Can Cryptocurrency Help The Cannabis Industry Navigate Its Banking Problems?

Can Cryptocurrency Help The Cannabis Industry Navigate Its Banking Problems?

Although medical and recreational marijuana is legal in many states across the country, cannabis remains illegal under federal law and the lack of federal regulation forces the industry to operate outside the traditional financial system.

Dispensaries and other cannabis companies without access to federal banks and credit card networks are forced to accept and maintain cash on hand, creating a dangerous situation for workers.

This untenable situation has resulted in more than 80 armed robberies in Washington state alone, some of which ended in death.

Cannabis entrepreneurs are also forced to pay exorbitant bank fees that must be paid at state-licensed institutions.

Is Cryptocurrency A Possible Solution?

Cryptocurrency has long been touted as the solution to the US cannabis industry's banking problems. According to CoinDesk, the legal cannabis industry’s problems "go much deeper than a lack of access to banking." The question now is whether cryptocurrency is a possible alternative to the “legacy financial system by accepting crypto payments and storing the money in crypto wallets rather than storing stacks of cash.”

According to a CoinDesk report, "Crypto’s inherent volatility and high transaction costs make it a poor substitute for cash, dissuading many potential cannabis business owners from going through the trouble of setting up a digital wallet and learning how to accept crypto payments." 

In 2018, Coinbase shut down a Washington-based MMJ dispensary’s account, citing federal regulations. 

Even if cryptocurrency were the solution, there would be other issues that it could not legally fix, such as high taxes, low-profit margins, and black market competition.

Background: Silk Road, a darknet founded by Ross Ulbricht, introduced the marijuana industry and the cryptocurrency sector. “Before being shut down by the FBI in 2013, the Silk Road allowed people to use bitcoin to buy and sell marijuana, which was at the time criminalized in many states.”

However, there have been changes that normalized both industries since then. CEO Ryan Hunter pointed to the Crypto Cannabis Club, a social club for cannabis consumers, "basically uses NFTs as the membership card,” referring to non-fungible tokens.

Cannabis, Crypto & Social Equity

People’s DAO is a decentralized autonomous cannabis organization that is primarily for BIPOC leaders in the cannabis industry to gain access to capital. Also, there are other organizations that provide NFT services to strengthen their community.

Henry Baskerville, the owner of Colorado-based law firm Fortis Law Partners, told CoinDesk that the Section 280E tax requirements mean cannabis companies pay around a 70% tax rate, compared with the average corporate tax rate of 20%.

“A lot of people get into cannabis thinking that they’ll make money hand over fist, but they aren’t taking into consideration these taxes and smaller profit margins, so they fail,” Baskerville said.

Section 280E, states that businesses selling cannabis, or any other federally illegal controlled substance, cannot deduct any expenses incurred in the production, distribution and sale of that product.

With tight profit margins and cash flow issues, the volatility of cryptocurrencies would also be a risk for cannabis companies.

Marijuana Banking Reform Is Needed

The Secure and Fair Enforcement (SAFE) Banking in Cannabis Act was created to give cannabis businesses in legal-use states what they are lacking today: safe and affordable access to banking services.

The bill, introduced by Colorado Rep. Ed Perlmutter, sets up protections for banks and credit unions so that they can offer loans, capital investment, and other services to cannabis companies in states with legal markets.

In June, the Senate rejected for the sixth time, the bipartisan marijuana banking legislation in the final version of the United States Innovation and Competition Act (a.k.a The America COMPETES Act).

“SAFE won’t clean up all of the industry’s problems, but it would have a significant impact,” Baskerville told CoinDesk. “Some cannabis business owners are paying in the range of $2K a month just for the pleasure of having a bank account.”

How About Blockchain Technology?

Sundie Seefried, CEO and president of Safe Harbor Financial, which has provided cannabis banking services since 2015 and processed more than $14 billion, is excited about the possible implementation of blockchain technology. “Start to finish, I know that’s a legitimate [cannabis] plant right from the get-go if we do this correctly,” Seefried said about the potential of integrating blockchain technology.

"The cannabis industry has a lot of friction, a lot of redundancy, and a lot of authentication. That's a problem, and through the use of blockchain technology, everything is transparent," said Ben Bartlett, a member of the city council of Berkeley, California and a crypto lawyer. "With the automated use of smart contracts, it significantly decreases the amount of friction in the cannabis industry."
Photo: Courtesy Of Pietro Jeng On Unsplash

Posted In: bankingCannabisCryptocurrencyGovernmentNewsRegulationsPoliticsMarketsGeneral

11 Best Black Friday Deals on Amazon

11 Best Black Friday Deals on Amazon

The best Black Friday deals from Amazon are still coming hard and fast because the holiday is not yet upon us and the mega-retailer prefers to keep consumers on the hook for as long as possible—spending as much money as possible. 

To that end, here are some of the best Black Friday deals from Amazon that you might want to consider today.

