CANNABIS CULTURE – One of the largest problems facing the cannabis industry is the limited availability of banking options due to restrictions imposed at the federal level, industry players say.
“(These banking) problems that the industry faces, especially in the banking sector, are caused by cannabis’ legal status by federal law. (This) creates issues with banks providing services on a federal level to a lot of these dispensaries,” says Reggie Jerath, chief executive of Gather, a cryptocurrency and blockchain enterprise.
At the moment, Jerath says Gather is developing a point of sale solution for 12 dispensaries in the greater New York area. Jerath says Gather’s approach closely follows all protocols in the tightly regulated cannabis market and, “only work with businesses that are legal to operate in their state.”
“Right now, we can say that banking is an issue in all the legal states. (It) needs an urgent fix for the protection and sustainability of the industry, Jerath says.
“Most licensed operations would prefer to have normal banking and credit options.”
Very large theft risk
Legal cannabis businesses handle large amounts of cash, cannabis finance players say. It´s the federal ban that creates all-cash risks that are prevalent in the cannabis industry.
“They’re basically using a lot of cash on hand which they can’t bank on a different level. It’s a very large risk for these businesses,” says Jerath.
This not only causes dispensaries, growers, and industry participants the inconvenience of having to jump through hoops to make deposits, but also endangers employees who have to work in a business that has large amounts of cash on hand as a result.
“You have a lot of pilferage that goes on so you have a lot of theft etc so cryptocurrency from a supply chain perspective, can help mitigate the risk of theft, and pilferage going forward.”
Turning profits into crypto & dollars
So, simply, Gather works by providing an on-site BTC ATM network where legal profits can be turned into crypto and then converted into dollars.
“Through point of sale technology developed by our consultancy branch Gather Enterprise, it will collect cash from the sale of GTH (Gather Network’s Coin) and the POS network will deposit the cash into its own bank account,” he says.
In short, Gather assists businesses in tokenization, facilitating their access to blockchain technology and helping them develop a variety of business solutions for their day-to-day operations.
“Our work with the cannabis industry took off on these terms, as we have seen a major problem arising in the legal states”.
For finance players like Gather who are trying to simplify banking for cannabis companies, the current biggest efforts are geared towards moving away from the cash model that cannabis traders use because of the federal to a more POS and digital payments model, bringing more security and transparency to the industry.
Though blockchain banking, like Gather´s, can be ported to any cash-heavy businesses – players like Gather are keen to see movement at the federal level – first.
