Cannabis & blockchain: Bad romance or a perfect match?

Gowling WLG | Shaela W. Rae | October 17 2018

coins being watered - Cannabis & blockchain: Bad romance or a perfect match?Black market. Dark web. Illicit. Underground market. Illegitimate. Illegal. Organized crime. All words used to describe the illegal cannabis industry, until October 17, 2018 that is. Once it is legal to buy, possess or use cannabis for recreational purposes the discussion around the use of cannabis and how to procure it changes from hushed words in a corner to an open conversation in public. But is the public ready to embrace a substance that has been seen as illegitimate and "bad" for so long? If the experience in the US can be relied upon, the answer is "yes".

According to investment bank Cowen & Co., the cannabis industry is expected to reach sales of approximately US$75-billion by 2030, up from US$6-billion in 2016, as the drug is more socially accepted. In the US today cannabis is illegal on a federal level as it is classified as a Schedule 1 narcotic, but cannabis is legal in 30 states for medicinal purposes, and in 9 states and Washington, DC, for recreational use for adults over the age of 21.

See:  Canabis Company True Leaf Raises $14 Million in Cross Border US – Canada Crowdfunding Offer

Some Canadians' views on cannabis seem to be similar to the views on alcohol during the prohibition era in the United States. For example, in the prohibition era people used slang terminology to describe alcohol, similarly how the terms, "weed", "pot" and "dope" have been used to describe cannabis. Alcohol was attributed as a cause of moral decay and criminal activity. Academics have debated whether alcohol caused an increased criminal activity during that era, as well as whether there actually was an increase in crime or rather just a perception of an increase in crime. Some cannabis anti-legalization protestors believe that the cannabis industry is surrounded by crime since they view cannabis as a gateway drug that will lead to illegal drug use and illegal activities.

The question is, how can the cannabis industry gain more transparency and legitimacy? While legislation and regulation is turning an illegal industry into a legitimate one, blockchain technology may be able to help. Health Canada's tracking system is designed to track the plant from where it is grown to where it is sold to prevent legal cannabis from being diverted to the illegal market. While the tracking system is not based on blockchain technology, blockchain may be one technology that could help cannabis companies comply with the legislative reporting requirements.

Like cannabis, the blockchain industry has also suffered from a stigma, often arising from a fundamental misunderstanding of how the technology works, paired with a conflation of concepts and terminology such as blockchain, cryptocurrency and Bitcoin. Cryptocurrencies and anonymous buyers are often found in the same sentence as dark-web markets and illicit activity. Given this narrative, the natural inclination is to assume that partnerships between the cannabis and crypto worlds are a recipe for bad news in a domain that requires more transparency, not less. But there is a major flaw in this line of thinking, and here it is in simple terms: crypto ≠ blockchain ≠ Bitcoin. Just because some bad guys use cryptocurrency to do bad things, doesn't mean it is inherently evil. If that were case, we would have to conclude that money in general is inherently evil.

See:  U.S. pot industry: High tech, high finance, and high times

Blockchain, a general term for the distributed ledger technology upon which cryptocurrencies such as the popular Bitcoin (one type of cryptocurrency out of hundreds) are built, is completely legal, completely legitimate, and in fact, may be considered one of the most important technological innovations of the past decade. Blockchain offers a new way to store and record data in such a way that its accuracy is constantly confirmed by all stakeholders, and transactions are able to take place automatically and instantly. In theory, what makes blockchain so valuable is that its inherent design structure makes it an immutable, accurate record of transactions that is virtually tamper-proof.

What does this mean for the cannabis sector? Despite the legalization of recreational-use marijuana on the horizon in Canada, many major financial institutions still won't touch the cannabis industry, leaving players in that world to rely mostly on untraceable cash transactions. What better way to introduce security and transparency into the cannabis sector than by integrating payment platforms based on blockchain technology?

