Cannabis is still illegal at the federal level, which poses a variety of challenges for any cannabis operations attempting to conduct financial transactions even in states that have legalized pot. Not only that, carrying large amounts of cash poses huge security issues for dispensaries. However, cryptocurrencies are providing solutions to some of these problems and making it easier for cannabis related businesses to carry out transactions. While Bitcoin has become widely popular, there a few alternative cryptocurrencies that are designed just for the pot sector. Here are a few currencies that aim to make business easier for cannabis businesses:
Launched in January 2014, PotCoin was one of the earliest cryptocurrencies for the marijuana industry. It was designed to solve banking problems for people looking to transact in legal marijuana. The currency was looking to capitalize on Colorado’s legalization of marijuana and even installed a PotCoin ATM at a marijuana dispensary in Colorado.
However, the currency failed to make a huge mark and remained in the shadows till June 12, 2017. A press release and a video of NBA star Dennis Rodman sporting a potcoin.com shirt in North Korea gave PotCoin a shot in the arm.
PotCoin is in limited supply of 420 million coins, with close to 217 million in circulation. With its recent transition to Proof-of-stake, investors can earn 5% annual returns on their PotCoins. One point to note is that PotCoin claims transaction speeds of 40 seconds, which are pretty impressive compared to those for Bitcoin.
Market Cap: $15.2 million.
CannabisCoin is the payment solution for marijuana dispensaries, retailers and merchants and is backed by marijuana where it is accepted. CannabisCoin represents real medical marijuana specifically designed and grown by the “CannabisCoin Marijuana Cultivators“. These specific marijuana strains are to be bought and sold exclusively with CannabisCoins. The currency currently has a market cap of close to $2 million, according to coinmarketcap.com.
Market Cap: $2 million
The CHEX is building a blockchain based platform to track cannabis as it is moved from the field to dispensary. The site aims to be an exchange of weed-products, one that gives buyers confidence that the product they are purchasing really is the strain they wanted.
The company is in the middle of a token sale now that will run through October. It plans to use the new token to build other exchanges, using the digital coin as the standard of payment between buyers and sellers. For an exchange, an ICO offers an early benefit. If users buy in and start using the coin for business-to-business trades, the very act of using the coin could increase its value as they trade. The more people on the platform use it, the more the coin is worth, making nearly every purchase one that comes with a discount.
Market Cap: Pre ICO phase
Tokken aims to be a secure and completely legal mobile payment system for above-board marijuana purchases. Founded by Lamine Zarrad, who formerly worked for the Comptroller of the Currency, the mobile app verifies that a user has the legal right to buy weed or weed-based products. It checks all kinds of data points, including watch lists, then turns credit card payments into a digital token that a dispensary can accept. The dispensary can then convert the token back into dollars and, in theory, banks will be fine with this because they know Tokken goes out of its way to verify the transaction was legal.
Market Cap: Pre ICO phase
In February 2014, DopeCoin was founded by Adam Howell. Not much is known about the specific markets that the currency serves except that its "mission is to provide marijuana enthusiasts with a modern and secure way of doing business for the 21’st century,” the website notes.
Started with a vision of creating a ‘Silk Road’ for transactions in marijuana across the world, DopeCoin supply is limited to 200 million DopeCoins with about 111 million currently in circulation. It is also a Proof-of-Stake currency, where a 5% annual interest can be earned.
Market Cap: $2.8 million
Paragon is simply taking disparate ideas for cannabis industry smart contracts and cryptocurrencies, then streamlining them into a simpler, more cohesive approach. Blockchain solutions could track cannabis products from seed to consumer. This could go a long way towards professionalizing the marketplace. PRG tokens wouldn’t be used by customers buying medical marijuana. Instead, PRG tokens would be traded between suppliers, transporters, dispensaries and all the businessmen in between facing the same cash flow problems. Paragon coin is still having its ICO and will be in the market sometime later this year.
Paragon is also creating a chain of high-tech, fully equipped ParagonCoin Centers in all 29 States where cannabis is legal where cannabis businesses can come and work together.
Market Cap: ICO phase
All these currencies are "aspiring" to target big challenges that cannabis businesses face today but all of them are far from being accepted as a standard across the country. It'll be interesting to see which ones succeed in delivering their promise and revolutionize how cannabis businesses operate. Bitcoin is still the most widely accepted cryptocurrency by cannabis related businesses and companies like SinglePoint and First Bitcoin Capital are creating exchanges and wallets for cannabis businesses to accept Bitcoin as a form of payment. We also accept Bitcoin as a form of payment to facilitate quick and easy transactions for cannabis businesses.