Could the Cannabis Industry Find Solutions in Crypto?
There is common ground between cannabis and the crypto industries: both are new and have been unregulated, both gained a lot of attention, and both have a huge market. This may make crypto and cannabis a match made in heaven, leading to a combined industry with exorbitant revenue potential.
Ironically, the United States of America doesn’t know what to do with either of them.
The crypto/cannabis connection was discussed by finance magnates as the cannabis industry is feeling a lot of heat. On the other hand, blockchain is believed to have what it takes to shape safe monetary ecosystems that could take the pressure off the cannabis industry.
Cannabis is forbidden under Federal law in the United States and even though it’s adopting the “one state at a time” approach, it’s facing barricaded financial services as it is still considered a prohibited material with which banks don’t want to get involved, which has led to legal pot dealers engaging in a cash only business similar to their criminal cousins.
There happens to be a unanimous agreement that this industry is following in the footsteps of Canada, and it will only be the beginning.
The United States Federal law is about to change to allow IPOs for cannabis firms, which would take the market to a whole new level. As a consequence, a lot of issues arise as firms are only allowed to have cash transactions due to banking restrictions, which is creating a few conundrums. One issue is the concept of taxation, and the second is the sway between wanting to secure that money, and living under the pressure that at a moment’s notice, the rug could be yanked from beneath their feet. It’s a shaky ground to build a business upon.
Banking deprivation also equals the inability to request loans to pay for the legitimate dispensary's up-front costs. Compared to having a contained low-key business, the hurdles for pursuing the ordinary procedures of banking systems are very frustrating.
Crypto and Crowdfunding
The United States of America has prices for opening a legalized dispensary for cannabis ranging from $200,000 to $700,000, as stated by CT. These prices include a lot of other requirements too; such as a leasing space, fees for license, insurance, inventory, liquid money and security systems.
Private investment is the easiest way to secure money, especially for self-governing dispensaries.
Nevertheless, all innovators in the cannabis field are trying to find alternative ways, like crowdfunding, for securing funds. It’s an inevitability when their primary funders reject their requests for contributions. The JOBS Act gives them that permission and they sure know how to use it, according to the act, when they relocate to public sectors, they can get up to $50 million.
Initial Coin Offerings and Suspicious Funding
Considered as the backdoor to the institutional rejects. It’s no surprise that Initial Coin Offerings are involved with platforms related to porn and other related services with their existence dependent on alternative transactions because otherwise, reputable financial institutions will definitely look past them. Some of these platforms have their own cryptos and others use them as the main method for transactions.