Continue to the full article --> here

 


NCFA Jan 2018 resize - Cannabis & blockchain: Bad romance or a perfect match? The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

Latest news - Cannabis & blockchain: Bad romance or a perfect match?FF Logo 400 v3 - Cannabis & blockchain: Bad romance or a perfect match?community social impact - Cannabis & blockchain: Bad romance or a perfect match?
NCFA Fintech Confidential Issue 2 FINAL COVER - Cannabis & blockchain: Bad romance or a perfect match?

Fortunly | Biljana Nikolovski | Aug 23, 2019 The figure of home-ownership in Canada is one of the highest in the world, even though the number of people who own residential property in the country slightly dipped from 69% in 2011 to 67.8% in 2016. But, the portion of the Great White North’s population with debt repayment woes has been increasing at an alarming rate. In fact, a 2018 report revealed that 19% of seniors still have an unpaid mortgage. As a result, 20% of Canadians continue to work well into their golden years. Certainly, a basket of solutions is necessary to help ensure that mortgages in Canada run their course, allowing homeowners to be free and clear come retirement. Fortunately, fintech solutions are here to the rescue. According to Fortunly, peer-to-peer (P2P) lending and decentralized finance (DeFi) are some of the newest innovative models with great potential to help more Canadians, including seniors, reduce their overall cost of borrowing and to better manage debt repayment. P2P lending enables an individual to borrow money from another individual and it allows both parties to seamlessly interact with one another through a digital platform. This is beginning to invade the mortgage space ...
Read More
demand for Altfi models surges - Cannabis & blockchain: Bad romance or a perfect match?
NCFA Canada | Aug 9, 2019 JOIN US ON A STORYTELLING JOURNEY EVERY FRIDAY. Aug 23:  Techfins with Michael R. King, PhD CFA EP36 GUEST:  MICHAEL R. KING, PhD CFA, Lansdowne Chair in Finance, Gustavson School of Business, University of Victoria, (Linkedin) HOST: Manseeb Khan, Fintech Friday's show host BIO:  Professor Michael R. King is the Lansdowne Chair in Finance at University of Victoria’s Gustavson School of Business. Prior to joining UVic, he held the Tangerine Chair in Finance at Western University’s Ivey Business School (2011-2019), where he co-founded Canada’s first FinTech research centre (the Scotiabank Digital Banking Lab). Before joining academia, he worked in investment banking in Zurich, New York and London from 1990-1998 (Credit Suisse, RBC Dominion Securities) and central banking in Ottawa and Basel from 2001-2011 (Bank of Canada, Bank for International Settlements). Michael completed his PhD at the London School of Economics in 2001 and his CFA designation in 1999. He has taught finance to undergraduates, MBAs and executives. His research focuses on FinTech, banking, international financial markets, and corporate finance. About this episode:  On this episode of NCFA's Fintech Friday's Podcast, our host Manseeb Khan sits down with Prof. Michael R. King PhD CFA, Lansdowne Chair ...
Read More
FF EP36 Michael King 1 1 - Cannabis & blockchain: Bad romance or a perfect match?
About NCFA Canada | C. Asano | August 23, 2019 TORONTO, Aug 23, 2019 – The National Crowdfunding & Fintech Association of Canada (NCFA) today announced that Paul Schulte, Founder and Managing Editor of Shulte Research in Singapore, has joined the Association`s international Advisory Board to advise in the areas of Banking and Financial Services (profile). Paul's roles in banking & financial services in the past 30 years include equity & fixed income research (buy & sell sides) in emerging markets. In recent years, technology has evolved rapidly to challenge all facets of financial services his core belief is: Liquidity & credit are everything; get bank liquidity & solvency right and the rest follows. Aside from being the founder & editor of Schulte Research, he has taught for 18 years IN MBA programs: Tufts, HK UST, HKU, LMU Hilton School in LA & SUSS in Singapore. He has also worked for the Number 1 investment bank from Switzerland, US, UK, Japan, PRC & Holland starting in 1990. Paul has been a source for the WSJ, NYT, Bloomberg, Nikkei, FT, Economist, Barron’s & Forbes. His clients include some of the largest sovereign, pension, mutual and hedge funds globally. He served as ...
Read More
Paul Schulte 150x150 - Cannabis & blockchain: Bad romance or a perfect match?
