In the second in our series, we continue our look at bridging the gap between Cryptocurrency and Cannabis:
The Cannabis business is preparing to enter into high gear as more and more states legalize recreational use in addition to medical. It’s speculated that this new industry will make millions, if not billions of dollars in the United States and with it a whole new crop of millionaries. The problem is, Cannabis (aka Marijuana) is still federally illegal and this has caused the issue of potential theft to be a front and center concern for business owners.
This is where Cryptocurrency can come in to play as both a means of purchasing Cannabis for the user and as a means of doing financial transactions for businesses. As stated in my post: Cannabis, Taxes and Stablecoins
In a recent Twitter post, I put the following question to Michael Wagner @BchainEconomics Founder and CEO of Tokes Platform:
“There is a proposed law in CA that would allow a cannabis biz to pay their taxes in Stablecoins, they haven’t said which coin but do you think this will help with adoption of
#crypto and do you think dispensaries will accept crypto as payment?”
Michael Wagner responded via a Medium.com post:
This post is in response to a question posed by Jason Nelson (@dragonwolftech) on Twitter.
“There is a proposed law in CA that would allow a cannabis biz to pay their taxes in Stablecoins, they haven’t said which coin but do you think this will help with the adoption of #crypto and do you think dispensaries will accept crypto as payment?”
In response, I believe we can unequivocally declare that the legitimization of tokenized payment solutions (cryptocurrency) by state and local governments, for any purpose, is of great long-term benefit to businesses operating in the digital currency space and will undoubtedly lead to increased adoption by the mainstream consumer. Coupling this validation with the cannabis industry, which is in desperate need of an electronic payment solution and alternatives to banking, magnifies the impact of these laws.
Speaking first-hand, in countless conversations with cannabis operators about the integration of the Tokes Platform point-of-sale software — enabling the acceptance of a range of digital currencies — and general advantages associated with a transition to blockchain, the desire to adopt is presently lacking. This is partially a result of lack of understanding, lack of explicit government approval, and in part due to the somewhat nefarious beginnings of bitcoin (which I do believe helped demonstrate the utility of crypto at a pivotal time), leaving these operators skeptical of its legitimate use.
The referenced California law is just one of many recently proposed by state governments creating a pathway for businesses to adopt the technology. Nevada, home of Tokes Platform, has been championing this movement for several years, starting with SB398 (Senate Bill), passed in 2017, which prohibits the taxation and certain regulation of blockchain-based businesses. In the 2019 legislative session, there are at least 4 additional bills related to blockchain use and adoption, and a committee bill we have been supporting since initial discussions in 2018 — AB466 (https://www.leg.state.nv.us/App/NELIS/REL/80th2019/Bill/6890/Overview). Ohio recently passed a law enabling the payment of state taxes in cryptocurrency as well.
AB466 is most directly related to the CA bill in question. It would introduce a pilot program for alternative payment solutions, like cryptocurrency, to be used as a cashless digital payment option for cannabis consumers in dispensaries, and subsequently for tax remittances to the state. Given the federal government’s sluggish pace at passing appropriate regulation for cannabis, state governments are finding the technology behind blockchain to be a suitable immediate solution.
To summarize, state validation of blockchain and cryptocurrency will unquestionably improve adoption of the technology in both businesses and at the consumer level. We’re just seeing the first phase of these legislative efforts. These laws will result in improved visibility for cryptocurrencies of all types, and a positive impact on the perception of the industry.
For more information on Tokes Platform please visit: Tokes Platform
I want to thank Michael Wagner and the team at Tokes Platform for the response. As we progress in the series, I hope to include similar indepth answers to the question of Crypto and Cannabis.