Bitcoin: the ideal payment system for a thriving cannabis industry

In recent years, the world has witnessed an unprecedented consolidation of power and wealth, with governments, major banks, and “Big Pharma” joining forces to concentrate ever more power and weaken households and family-owned businesses. At the very heart of this issue lies money. Or rather, monetary policy. Why? Let’s take a closer look.

A deeply troubling concentration of power

The challenges facing the cannabis industry predate the COVID-19 era. The cannabis community has always been concerned about corporate takeovers and consolidation, even before legalization. Many industry players fear that it will become like “Big Ag,” “Big Tobacco,” or “Big Pharma.” This fear is becoming a reality as consolidation unfolds before our eyes and many feel powerless to stop it. Access to basic financial services is a struggle for many in our industry, and as a result, a parallel financial system has emerged as an alternative to the existing, broken system.

A biased system

The old system, based on fiat currency, is controlled by central banks and creates money out of thin air. This system distributes wealth unfairly, with the majority going to insiders while the general public bears the brunt of inflation and pays interest to the banks. Since the end of the gold standard in 1971, the purchasing power of fiat currencies such as the U.S. dollar—and also the euro—has declined significantly. This has led consumers and businesses to take on more debt to acquire the assets they need, which can be extremely difficult for companies in the cannabis industry. Add to that the additional regulatory burdens faced by companies in our industry, and we have created an environment in which small family-owned businesses cannot stay afloat, let alone turn a profit.

The trust-based system is closely linked to the principle of intellectual property, under which innovators seek exclusive rights to their «intellectual property» and any derivatives thereof in order to prevent anyone from benefiting from or modifying their work. In the context of cannabis, this system would incentivize breeders to restrict access to their cultivars and prevent other breeders from improving the gene pool, ultimately leading to the destruction of cannabis biodiversity. This also leads to predatory practices against growers who might inadvertently infringe on patents by engaging in cross-pollination with patented varieties. The fiduciary system, along with predatory exclusive practices, hinders innovation and encourages consolidation in the agricultural sector, while small farms struggle to compete in a system controlled by large corporations and the banks that finance them with printed money. This system is undeniably penetrating the cannabis industry, as I have been writing for many years.

The industry has consolidated at an alarming rate, with debt-ridden companies and “cronies” driving traditional farms out of the market while flooding it with low-quality products. This race to the bottom is a direct result of the fiat-based market system, which encourages consolidation and does not favor high-quality artisanal products. Small producers often struggle to thrive in a system that demands economies of scale and unattainable compliance requirements. Instead of consolidating the cannabis industry based on capital raising, I suggest that a Bitcoin-centric industry would reward producers based on the quality they bring to the market, rather than the size of their operations. How?

A new paradigm: a currency with a limited supply, just like nature

Although many may still view cryptocurrencies with skepticism, I am convinced that the use of «sound money»—in this case, Bitcoin—solves many of the problems described above. Sound money is limited in supply and therefore retains its value over time, thereby rewarding work and innovation. Bitcoin, as a decentralized and limited currency, offers a viable alternative to infinite fiat money. It separates money from the state and from corrupt politicians and central bankers, while securing transactions between parties without the need for intermediaries. Bitcoin is not subject to the inflationary pressures of fiat currencies and is designed to increase in scarcity over time, rewarding delayed gratification and long-term thinking.

By using Bitcoin, breeders and producers can be paid in a currency that allows them to focus on their work without having to get involved in patent wars or defend their intellectual property against the strategies of large agribusiness and pharmaceutical companies.

Unlike the agribusiness giants, which patent their genetic material and then sue neighboring farmers when their fields are cross-pollinated, in the case of cannabis, the Open-source breeding is undoubtedly the strategy the most appropriate intellectual property (IP) protection for small-scale breeders and farmers. Engaging in a patent war with limited resources is often a losing battle from the start, simply because obtaining a patent on your variety (as a breeder) does not prevent anyone from using your genetics. It simply gives you a legal basis to hire a law firm and sue the infringer, which means you need to have cash set aside, funds raised from investors, or bank loans. If the other party has deep pockets, it’s very easy for them to bankrupt you through legal proceedings. They literally turn your intellectual property (your patent) against you. It’s a game where whoever is closest to the money printer (through grants and tax credits, investments, or loans) always wins.

Bitcoin offers an alternative solution by allowing breeders and producers to be paid in a currency that appreciates in value and preserves the value of their work. “Hard money.” Bitcoin protects their identity and allows them to conduct transactions with anyone in the world, without needing authorization from intermediaries. Bitcoin gives breeders the opportunity to focus on their craft and generate income based on the quality of their genetics, rather than defending intellectual property to collect perpetual royalties. Because breeders and producers shouldn’t have to get close to the money printer to thrive.

In addition to promoting financial independence, Bitcoin also addresses the issue of transaction settlement, which is a key challenge for businesses operating legally in the sector that have been excluded from the traditional banking system. Many of these businesses have had to rely on cash transactions, which pose practical and security challenges. The instant, trustless settlement of Bitcoin transactions between parties offers a safer and more efficient way to conduct transactions, without relying on banks or payment processors. This eliminates the need to pay (often exorbitant) processing fees and allows businesses to operate independently rather than relying on financial institutions that have historically been hostile to the cannabis industry.

Conclusion

Strainly has been using Bitcoin as a payment gateway for over a year, and we’ve found that this strategy is not only feasible but also liberating.

Of course, it’s worth exercising caution, and skeptics will undoubtedly be nervous about the price fluctuations and widely publicized «crashes» in the crypto markets over the past few years. The fact that Bitcoin is still in the early stages of adoption and is not yet widely used as a medium of exchange or store of value contributes to its volatility. This currency has only existed for 15 years and is the only truly decentralized form of money, which can lead to more pronounced price movements since there is no entity to stabilize the market. As more and more people become familiar with and use Bitcoin, its price is expected to become less volatile. It should be noted, however, that since its creation, Bitcoin has appreciated far more than any other asset.

In conclusion, I believe Bitcoin is the obvious solution for the cannabis industry. If you believe in decentralization, open-source technology, resilience, and biodiversity, Bitcoin aligns perfectly with these values. It offers a robust monetary system that promotes financial autonomy, a fair distribution of wealth (which must be earned and cannot be printed out of thin air), and which, ultimately, protects biodiversity by fostering a long-term vision. It resolves transaction settlement and allows breeders and producers to be rewarded for their work, focusing on quality rather than engaging in patent wars and defending artificial barriers to entry. Ultimately, Bitcoin enables family-owned businesses to be self-sufficient, free from the constraints of a failing financial system.