Schulte Research | Paul Shulte | Aug 21, 2019 China is barreling forward on reforms and rolling out the crypto currency. It will be the first central bank to do so.  This will give added momentum to Libra. Libra could become a new anchor market for global IPOs. Take this seriously. Join if you can.  I’m pretty sure I’m right that it has backing from the very top of the US govt. 1. Cryptocurrency — The China coin is due to be rolled out in November. I hear that the distribution of the coin will be limited to 7 players: The big banks: CCB, ICBC, BOC, ABC. Alibaba and Tencent.   Positive momentum,,, Union Pay.   Interesting — to keep this alive. All others will be secondary.  The PBOC head did on SUnday make an explicit reference to Libra. As I suspected, China rightly sees Libra as a challenge to China’s early commanding lead in e commerce and payments in all of Asia and through the Silk Road. It clearly is.   Interestingly, HSBC and Stan Chart are cut out. No foreign banks in the consortium.    No foreign firms in Libra (except, weirdly,  Mercato Libra from Arge). 2. China ...
Read More
China coin crypto - Cannabis & blockchain: Bad romance or a perfect match?
NCFA Canada | Craig Asano | Aug 20, 2019 TORONTO, ON Aug 20, 2019  The National Crowdfunding & Fintech Association of Canada (NCFA) is pleased to announce that the Exponential Group (Exponential Ventures, Exponential Capital and Exponential Markets) has joined NCFA as an industry partner. NCFA's industry partners are builders, investors and innovators who have provided a significant level of service and/or contribution towards the sustainability and growth of NCFA and related fintech sectors globally.  We encourage the fintech ecosystem to support and collaborate with NCFA's global network of industry partners by engaging directly with their ventures of mutual interest. "Since founding NCFA in the summer of 2012, one of it's core missions has been working with communities of change that are passionate about enabling inclusive opportunities for 'big vision' companies seeking to change the world but need access to capital and resources to innovate competitive products and services that otherwise may not exist.  These companies often focus on new economies of scale that look beyond 'for profit' models alone.  Supporting and leading this change by developing new infrastructure and partnerships while leveraging new technologies can be a beacon of light resulting in massive transformation and change." - Craig Asano, ...
Read More
ExpoG logo final600 - Cannabis & blockchain: Bad romance or a perfect match?
MIT Technology Review | Mike Orcutt | Aug 15, 2019 Complying with regulators could mean the difference between going mainstream and remaining forever on the margins of the global financial system. One of the biggest knocks against cryptocurrency has always been its status as a refuge for tech-savvy criminals. Even as some bigger players—particularly exchanges that handle many billions of dollars in crypto-wealth each day—have gone out of their way to play nice with regulators, the image persists, in part because some crypto firms have evaded regulators by moving to jurisdictions that are less strict.  But the end of the lawless era may be nigh. A new set of global anti-money-laundering rules aimed at cryptocurrency exchanges has been handed down by the Financial Action Task Force, an intergovernmental organization that sets standards for policing money laundering and terrorist financing. The rules, which call on exchanges to share personal information about their users with each other, are controversial. Many cryptocurrency enthusiasts think the privacy that drew them to the technology could evaporate. On the other hand, complying with the rules is likely to make the industry more attractive to mainstream financial institutions and users. In other words, cha-ching. See:  A Global ...
Read More
money laundering rules - Cannabis & blockchain: Bad romance or a perfect match?
Pryor Cashman | Jeffrey Alberts and Dustin N. Nofziger | Aug 13, 2019 The Federal Reserve Board has announced plans to develop a real-time payment service that should appeal to FinTech companies and community banks. The Board announced last Monday that it will develop a new round-the-clock real time payment and settlement service to support faster payments in the United States. This new real-time gross settlement (RTGS) service, which will be known as the "FedNow Service," is anticipated to be available in 2023 or 2024. The Board is currently soliciting comments on all aspects of the proposed service in order to finalize its design and features. The Board's intention to operate a RTGS service is a win for community banks and FinTech companies, although it may threaten those FinTechs with business models centered around providing real time payments. The Board's plans were not developed in a vacuum. The Clearing House (TCH), which is owned by 30 of the world's largest commercial banks, previously rolled out a RTGS system known as the "RTP network" in November 2017 – some six years before the Board anticipates that its FedNow Service may first become available. The RTP network reportedly cost over $1 billion ...
