Cryptocurrencies have yet to solve or even make much of a dent in the cash problem that plagues the cannabis industry.
A full 44 U.S. states now have laws permitting medical and/or recreational sales of cannabis. Despite what might seem like a critical mass of popular acceptance, pot dispensaries and their suppliers still must operate almost solely in cash. No credit or debit cards accepted.
This is because banks are federally regulated and cannabis is still a Schdule 1 controlled substance. If a banker has any notion that an account applicant or holder is a cannabis company of any stripe, they promptly refuse service.
It's well-enough known that customers can only pay in cash at dispensaries. But the situation goes much deeper.
For example, a rep from a California maker of marijuana edibles (who asked not to be identified) said that while his company offers normal corporate perks like health insurance, a 401(k) plan, and even has a Christmas party, it pays its dozens of employees in cash. And the company has developed painful in-house cash documentation systems to comply with taxes – yes, federal ones – and to be prepared in case of audit.
So cryptocurrency would seem like a natural solution for this constant flood of cash. Launched in 2014, Potcoin aspired to be a tailored solution. Then came MarijuanaCoin, CannabisCoin, CannaCoin, HempCoin and still others.
With its sponsorship of Dennis Rodman's trip to North Korea in June, Potcoin has gotten the most ink. Its cache received a temporary boost when rumors circulated that the mighty Snoop Dogg was in with Potcoin. Alas, neither Bitcoin nor cannabis cryptocurrencies have more than a scant presence in the industry. Cash still rules.
Another California cannabis industry and dispensary veteran – who also asked to remain anonymous – explained the crux of the problem. Essentially, cryptocurrencies make a complex problem even more complex.
"When you think about it, people walk into a dispensary they already have a lot of questions. There's a lot of anxiousness and concerns that they have," said the veteran. "And now you're telling them that they've got to use something called Potcoin? So, greater complexity and people say 'I'd rather just use cash.'"
The man went further to say he did know of one cannabusiness person who agreed to receive some payment in Potcoin. The person felt stuck with the Potcoin and so traded it for Bitcoin. He didn't know what to do with the Bitcoin but heard he could use it to buy a Tesla car. He reportedly bought the Tesla with an eye toward selling it to recoup dollars.
