Cannabis is legal in more than a few states now, but it hasn’t been “easy money”. In fact, in Colorado, many businesses have had a hard time dealing with large sums of cash, credit card services and PayPal. Plus, the banking industry under the U.S. Federal Reserve wants nothing to do with cannabis money, because marijuana is still illegal at the federal level.
Groups of people in Colorado have even tried to form their own marijuana credit union, but bureaucrats squashed the effort. Furthermore, indirectly-related merchants are seeing their accounts frozen or shut down for dealing with cannabis-related sales. PayPal and credit card companies are infamous for censoring products and services they don’t approve of.
According to a recent Motherboard report, cannabis business owners are either opting out from using banks or lying about their operations. The article detailed that many business operators keep activities secret, but eventually these merchants are getting caught. One such person is Tim Cullen, owner of the Colorado Harvest Grow Op. When Wells Fargo figured out Cullen’s funds paid for cannabis operations, the banks shut his account down. The bank also closed the accounts of family members related to Cullen.
One solution has been to turn to the cryptocurrency Bitcoin to escape the ongoing censorship. After using PayPal for her business operations, 38-year old hemp farmer Veronica Carpio needed a new solution after the payments processor closed her account and froze her money for six months. Carpio spoke of the situation during the CryptoCannabis Conference in Denver stating: “I had my PayPal account for many years for selling my hemp products and then they just decided to red flag.—Then it was a spiral after that, and everything got frozen—Amazon, Etsy. It’s kind of ironic because we want to do legitimate business, but we are forced to lie.”
After realizing that PayPal could stunt her business operations, Carpio said she began to study blockchain technology and Bitcoin. Following this, she integrated Bitcoin into her operations using Mycelium for processing transactions. Carpio said it was easy to use Mycelium’s software and integrate Bitcoin into her shop’s infrastructure, but getting people to use the digital currency was a little harder.
After discovering Bitcoin’s censorship-resistant features, Carpio said it was still difficult for old school hemp farmers to understand. Some people had the notion that bitcoin was “illegal, imaginary and really doesn’t work,” Carpio said. So Caprio took things further by co-founding an educational resource: “1620 Solutions”. The consulting operation outlined the many benefits of cryptocurrency such as no bank accounts required, no third parties, lower processing fees, and more. The platform has come up with a step-by-step solution for cannabis operations to integrate bitcoin.
Carpio’s co-founder Edgar Hamm, a biodynamic hemp farmer, believes 1620 Solutions is an excellent alternative to the cannabis banking problem. “If we’re going to move toward a future that is actually sustainable then we need to move towards things like Bitcoin. It moves everything back to local,” Hamm explained.
With Bitcoin, the future is bright because it offers a system that doesn’t judge businesses by their operations. The network runs 24/7 without a government, corporation, or boardroom controlling its transactions. Bitcoin is the peer-to-peer solution for the cannabis banking problem that takes the money out of the hands of central banks and bureaucrats. Thanks to individuals like Veronica Carpio, Edgar Hamm, and educational sources like 1620 Solutions, cannabis farmers can evolve their business operations and maintain their livelihood.