Read More
cash payments - Cannabis & blockchain: Bad romance or a perfect match?
Forbes | Ron Shevlin | July 1, 2019 OBSERVATIONS FROM THE FINTECH SNARK TANK A Seeking Alpha article titled Why Fintech May Not Be Fit For Public Consumption states: The year 2019 seems set to be a record-setting one for venture capitalist exit value capture by means of tech IPOs. But fintech doesn't seem to be a part of this picture. VCs are certainly putting money into fintech startups. There were 170 financings in the US in the first quarter of 2019. But, as Pitchbook says, 'not one of the most valuable fintech companies in the world seems particularly close to an offering.' " The article chalks this up to three primary causes: 1. Poor IPO performance in 2018. According to the article, "One reason nobody is in a hurry to go public is that the results of the last crop of fintech concerns that did go public have been unimpressive. Adyen and IntegraFin are prospering, but neither GreenSky nor EverQuote is "lighting up the heavens" according to Seeking Alpha. See:  OurCrowd Double IPO Success Provides Crowdfunding Validation 2. Mega-round financing. Seeking Alpha postulates that investor interest in mega-rounds--e.g., Qatar Investment Authority's investment of $500 million in SoFi and Tiger Capital leading a round that raised $300 ...
Read More
fintech IPO shortage - Cannabis & blockchain: Bad romance or a perfect match?
CNBC | Kate Rooney | Aug 12, 2019 Money spent in venture capital and other alternative investments is surging as investors look for riskier, but higher-yielding investments. The trend coincides with relatively low returns from more conventional Wall Street investments such as stocks and bonds, and a drop in the number of publicly traded companies. “In a world where big institutional investors find themselves starved for returns, it’s not surprising that they have steadily increased allocations to private markets and you’ve seen capital continuing to flow into the asset class,” says McKinsey Partner Bryce Klempner. Many global investors are turning toward Silicon Valley instead of Wall Street in search of returns. The total invested in private markets hit all-time highs last year and continues to break multi-decade records this year. In the first half of the year, total investments in venture capital hit a 19-year high of $53.3 billion, according to data from Refinitiv published last week. That marked a 21% increase by total dollar amount compared to the first half of 2018. See:  $5 million Equity crowdfunding extended to private companies The steady stream of funding comes alongside a drop in the number of publicly listed companies, rock-bottom global ...
Read More
unicorn - Cannabis & blockchain: Bad romance or a perfect match?
TechRepublic | Mary Shacklett | July 23, 2019 Learn how artificial intelligence and analytics can be used to improve customer service in banking. When I was a CIO for a financial institution, I worked with executives on the operations side to see how we could improve relationships with customers at our branches. Our front-line tellers at these branches were more like order takers—they did what customers asked, but no more. These employees were in low-wage positions, and they often had limited skills. One of the skills we wanted was interpersonal engagement with customers that you would typically find in a salesperson. We decided to hire people with retail and/or people-facing experience, figuring that we could train them to be tellers. We implemented systems that would prompt a teller to ask a customer about new products the customer might be interested in, and we offered financial incentives for enrolling customers in new products. The experiment yielded mixed results and likely would have gone better if we'd had some of the analytics and artificial intelligence (AI) automation tools that are available today. See:  How Jack Ma’s $290b SME credit engine is changing Chinese banking "Most customers tend to keep their accounts with ...
Read More
banking with AI - Cannabis & blockchain: Bad romance or a perfect match?