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Banks Struggle in Marijuana Industry, Bitcoin remains preferred Payment Channel

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Banks Struggle in Marijuana Industry, Bitcoin remains preferred Payment Channel

The U.S. government recently allowed banks to work with licensed medical marijuana businesses. Many banks are reluctant to partner with these companies, even though medical usage of marijuana is a growing trend in an increasing number of states. Many banks have already stated that they will be reluctant to do business with medical marijuana businesses until marijuana is legalized on a federal level.

The news is nonetheless a great boon to many smaller medical marijuana business owners who have traditionally had difficulty finding funding. In general many of these companies have had to use cash as their primary form of tender, which has given rise to numerous security concerns from the businesses. Business owners have even resorted to installing panic buttons in their stores in the event of a robbery simply due to the easy-to-steal nature of using cash money for major transactions.

Co-owner of marijuana dispensary delivers a bag of cash to the Department of Revenue (source: NYTimes.com)

Co-owner of marijuana dispensary delivers a bag of cash to the Department of Revenue
(source: NYTimes.com)

Bitcoin alternatives

Widespread legalization of marijuana could actually help companies to bypass banks altogether in favor of a cheaper alternative: bitcoins. While Tony Gallippi, CEO of Bitpay, has stated that he refuses to do business with these tenders until marijuana is localized on a federal level, the alternative of bitcoins offers a promising future for the marijuana industry.

“Unfortunately we are unable to offer our services to businesses that sell drugs. Thanks for reaching out.” –¬†Charles Stevens, BitPay, Inc. Client Support Engineer (reddit.com)

bitcoin-accepted Bitcoins are allegedly a cheaper way for small businesses to manage their funds, though they may ultimately be more complicated than traditional banking methods. While it may take a while for medical marijuana to be legalized and Bitcoins to accept their business, the potential future of using the new form of cryptocurrency offers a bright future for owners of medical marijuana businesses. While Bitpay seems constrained towards the marijuana industry, many businesses within the market seem to embrace the digital currency as a quick and clean payment solution. Suzy Seeds is just one of the international business which proudly advertises its acceptance of the digital coin; the hasslefree, international and anonymous Bitcoin currency offers marijuana consumers an ideal solution.

New regulations

New ruling allows banks to partner with small licensed medial marijuana businesses, but may not have a great impact immediately due to initial reluctance to make these partnerships. However, business owners remain confident due to the possibilities that these banking partnerships offer for the safety and general ease of managing their funds. Bitcoins offer an additional option for these businesses to take in the future pending federal legalization of medical marijuana.

Even with permission, banks aren't eager to work with marijuana companies (source: fortune.cnn.com)

Even with permission, banks aren’t eager to work with marijuana companies
(source: fortune.cnn.com)