Toronto Pot-Growing Company Opens Arms to Bitcoin and Altcoins
Grow Kit, a cannabis growing kit company in Toronto, Ontario, Canada, is accepting cryptocurrencies for payment. This company launched in March 2017 and strives to help “every Canadian to have the option to grow their own organic cannabis indoors all year.”
Grow Kit was founded by a 20-year-old college student who was exploring the market for indoor growing equipment after struggling with growing cannabis outdoors. This entrepreneur carried out extensive research into LED lighting, which offers low heat, “a better light spectrum, [and] a longer lifespan.” Reflective grow tents were the next focus of investigation and after the “best” light and tent companies were identified, the Grow Kit company was born as an Official Canadian Distributor authorized to sell cannabis growing kits within the country.
Canada has announced plans to legalize recreational pot use by the summer of 2018. Medical use of cannabis is legal in Canada. While in late 2017, some major Canadian banks are starting to engage with cannabis companies, others are still reluctant. “Different lenders have been quicker than others to move into this industry, but this is understandable as public perceptions are still evolving,” Basem Hanna, CEO of cannabis company TerrAscend, says. Meanwhile, choosing to work with cryptocurrency is a viable alternative to mainstream banking that companies like Grow Kit have embraced.
In the U.S., 29 states and D.C. have laws that legalize pot in some form. While legalization trends continue across the country, many U.S. banks have refused to provide services to legal cannabis businesses due to fear and uncertainty regarding federal regulation and penalization. In this absence of banking support, many weed businesses rely on cash-only sales, which greatly limits their flexibility and scalability. It also increases the risk of theft and security costs and has led some to explore the use of cryptocurrencies.
The annual Crypto Cannabis Conference (CCC) seeks to address how virtual currencies and the cannabis industry can best be integrated, billed as “the ONLY, Cannabis + Bitcoin conference.” Several virtual currencies, such as PotCoin and DopeCoin, have been launched specifically to serve the legal cannabis market.
Tokken is a mobile credit card payment app that runs on the blockchain, which was explicitly designed to serve the cannabis industry. It was founded by Lamine Zarrad, a former Marine, and regulator at the U.S. Office of the Comptroller of the Currency, and it aims to use its tokens to create a crypto-bridge between banks and pot businesses. To meet bank standards, Tokken verifies that a user can legally purchase weed. This process can include checking “mobile carrier records, gathering bio-identification data used to login to your phone or triangulating who you are based on GPS coordinates,” according to CNBC. When asked about privacy concerns, Zarrad says, “We don’t store the data.”