It wasn’t too long ago that nobody would touch the marijuana industry – but after fairly rapid legalization and decriminalization efforts, states are innovating in this green space – and at least some of them are also doing it with blockchain based technology.
A Cointelegraph story posted today shows the state of Arizona considering adopting a blockchain-based cannabis system in order to handle new marijuana business in a kinder, gentler market for the natural plant that was previously a more strictly controlled substance.
Arizona Attorney General Mark Brnovich announced in a recent press release that “cash-intensive” businesses can use the digital payment system to handle the money that customers pay for cannabis products.
A sandbox testing phase will act as a beta phase for the technology with on-boarding and testing.
The blockchain play is partially related to the hesitance of conventional banks to touch new marijuana business.
Sometimes that can get them in trouble with federal regulators.
“Cannabis, while legal in some states in the U.S., is still considered a controlled and illegal substance by the federal government,” writes Cointelegraph’s Max Boddy. “As such, banks are hesitant to deal with cannabis-related business as it would be grounds for the government to revoke their federal deposit insurance, which is a crucial financial safety net for banks.”
However, as the cash economy for legal cannabis in Arizona is worth at least $350 million a year, being able to cash in on this market is a big competitive advantage.
The news in Arizona is only part of a sea change in many U.S. states to adapt to new rules, new technologies and new markets. Will crypto, hemp and marijuana go together in this brave new world of cannabis decriminalization?
In the greater context, it’s worth noting that marijuana is still, as Boody pointed out, a controlled substance, and so is hemp at a federal and state level, where producers need to be licensed to grow.
This emerging news can be good for fans of both legal marijuana and cryptocurrency who have related portfolio holdings that blend these two plays. Both of them could be big market movers in the future as new products come to market, and companies find new ways to make a buck.
