Since the time of Silk Road, dating back to 2011, marijuana and related products had been available for purchase using BTC (and now several other coins), but the process is still 100% illegal regardless of where you live. In recent years, however, several governments around the world have been evolving their stance on cannabis legalization, as well as bitcoin itself. This has resulted in some legal applications of bitcoin for the purchase of marijuana which manage to save buyers a lot of hassle they might have previously been forced to endure.
Cannabis and Crypto Laws Tremendously Varied Around the Globe
While few nations on the planet outright permit the usage of recreational marijuana, there is a growing list of countries who are reconsidering their laws and allowing cannabis for medicinal purposes. In the United States, marijuana laws are among the more uneven laws on a state-by-state basis, with some states allowing it for both recreational and medicinal purposes and others allowing it for neither. In countries like Portugal, South Africa, and most recently Canada, it is completely legal. In countries like Brazil, Mexico, and Spain, it is illegal but decriminalized, meaning at most a fine will be issued for possession, but generally laws pertaining to the matter are unenforced. However, in many other countries, like most of Africa, Asia and the Middle East, it is strictly illegal, where punishment for even possessing small amounts can result in lengthy prison sentences.
In this way, the laws concerning the consumption of cannabis worldwide are just as varied as cryptocurrency legislation, in that they are pretty far from uniform and frequently subject to revision. In locations where there is an established overlap in friendly attitudes for both cryptocurrency and cannabis, it is now possible to legally buy marijuana, its seeds and its derivative products (oils, edibles, paraphernalia, etc.) using bitcoin as well as other popular coins – a process which for the first 8 or 9 years of bitcoin’s existence had been almost totally illegal. In this article, we take a look at how two of these countries are using cryptocurrency to help ease the process of buying and selling cannabis.
Cannabis and Crypto in the United States
Recreational cannabis is currently legal in 10 states, 1 U.S. territory, and the District of Columbia, but remains illegal at federal level, where it is classified as a Schedule I narcotic, along with heroin, LSD and ecstasy. It is decriminalized in another 13 states and legal for medicinal purposes in 33 states, with several more on the verge of passing decriminalization and medical use laws in the near future.
However, all cannabis and related product vendors face the same road block due to federal-level laws: banks are not permitted to conduct business with them as they are regulated by the FDIC (Federal Deposit Insurance Corporation). Since cannabis remains illegal under U.S. federal law — and the federal government regulates all US banks and credit unions — banks in general will refuse to issue accounts to these businesses. This usually means brick-and-mortar marijuana dispensaries and other cannabis retailers must be cash-only operations, sometimes sitting on hundreds of thousands of dollars’ worth of cash at any given time. As such, they are a high-profile target for theft and robbery, which is a situation that cryptocurrency adoption is set to alleviate.
Published: March 24, 2019
Founder & Interim Editor of L.A. Cannabis News