3️⃣A Tale of Two Industries

Governments around the world are imposing laws and regulations for cryptocurrency to discourage businesses from concealing transactions. A recent report by the US Treasury Department explicitly emphasized that cryptocurrency “poses a significant problem by facilitating illegal activity broadly, including tax evasion.”

Similarly, several attempts to legalize, regulate, and tax cannabis have been explored in recent years, with little movement from federal legislators. This legal limbo has left legal cannabis producers in a bind, restricting most electronic financial transactions and burdening the industry with an overabundance of cash. Over the last 25 years, the state-legal cannabis industry has grown exponentially, but banking the proceeds of even a lawful cannabis business is still illegal under federal anti-money laundering (AML) laws. This effectively excludes the industry (and any businesses that serve it) from accessing banking and financial services.

On the one hand, we have a highly regulated industry, cannabis, which must follow a strict operational compliance regime and support financial services providers’ rigorous compliance oversight. The whole supply chain requires seed-to-sale traceability and financial transaction information down to the minute detail. We have a rich supply of digital crypto assets that lack not only regulation but also ideal opportunities to use them properly. Modern cryptocurrencies are virtually free to use, leave their own accountancy trail, and are cheap to secure and deal with. In other words; What better industry to support the wave of cryptocurrency than cannabis? By piggybacking on the diligence, monitoring, and reporting already required for cannabis, cryptocurrency can leverage the existing infrastructure. At the same time, cannabis gains a solution to the cash problem by accessing the digital banking structure and a large pool of digital assets.