Calphalon 10-Piece Pots and Pans Set

Regular Price: $172

Sale Price: $138.88

Calphalon’s 10-Piece Pots and Pans Set is designed with stainless steel, stay-cool handles along with pour spouts. The nonstick surface is PFOA-free and built with hard-anodized aluminum that is both durable and conducts heat extremely well. The set includes 2 fry pans, a sauce pan with cover, saute pan with cover and large stock pot with cover.

Apple AirPods 2nd Generation

Regular Price: $144

Sale Price: $85.49

The 2nd Generation AirPods from Apple connect to all Apple devices and give you an enhanced listening experience. Plus, they come with a case that keeps them safe and allows you to charge them in a secure environment. With over 24 hours of battery life, access to Siri and easy setup, you can start listening to your favorite tunes or podcasts today.

Adidas Ultraboost 21 Running Shoes

Regular Price: $129.98

Sale Price: $89.98

The Adidas Women’s Ultraboost 21 running shoe is perfect for anyone who likes a short run, maybe a 5K, half marathon or more. Coming in several colors and styles, you can slip these shoes on, enjoy the cushioned outsole, sink into the supple insole and secure laces.

Ninja AF101 Air Fryer

Regular Price: $129.99

Sale Price: $97.83

The Ninja AF101 Air Fryer allows you to crisp, roast, reheat and even dehydrate food products faster and cheaper than ever before. It has a 4-quart capacity and offers a wide temperature range along with several time settings so that you can customize each dish to your needs. Plus, all the parts are dishwasher safe.

Beats Solo3 Wireless On-Ear Headphones

Regular Price: $199.95

Sale Price: $99

Beats by Dr. Dre are among the best headphones on the market, and the Solo3 Wireless On-Ear Headphones include the Apple W1 chip, Class 1 Bluetooth and 40 hours of battery time. These headphones even have a built-in microphone and offer an adjustable fit so that you can be comfortable whether you’re listening to an Android or iOS device.

Hoover Power Scrub Deluxe Carpet Cleaner

Regular Price: $198.98

Sale Price: $175.98

The Hoover Power Scrub Deluxe Carpet Cleaner allows you to keep your home spotless and clean up after your pets. The cleaner comes with the Hoover Paws and Claws Deep shampoo and a storage mat to keep the floor dry once it’s put away.

LG CordZero Auto Empty Cordless Stick Vacuum

Regular Price: $999.00

Sale Price: $851.71

The LG CordZero Auto Empty Cordless Stick Vacuum and Wet Mop All in One Tower is designed to work in homes with several pets or children and clean up all the messes that life brings. The battery lasts up to 2 hours, and there’s an extra removable battery that gives you even more cleaning time and power.

Breville Fresh and Furious Blender

Regular Price: $278.60

Sale Price: $199.95

Breville, a top name in blenders and juicers, offers the Fresh and Furious Blender, featuring 50-ounce capacity, Vac Q technology, pre-programmed cycles, LCD display and lid with pull ring. With the Fresh and Furious Blender, you can make everything from a smoothie to a soup and everything in between.

Hot Tools Professional 2000 Turbo Ionic Hair Dryer

Regular Price: $89.99

Sale Price: $55.63

The Hot Tools Professional 2000 Turbo Ionic Hair Dryer is designed for professional use, but it works perfectly in the home. With 1875 watts of power, 6 heat and speed settings and a lightweight design, you can easily style your hair and utilize the diffuser, cut back on the frizz and stretch the 8 ft cord for maximum functionality.

Columbia Heavenly Long Hooded Jacket

Regular Price: $160

Sale Price: $97.38

The Heavenly Long Hooded Jacket from Columbia is designed to be light for everyday use, but it’s heavy enough to protect you from the cold. The plush fleece lining, security pocket, water resistant fabric, 2-way zipper, and zippered hand pockets make the jacket both protective and functional.

ConAir InfinitiPro Hair Dryer

Regular Price: $49.99

Sale Price: $29.99

ConAir is one of the biggest names in hair and beauty, and the InfinitPro is an 1875 watt hair dryer designed for professionals with ceramic technology. The dryer comes with a diffuser and concentrator, and it allows you to blow out your hair just the way they would at the salon.

Deals the Experts Are Hoping For

Experts believe that Amazon’s Black Friday sale could linger for quite some time. It all started with the Prime Early Access sale on October 11 and 12. Previously, Amazon has offered the “Epic Deals” sale that ran through late October. 

This is to say that any sale could come up at any time. 

Even so, those monitoring Amazon are looking forward to a few potential deals, including:

  • Apple Watch
  • AirPods (any generation)
  • MacBook Pro
  • Large, underpriced TVs
  • Amazon Echo
  • More small home appliances (Dyson or Shark vacuums, Instant Pots, etc.) 

While these predictions are based on last year’s Amazon Black Friday Sale, it’s important to remember that most Black Friday sales are fairly consistent and push the products that are most likely to sell.

 

Featured image sourced from Shutterstock

Posted In: Partner ContentGeneral