Ever since the establishment of a legal marijuana market, banking has been one of the major problems facing the industry. Because cannabis is still illegal at a federal level, it’s dicey for a bank to engage in business with them. The U.S. Treasury and Justice departments said they’ll leave banks alone, provided they watch their clients and report all suspected wrongdoing, but what bank wants to responsible for that? And credit cards are a problem or the same reasons.
So, how about a smart, technologically savvy workaround loophole? That’s what PotCoin was supposed to be. The company’s solution to the industry’s banking problem was to take transactions into the digital sphere, using a cryptocurrency not unlike BitCoin, but specific to the marijuana field.
The startup made a few waves back in 2014 when it launched, but after a little hype it more or less petered out. As of right now, there are only 14 businesses which accept the cryptocurrency: four in the United States and ten more scattered seemingly randomly around the world including a few in Spain, one in Amsterdam, and another in Nigeria, as per the company’s website locator.
But the startup, which has new leadership and claims a new influx of investor funding, says it’s on the verge of mounting a brand new campaign to give hope to the cannabis industry. PotCoin’s chief technology officer told Leafly recently that the company is about to make public announcements about improvements made to the system.
The problem with the last iteration of PotCoin “as a lack of IT manpower,” according to David Amitrano, the firm’s CTO. (Amitrano isn’t his real name. Like many in the cryptocurrency game, PotCoin’s people try to stay off the radar).
After this year’s election, several new markets will be opening up in the U.S., which means there will be an even greater need for banking alternatives like PotCoin. And the company is promising that transactions used with its service can be completed in only 40 seconds, which is lightning fast compared to ten minute BitCoin transactions.
A fast transaction time and increased support of the industry could buoy a service like PotCoin into success, according to Shad Ewart, a professor of cannabusiness in Maryland who spoke with Leafly. But Ewart also said that the only way customers will sign on is if the businesses do so first. “I’m a little leery,” he said. “They need to get more merchants on board. If they do that, the people will follow. Because why would I want PotCoins if I can’t use them?”