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How crypto and NFTs are reshaping the cannabis industry

As mainstream, profitable, and technologically advanced as the cannabis industry has become in recent years, the struggle to access financial services is still one of the prevailing issues faced by business owners. It seems as though congress won’t provide any solutions on this front until they’re forced to do so via a federal legalization. But being the adaptive industry that cannabis is, crypto and NTFs are proving to be interesting legal alternatives to operating in all-cash.  

The cannabis industry is complicated enough as it is, add to the mix trying to figure out financing solutions, and it’s enough to make you almost want to give up. Luckily, cryptocurrency and NFTs are offering unique alternatives to what once seemed like a dead-end road.

Without banking access, cannabis businesses are turning to crypto

It’s relatively common knowledge that banking is a big problem in the cannabis industry. Because marijuana is still federally illegal and dealing with cannabis cash could be considered money laundering, banks are naturally reluctant about working with the industry. That means everything including loans, lines of credit, payment processing solutions, and even basic bank accounts are off limits for canna-business owners.

A bill titled the Secure and Fair Enforcement (SAFE) Banking Act, which passed the House of Representatives last year with strong bipartisan support, would have finally allowed banks and financial institutions to service the cannabis industry. Unfortunately, the bill hasn’t seen much action since the beginning of 2020.

The lack of access to financial support has forced many cannabis businesses to deal in all-cash, which is not only inconvenient, but also dangerous. Thieves are aware that dispensaries have both, a lot of cash and weed on hand, and these businesses are targeted and robbed regularly. When this happens, it can be hard to file insurance claims for stolen cash and other products when the amount stolen can’t be proven.

Additionally, everything from paying rent to managing payroll becomes highly convoluted when you’re dealing with cash, and cryptocurrency can help resolve some of these issues. Cryptocurrency is decentralized digital money that’s stored on a blockchain technology system. Because crypto transactions aren’t regulated in the same way as standard banking exchanges, and the fact that it’s impossible to physically steal cryptocurrency and difficult to hack blockchain wallets as well, it makes sense that a growing number of companies are showing interest.

Cryptocurrency can benefit cannabis businesses in the following ways:

  • Cash-free transactions: The ability to accept Bitcoin and other digital currencies in lieu of cash payments is a major benefit for cannabis businesses trying to move away from having large sums of money on hand or in their stores, homes, etc.
  • Lower fees: Regarding the very few financial service companies that are actually willing to work with cannabis, they charge astronomical fees for being some of the only players in the game. Using crypto payments allows cannabis business owners – who are already paying ridiculous amounts of money in taxes, rent, and pretty much everything else – to at least save some money on payment processing fees.
  • International transactions: For businesses that also sell merchandise, CBD products, and other items that can be shipped internationally, digital currency offers a quick and efficient way to accomplish this.
To Read The Rest Of This Article By Alexandra Hicks on CBD Testers

Published: February 02, 2022

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