The Company That’s Trying to Get the Weed Industry to Go from Cash-Only to Full-On Cryptocurrency
Kushism is my favorite weed dispensary in L.A. The employees are nice, the products are solid and the lines aren’t usually too long. Similarly, in terms of ambiance, it doesn’t feel like an overly sanitized Apple Store, or like picking up an eighth from a dealer; essentially, it feels old fashioned without being outdated, or at least as old fashioned as a legal pot shop can possibly feel.
When it comes to their transactions, however, Kushism is part of the cash-only culture that still dominates the industry (due to both federal law and the high price of credit-card processing systems willing to operate within the cannabis industry). In fact, I was recently waiting to pay for my King Louis XIII indica (earthy, piney, sleep-inducing) and my Jack Herer sativa pre-rolled joints (euphoric, joyful, clear-headed) at Kushism, excited to get back into the car and smoke the sativa, when my Visa was denied. “Cash only,” the attendant reminded me.
Another player in the industry, however, Alt Thirty Six, wants to alleviate the cash-only burden for dispensaries and customers alike — as well as the dangerous reality that my favorite budtenders at Kushism probably handle thousands of dollars every night, which not only makes them vulnerable to human error in terms of accounting and taxes, but also to armed robbery. A digital payments platform that facilitates payments from the business-to-business and business-to-consumer aspects within the cannabis industry, Alt Thirty Six uses cryptocurrency as an alternative to cash, allowing dispensaries to be able to pay and transact with their vendors, suppliers, distributors and customers digitally. In other words, duffel bags will no longer be essential to the industry’s banking process, reducing the need to figure out where to safely stash large amounts of cash.
“Right now, the cost of cash-handling equates to about 15 to 20 percent of the total revenues that cannabis companies are generating in a year,” explains Ken Ramirez, Alt Thirty Six’s co-founder and CEO. “In addition, a lot of time is spent on cash-handling activities like counting the money five different times and counting out your employees’ earnings down to the penny. If you’re a larger dispensary — say you do $350 million a year in cash with no banks — you run into a severe problems. We reduce those problems.”
He believes Alt Thirty Six’s value proposition is good for customers too: “The consumer benefit is they don’t have to pay in cash and make extra trips to the ATMs and pay those fees. They also get incentivized in the form of discounts toward purchases and discounts on products, such as $25 off their first purchase and ongoing loyalty programs paid out in digital currency.” (FWIW, I can relate: Earlier in the week, the ATM at Kushism broke, and I had to walk across the street and down to the meat market/liquor store hybrid to withdraw cash for my joints.)
Practically speaking, most of the process is routed through Alt Thirty Six’s partner — the blockchain project Dash Network. “Right now, Dash is 11th in the world out of 1,600 [cryptocurrencies], Bitcoin being number one,” Ramirez says. “Dash is a decentralized piece of software that sits on top of the internet, a fully decentralized network in comparison to the banks, which are a centralized network. This allows us full control of the funds — or the dispensary full control of the funds — without having to worry about government intervention.”
The company is in the process of obtaining its money transmission license in states with recreational or medical policies; as such, it’s currently awaiting final approval from California and Nevada, with plans to enter the market in Michigan, Washington, Florida, D.C. and Colorado shortly thereafter. They’re also already live in Arizona. And so, there, they’re in the process of “onboarding clients — including many brands, cultivators, manufacturers and dispensaries,” according to Ramirez.
“Since we’re dealing with two gray areas — cryptocurrency and cannabis — we put a large focus on compliance and strive to go above what’s described in existing regulations,” Ramirez continues. He also says Alt Thirty Six is “partnering with the largest government regulatory bodies” to help create standards for digital payments that go beyond the cannabis space. “Dash can be used in multiple industries, not just cannabis,” he claims. “We just created an application for operators to be able to use Dash within cannabis.”
Essentially, this is what differentiates Dash from other cryptocurrencies that are branded to appeal to the weed industry, such as Potcoin. “Those companies that have created their own token are called ICOs, initial coin offerings. Early stage companies do that in an attempt to raise money through their coin offering. But the downfall with ICOs is that that specific coin only has value within the cannabis industry, which creates little value from the global market. Dash isn’t an ICO. We’re not creating our own coin. Our whole goal from a consumer-adoption perspective is to attack the industry that has the greatest problem and then look at complementary and adjacent industries next.”
It might turn out then that my beloved Kushism will soon go from cash-only to crypto-only. Either way, my Visa is still probably gonna be completely useless.
Tierney Finster is a contributing writer at MEL. She last wrote about why it’s so difficult to bring the #MeToo movement to the porn industry.
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