Cannabis may be legal in many states now, both for medical and recreational purposes, but it’s not easy being a dispensary. Many dispensaries don’t have access to full banking services. Banks and credit card companies are skittish about assisting companies that deal in a product that’s still illegal at the federal level. This forces dispensaries to use cash for their transactions. Unfortunately, this puts the dispensaries at a high risk for robbery.
Two cryptocurrencies came onto the scene in 2014 to deal with this problem: Potcoin and Dopecoin. Both of them are fighting to get the attention of dispensaries, users, and other people in the cannabis supply chain as a way to use secure banking outside of the normal channels. Both of them are offshoots of Bitcoin, the most successful cryptocurrency by far.
Some dispensaries in are already using Bitcoin as a method of payment, so the thought of using other cryptocurrencies isn’t farfetched. However, getting people to accept a currency is the tricky part. Here’s how each coin is looking to become the coin of choice for the cannabis industry.
Potcoin was established in 2014 as a method of payment for legal dispensaries of cannabis. It generated huge buzz for its first year but then fell off the radar when the original founders of the currency decided to go to other projects. The community who were using Potcoins took control of the project and are continuing development.
The goal of Potcoin is to become the payment method of choice at all levels of the cannabis industry. Currently, they are working on creating secure cryptocurrency wallets for mobile phone devices. This will allow users to go to their dispensary and pay using their smartphones discreetly. Potcoin also transfers coins and processes transactions much faster than Bitcoin due to its smaller blockchain.
The big push for the project this year is to get into the ground floor of Canada’s upcoming legalization of cannabis. Indeed, when Canada announced that they would be legalizing cannabis, Potcoin had a huge spike in price. They hope to be an option for payment from the very moment the dispensaries open. This is a smart move. If America suddenly legalized cannabis at the federal level, many of the advantages of using a cryptocurrency from the dispensary perspective would be gone.
Currently, Potcoin is trading around $0.02 per coin, which is near record highs for the coin.
Dopecoin was also founded in 2014, and it has undergone some major changes. They just did a currency swap from Dopecoin to a new coin, Dopecoingold, that still operates under the same name in the trading markets. Their core focus for users is quick transactions and low fees, but for dispensaries, they are taking a unique approach.
As part of their pivot they are targeting another problem that dispensaries face: advertising. Many states have strong restrictions on dispensary advertising and the major PPC networks do not allow advertising of drugs on their networks for any reason, even if it is legal. This makes it difficult for dispensaries to get noticed and compete. Dopecoin is setting up their own advertising network, Reefer Media, to give dispensaries a way to advertise. Users will display banners on their site and get paid in Dopecoins, while dispensaries can order ads on the network to be paid for in Dopecoins. This provides a strong incentive for people to use the currency.
The ad network hasn’t been released yet, but is expected to come out in the middle of 2017. As of this writing, Dopecoin is trading at a very low rate of $0.00098. If this advertising method works and dispensaries see an uptick in sales, expect that number to jump.
The key for both currencies is to get a niche before the legal and banking climate changes enough that current credit methods become more attractive. Even with things like Android Pay and Apple Pay, similar methods for paying quickly from your phone, few people use them. Cash and credit/debit cards are what we’ve been trained to use. If the coins can gain acceptance, like Bitcoins are getting, it will make two more successful cryptocurrencies and perhaps make other currencies more valuable as well.
Michael is a marketing and creative content specialist at GotVape.com with a primary focus on customer satisfaction. Technology and fitness combined with healthy lifestyle obsession are his main talking points.