Bitcoin – The Ideal Payment System for a Thriving Cannabis Industry

Bitcoin could serve as a decentralized, stable alternative for the cannabis industry, promoting financial autonomy and preventing concentrations of power by enabling transactions without intermediaries. The cryptocurrency supports sound economic practices within cannabis, benefiting small breeders and producers by focusing on the quality of their work rather than the size of their operations.

The world has experienced an unprecedented consolidation of power and wealth in recent years. In the same time that Bitcoin has come to prominence, governments, major banks, and “Big Pharma” have aligned to further concentrate power and weaken households and family businesses. At the very heart of this issue lies money. Or rather, monetary policy. Why? Let’s take a closer look.

For more news like this, along with all the latest in legalization, research, and lifestyle, download our free cannabis news app.

A Very Worrisome Concentration of Power

The challenges faced by Bitcoin and the cannabis industry predate the COVID-19 era. The cannabis community has always been concerned about buyouts and business consolidations, even before legalization. Many industry players fear that it might become similar to “Big Ag,” “Big Tobacco,” or “Big Pharma.” This fear is becoming a reality, as consolidation occurs before our eyes and many feel powerless against it. Access to basic financial services is a struggle for many in our industry and, as a result, a parallel financial system has emerged as an alternative to the existing, failing system.

Before Bitcoin – A Biased System

The old system before Bitcoin is based on fiat currency, controlled by central banks createing money out of nothing. This system unjustly distributes wealth, with the majority going to insiders while the population faces inflation and pays interest to banks.

Since the end of the gold standard in 1971, the purchasing power of fiat currencies like the American dollar—and the euro—has significantly decreased. This has led consumers and businesses to take on more credit to acquire the assets they need, which can be extremely challenging for businesses in the cannabis industry. Add to this the additional regulatory burdens faced by our industry, and we have created an environment in which small family businesses cannot stay afloat, let alone make a profit.

The fiat system is closely linked to the principle of intellectual property, whereby innovators seek exclusive rights over their “intellectual property” and any of its derivatives to prevent others from profiting from their work or altering it. In the context of cannabis, this system would encourage breeders to limit access to their cultivars and prevent other breeders from enhancing the genetic pool, ultimately leading to the destruction of cannabis biodiversity.

It also leads to predatory practices against growers who might inadvertently violate patents by engaging in cross-pollination with patented varieties. The fiat system, along with exclusive predatory practices, hinders innovation and encourages consolidation in agriculture, as small farms struggle to compete in a system controlled by large corporations and banks that fund them with printed money. This system undeniably penetrates the cannabis industry, as I have written for many years.

The industry has consolidated at an alarming rate, with debt-ridden companies and “cronies” pushing old farms out of the market while flooding it with poor-quality products. This leveling down is the direct result of the market system based on fiat money, which encourages consolidation and does not favor high-quality artisanal products. Small producers often struggle to thrive in a system that demands economies of scale and inaccessible compliance requirements. Instead of consolidating the cannabis industry based on capital raising, I suggest that an industry centered on Bitcoin would reward producers based on the quality they bring to the market, rather than the size of their operations. How?

The New Bitcoin Paradigm: A Currency as Limited as Nature

Although many may still view cryptocurrencies with skepticism, I am convinced that using a “sound money,” specifically Bitcoin, resolves many of the issues described above. Sound money is limited in quantity and thus retains its value over time, rewarding hard work and innovation. 

Bitcoin, as a decentralized and limited currency, offers a viable alternative to the infinite fiat currency. It separates money from the state and corrupt politicians and central bankers, while securing transactions between parties without the need for intermediaries. Bitcoin is not subject to the inflationary pressures of fiat currencies and is designed to increase its scarcity over time, rewarding deferred gratification and long-term thinking.

By using Bitcoin, breeders and producers can be paid in a currency that allows them to focus on their craft without needing to engage in patent wars or defend their intellectual property based on the strategies of large agro and pharma groups.

Unlike agro giants that patent their genetics and then pursue neighboring farmers when their fields are cross-pollinated, in the case of cannabis, open-source breeding is arguably the most appropriate intellectual property (IP) strategy for small breeders and farmers. Engaging in a patent war with limited resources is often a losing battle, simply because obtaining a patent on your variety (as a breeder) doesn’t prevent anyone from using your genetics. It merely provides a legal basis to hire a law firm and sue the offender in court, which means you need cash reserves, funds raised from investors, or bank loans. If the other party is well-funded, it is very easy for them to bankrupt you through legal proceedings. They literally turn your intellectual property (your patent) against you. It’s a game where the one closest to the money printer (through subsidies and tax credits, investments, or loans) always wins.

Bitcoin offers an alternative solution by allowing breeders and producers to be paid in a currency that appreciates in value and preserves the value of their work. “Hard money.” Bitcoin protects their identity and allows them to transact with anyone in the world without needing the permission of intermediaries. Bitcoin offers breeders the opportunity to focus on their craft and generate income based on the quality of their genetics, rather than defending intellectual property to collect perpetual rents. Because breeders and producers should not have to cozy up to the money printer to thrive.

In addition to promoting financial autonomy, Bitcoin also addresses the issue of transaction settlement, which is a central problem for businesses operating legally in the sector, which have been excluded from the traditional banking system. Many of these businesses have had to resort to cash transactions, which pose practical and security issues. The instant and trustless settlement of Bitcoin transactions between parties offers a safer and more efficient way to conduct transactions, without depending on banks or payment processors. This eliminates the need to pay processing fees (often exorbitant) and allows businesses to be autonomous rather than dependent on financial institutions historically hostile to the cannabis industry.

Conclusion

Strainly has been using Bitcoin as a payment gateway for over a year, and we have found that this strategy is not only feasible but also liberating.

Of course, it is worth being cautious, and skeptics will undoubtedly be nervous about the price fluctuations and widely publicized “crashes” in the “crypto” markets in recent years. The fact that Bitcoin is still in its early stages of adoption and is not yet widely used as a medium of exchange or store of value contributes to its volatility. This currency has only existed for 15 years and is the only truly decentralized form of money, which can lead to more pronounced price movements as there is no entity to stabilize the market. As more and more people become familiar with and use Bitcoin, its price should become less volatile. However, it is worth noting that since its inception, bitcoin has appreciated far more than any other asset.

In conclusion, I believe that Bitcoin is the obvious solution for the cannabis industry. If you believe in decentralization, open-source technology, resilience, and biodiversity, Bitcoin aligns perfectly with these values. It offers a solid monetary system that promotes financial autonomy, a fair distribution of wealth (which must be earned and cannot be printed out of nothing), which, ultimately, protects biodiversity by fostering a long-term vision. It solves the issue of transaction settlement and allows breeders and producers to be rewarded for their work, focusing on quality rather than engaging in patent wars and defending artificial barriers to entry. Ultimately, Bitcoin enables family businesses to be autonomous, freed from the constraints of a failing financial system.

—

(Featured image by Thought Catalog via Unsplash)

DISCLAIMER: This article was written by a third-party contributor and does not reflect the opinion of Hemp.im, its management, staff, or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the company may believe that its expectations are based on reasonable assumptions, the actual results that the company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in Newsweed, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Hemp.im assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Hemp.im is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.