customers can rely on information stored on the blockchain since data contained on the blocks is immutable and can’t be altered, thus improving trust. Users can access all the information they need on plants from the cultivation, production, processing, supply up to their delivery. This assurance of quality is crucial as it simplifies the decision to buy for customers.
Also, the blockchain can be used to limit the abuse of cannabis. It can play a crucial role in tracking and monitoring the sales of marijuana when it comes to personal use. Thereby helping find a middle ground for use and potential overuse.
So far, we see such synergy through the development of platforms like JuicyFields.io, a company that connects cannabis buyers, sellers, growers, activists, and enthusiasts across the world on one of the first legal Crowdgrowing platforms. Crowd growing leverages the power of partnerships in cannabis cultivation and distribution by helping everyday people with interest in the cannabis growing industry partner with cannabis cultivators.
Therefore, JuicyFields.io helps people grow cannabis remotely regardless of whether it’s legal or not in the user’s home country through an innovative non-plant touching system. Incredibly, the platform accepts cryptocurrencies like Bitcoin and Ethereum in addition to traditional fiat currencies.
Another example is CannaSOS is a social network that provides comprehensive information about cannabis, its benefits, applications, uses, and, most importantly, the effective ways of use to avoid overdosing. On the platform, users can mingle and build connections. Search and review cannabis strains and share marijuana-related information. They pay with PerksCoins for contributors, these coins can be converted to fiat.
Budbo is a blockchain startup that acts as a one-stop solution for all needs and queries related to marijuana. The platform offers a smart mobile phone interface where users can find and order cannabis strains and products. It also tracks how the product moves from the farmer to the manufacturer to the end-user, and customers can see the whole chain. Additionally, Budbo has an integrated wallet that supports a wide range of tokens and cryptocurrencies.
A Few Factors Why Crypto And Cannabis Are Promising
On top of how both industries stand to help each other, there are various reasons why one should consider investing in the crypto and cannabis industry.
For example, the cannabis industry offers investors a chance to participate in one of the fastest-growing sectors. According to the research, the global cannabis market is expected to be worth around $73.6 billion by the year 2027, which is incredible, considering it was worth only $9.1 billion in 2019.
The exponential growth is expected to be driven by the booming global medicinal cannabis market.
As for cryptocurrencies, even though the market dived just a little bit together with traditional markets due to the coronavirus pandemic, it’s nothing new within the crypto market. Matter of fact 2020 is expected to be a strong year for cryptocurrencies as Bitcoin halves and its other siblings.
The COVID-19 pandemic has also brought to attention the need for transactions that don’t involve touching physical money.
This makes a strong case for digital currencies, and when this epidemic ends, hopefully, it’s soon, we should expect to see virtual currencies gaining more prominence in our society. This could be in the shape of government-issued digital currencies or cryptocurrencies that can cater to the masses with the approval of authorities.
Despite being very new, the crypto and cannabis industry offers loads of potential for investors. Several nations have begun legalizing marijuana, and ten plus years in, the crypto industry seems to be going nowhere any time soon. For those considering putting their money on some assets, they ought to consider these two industries.