The blockchain has earned itself the rightful reputation as the alternative, underlining source for wealth generation. Over the past few months, cryptocurrencies soared in popularity, primarily for its profit potential but also because they are truly free, decentralized markets. But will these same reasons drive increased valuation for marijuana cryptos?
Once an obscure, niche sector, cannabis investments, like the blockchain, has recently benefitted from an explosion of popularity. Much of the enthusiasm obviously has to do with a general shift in public sentiment. “Botanical therapies” no longer carry the same negative reputation they once did. But most importantly, the legal environment is turning a favorable eye on marijuana.
A record number of states voted for varying degrees of legalization back in the 2016 general election. In California, cannabis is completely legal for recreational use — previous medical weed certifications are no longer necessary. By logical extension, cannabis investments, including marijuana cryptos, seem like no brainers.
To some extent, validity exists for the ramped-up bullishness. Cannabis investments in the over-the-counter securities market have substantially risen in value. And prior to the broader collapse in cryptocurrencies, marijuana cryptos enjoyed an unprecedented surge in price.
That, however, does not mean an investor should jump blindly towards marijuana cryptos. While it’s true that these green cryptocurrencies offer tremendous anonymity, the process of buying marijuana through the blockchain isn’t completely inconspicuous. State governments that introduced new botanical measures have a vested interest in making sure that the supply doesn’t come from illegal sources.
Therefore, you can expect that recreational weed will still suffer from heavy government oversight. Moreover, introducing cryptocurrencies — which most governments already view with tired suspicion — into the sector would practically raise red flags for watchdog agencies.
I’m pretty sure that dispensaries already have enough headaches with state laws, let alone with the implications of marijuana cryptos.
We also have the sticky matter of the federal government. Marijuana is still considered a Schedule 1 drug. The Trump administration, specifically Attorney General Jeff Sessions, don’t publicly seem willing to concede on this issue.
These challenges may hinder the long-term progress of marijuana cryptos. On the other hand, a rising tide lifts all boats. With so much interest in all things blockchain, I believe the majority of cryptocurrencies will enjoy considerable profits, including marijuana cryptos.
My idea is that I wouldn’t give up on this sector; however, I will consider marijuana cryptos as speculative vehicles to carefully exploit on a temporary timeframe.