As drug legalization spreads, banks are often reluctant to process payments for marijuana companies. The main reason is that so long as drugs are illegal under the federal government of the US, major payment processors such as Mastercard, Visa, PayPal, among others, will not process those transactions. Marijuana vendors are then forced to either credit unions or local banks that do not do business across state lines. But they are compelled to accept payments in cash. This is risky in case the business is robbed, and also customers often don't feel comfortable or the need to carry cash in the digital age.
Blockchain presents the perfect solution. Marijuana vendors and the vendors of legal drugs can accept bitcoins and other cryptocurrencies. Many vendors of legal drugs already do (depending on the nation marijuana may be legal, coca leaves may be legal, khat leaves may be legal, among others). Many of these vendors already accept cryptocurrencies as safe ways to make large volumes of sales without having to handle cash. As the regular banking industry still shuns the legal drug market, blockchain technology is becoming the de facto payment method for marijuana and other legal drugs. As customers get used to using cryptocurrencies in this sector, it will eventually spread to other sectors. Though Amazon does not yet accept bitcoin payments, Amazon Web Services is heavily investing in blockchain technology. Goldman Sachs is now trading bitcoin futures, and will trade bitcoins themselves in the future. As large institutions become more heavily involved it bitcoins, corporate use will become more mainstream for both investment and for use as active currency.
As legalization spreads, Canada is due to make marijuana legal nationwide this year. By 2020, pot sales are projected to surpass weed sales. Cryptocurrencies will likely heavily be involved in this, and will grow considerably along with the marijuana market in Canada. As businesses complain about the cost of payment processors, cryptocurrencies can offer an alternative to companies such as PayPal that offer high fees for business transactions. Cryptocurrencies have the potential to bring competition to the market in terms of payment transaction, and that's likely a huge factor in why blockchain and cryptocurrencies are now getting huge institutional investment.
