As previously mentioned, the U.S. federal government has yet to legalize marijuana, which means financing in the marijuana industry has been in a gigantic pickle.
Why? Because banks are afraid to even remotely “tough the plant.” As a result, businesses that tremendously “touch the plant” have been forced to stash mountains of cash in private places.
In particular, Veronica Carpio, head of Grow Hemp Colorado and one of the first dispensary owners in Colorado, had her business account frozen by Paypal for selling hemp products…that she’s been selling for years.
Caprio said, “I had my PayPal account for many years for selling my hemp products and then they just decided to red flag…everything got frozen—Amazon, Etsy,” according to Vice News.
That’s right. Banks are scared. Banks are very scared. And marijuana business owners? Also scared.
You see, having a large amount of cash sitting around is a bad idea. not only is it costly for business and inconvenient for both the owner and customer, it also encourages money laundering and makes businesses such as dispensaries an easy target for thieves. So what’s the solution?
One financing solution provider that Caprio turned to was Blockchain Bitcoin, a cryptocurrency (i.e. digital currency) and payment system that is created and held electronically. Using Bitcoin, Caprio was able to successfully create a Bitcoin network of hemp business owners like herself, hemp farmers, and other companies buying seeds.
What’s great about Bitcoin is that its blockchain technology allows peer-to-peer (P2P) transactions without the need for an intermediary, such as a bank. This means that it is independent of any government or bank, and does not carry high fees that credit card companies charge. And since Bitcoin has no central authority, there is no immediate way for government interference with the processing of transactions.
While Bitcoin sounds like our only hope, industry experts have also pointed out its low adoption rate, volatile currency value, and difficulty for the average person to understand how to securely purchase, store, and use their Bitcoin.
The verdict? The verdict is yours to make. Research Bitcoin, look at success stories, reviews on forums, and talk to other business people. However, I should probably mention that Washing state is looking to ban Bitcoin at marijuana stores…. fingers crossed!
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