In light of the dangers associated with safeguarding thousands of dollars in cash transactions daily, it’s no wonder that cryptocurrency is so attractive to cannabusinesses. In this post, we will introduce some of today’s top-rated cannabis cryptocurrencies.
Cryptocoins (cryptocurrency) are generally used just like real coins – to purchase or sell goods or services, to transfer money, to save for later use, etc. Among the most popular cryptocoins today are Bitcoin (BTC), Litecoin (LTC), Etherum (ETH), Zcash (ZEC), Dash (DASH), Ripple (XRP), and Monero (XMR).
Other cryptocoins are utilized within the cannabis industry. Most of the successful and popular ones were the first to be established (in 2014). Here are five of today’s top-rated cannabis cryptocurrencies:
- PotCoin (POT) was designed to facilitate transactions within the legalized cannabis industry (initially in Colorado). It is a peer-to-peer cryptocurrency that has a large international community behind it, and there are more than 800 Potcoin ATMs in 35 countries.
- HempCoin (THC) initially focused on providing online payment solutions for the agricultural and farming industries (marijuana and tobacco cultivation). Following its August 2018 upgrade, or “coin swap”, the new HempCoin has advanced security features and peer-to-peer transaction capabilities, among other things.
- DopeCoin (DOPE) is another decentralized digital currency with a payment system that is similar to Bitcoin. Among its features is Dopecoin/Smoke Exchange “Crypto Billings,” which integrates cryptocurrency payments into e-commerce platforms.
- CannabisCoin (CANN) is a popular cryptocurrency that is backed by the physical product – one coin buys one gram of cannabis. CannabisCoin can also be exchanged for dollars, Bitcoins, and other currencies.
- CannaCoin (CCN) is another peer-to-peer cryptocurrency that runs on a decentralized blockchain and was created to benefit the medical cannabis community (growers, dispensaries, and patients).
The ICO controversy
Initial Coin Offerings (ICOs), like crowdfunding, are used to raise capital. Otherwise known as “token sales,” ICOs have come under scrutiny recently due to the high number of scams associated with them and their high failure rate. Nevertheless, ICOs raised $12 billion in the first half of 2018 alone.
The high risk of fraud associated with ICOs has been the primary driver for the rapid development of ICO regulation.
Words of advice
There is an inherent risk to cryptocurrencies – for both investors and businesses that utilize them. If you are a prospective buyer, we recommend that you do your research and never invest more than you can afford to lose. If you are a company looking to get into the cryptocurrency market, you should first seek legal advice to ensure that crypto is right for your business and that you are not running afoul of any laws or SEC regulations. The Cryptocurrency and Cannabis Practice Groups at Moskowitz, LLP provide legal opinions for ICOs and expert assistance if things go wrong. Contact our San Francisco office for a consultation.