Cannabis Security Firm Goes Bitcoin to Solve Industry’s Banking Problem
In what it describes as a “logical move,” a Denver cannabis security firm has announced that it will accept bitcoin to offset the lack of banking support currently plaguing the legal cannabis industry, as well as reduce the exorbitant fees imposed by credit card companies. Also read: Bitcoin Futures: A Better Solution to Block Size […]
In what it describes as a “logical move,” a Denver cannabis security firm has announced that it will accept bitcoin to offset the lack of banking support currently plaguing the legal cannabis industry, as well as reduce the exorbitant fees imposed by credit card companies.
The emerging legal cannabis industry in the US has a banking problem. The financial industry is wary of working with up and coming cannabis businesses since the plant is still considered a Schedule 1 drug by the federal government. Jaime Lewis, owner and founder of a Denver marijuana edibles manufacturing company called Mountain Medicine, explained this major obstacle to ThinkProgress.
“The idea was, once legalization hit and it was proven in the state of Colorado that with a state-regulated system this industry can be favorable for the economy, can pull it out of the black market, that there would’ve been a conversation around giving us access to banking,” said Lewis, continuing:
The state’s black market is withering, but many of the people who have replaced it still find themselves riding around with personal bodyguards and suitcases full of cash.
Handling cash only is a sure way to attract a lot of unwanted attention. This is why security is becoming big business in states like Colorado. But one firm is trying to tackle this problem by meeting cannabis businesses half way, even if they don’t yet accept bitcoin themselves.
Denver-based industry security firm, Security Grade Protective Services, has announced that it is now offering Bitcoin as a payment option for its clients. The decision was made not only to ensure that their clients’ money is out of criminals’ reach but also to cut costs and distinguish themselves from their competitors.
“New cost effective solutions for these up and coming cannabis businesses are a must,” said CEO Derek Porter. “This gives them another safer option to pay us in an already risky and cash heavy industry. Now they don’t have to touch the cash … furthermore, they don’t have to pay outrageous merchant service fees.”
Typically, businesses pay somewhere between 3% and 5% for credit card processing fees whereas the fee for Security Grade’s Bitcoin payment solution is only 1%. The Bitcoin payment option is part of the company’s newest program T.A.P. (Total Accountability Program), a new video surveillance program tailored to the cannabis industry, which was launched last December.
When asked if he expects this to be a boon for his business, Porter replied:
I do not expect for clients to line up to pay us with this form of payment right away. However a decentralized method of legitimate payment was a logical move on our part considering over half our clientele are cannabis operator licensees.
Meanwhile, other companies such as American Green and their ZaZZZ Bitcoin-friendly cannabis vending machine are also experimenting with Bitcoin as a solution to the banking problem, alongside bespoke alternative cryptocurrencies such as PotCoin and MaryJane coin. Therefore, if the financial industry continues to shun this new thriving economy, Bitcoin may just become the go-to cashless option of payment for Cannabis businesses in places like Washington D.C., Oregon, Alaska, Colorado, and Washington.
Do you think Bitcoin can provide a cheaper and safer payment method for cannabis businesses? Share your thoughts and comment below!
Images courtesy of LinkedIn