Despite growing pressure for legalization across the country, cannabis banks remain stymied. Conventional banks backed by the Federal Reserve continue to close their doors to state-licensed marijuana businesses that don’t want to touch past money that is still illegal at the federal level.
In contrast, the troubled cannabis business continues to face the high risks associated with all cash operations. They are still unable to obtain traditional bank loans to grow their business.
Small credit unions have sprung up, lagging on long waiting lists, but now that the Bank Secrecy Act has been removed from Congress’ annual defense spending bill, all hope has returned and overall progress has faded. But a potential solution has re-entered the chat: blockchain technology and cryptocurrency.
Many see the promise of decentralized finance when it comes to the cannabis industry’s limited access to financial services. By using cryptocurrencies, these highly regulated businesses can benefit from the transparency and security of blockchain, not to mention the ability to transact online. (Online payment processors refuse or add exorbitant fees even for CBD/Cannabis businesses that use their services.)
Some clinics try to accept popular currencies such as Bitcoin, Litecoin or Bitcoin Cash for cannabis transactions in legal countries. All People Remedy locations in California accept cryptocurrency payments. However, is that what consumers are demanding at pharmacies around the world?
Every day, cannabis companies, from start to finish in the supply chain, enter data into multiple databases, tracking systems and laboratory records. Safety requirements are the most stringent for high-value retail establishments. Pesticide regulations and testing are of a higher standard than anything sold at local farmers’ markets. Despite all this, licensed operators are constantly trying to legitimize themselves to merit the protection and support of state resources, just like any other business.
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