According to a Cowen & Co report, 10 years from now the legal cannabis industry will be worth $50 billion. Just to put this in perspective, that’s a quarter (!) from another, very popular industry, which by the way also dealt with prohibition – alcohol.

Now, imagine a $50 billion industry with no access to banking. A Marijuana Business Daily survey revealed that 60% of all cannabis companies do not have a banking relationship. 54% of marijuana retailers and 81% of wholesale cultivators do not have bank accounts.

Contrary to popular opinion, banks aren’t prohibited from accepting money from legitimate marijuana related businesses. However, federal regulation and the fact that manufacturing and distribution of marijuana remains illegal under the Controlled Substances Act, makes mingling with the cannabis industry a risk that the banks are simply not willing to take. According to Bloomberg, out of America’s 7,600 banks and credit unions, only 220 provide some level of service to cannabis related businesses, and as one may imagine – at a rather high cost.

As a result, although legalized, the marijuana industry has effectively become a cash-only business, increasing costs, complicating transactions and worst of all – spiking violent robberies, some of which with fatal outcomes.

PotCoin: Banking for the Cannabis Industry

Much like BitCoin, PotCoin is a cryptocurrency, except it was designed to solve the multi-billion dollar issue of a particular industry. Here’s how.

Extremely low costs

The few merchants who have gained access to a bank end up paying a sour rate to offset the bank’s risk in accepting their money. Merchants who accept PotCoin on the other hand, only pay 0.0025%.

Secure

Unlike credit cards or PayPal, PotCoin transactions are irreversible so merchants aren’t exposed to fraud and chargebacks. The developers have invested quite a bit in making sure their encryption is solid, and the coins can be stored in the PotWallet, which has several layers of security.

Instant transactions

Bitcoin’s current block time (read transaction time) is about 10 minutes. Because PotCoin targets a specific industry and because its ledger is much smaller, it’s block time is just about 40 seconds, which makes transactions almost instant.

Ideal timing

With the legalization of marijuana gaining momentum, the timing for PotCoin could not be better. The supply is capped at 420 million coins, more than half of which have already been mined yet the price has remained steady and relatively low.

Industry and community specific

Although PotCoin is similar to Bitcoin in that it can be used to pay for anything, trade or buy-and-hold (PotCoin yields a 5% return when held in the PotWallet), there’s one key differentiator. It targets an industry, which is not only very lucrative, but driven by a very strong and united community. Don’t underestimate the power of having an ideologically-driven pioneer customer base. Nobody chooses Tesla over a Maserati for the driving experience.

Only the beginning

Earlier this month Potcoin announced that it will be releasing its Wallet App for iPhone, Android and Windows devices by the end of 2016. The team is also working on a comprehensive app which will include a social platform, user marketplace, legal database, buying and selling of coins, and more. There’s unconfirmed information that PotCoin has managed to recruit some premium talent from the Valley, as well as drawn investors.

Holding strong

PotCoin first launched in early 2014, got a bit of attention and then moved in the shadows. Yet it never got delisted from Poloniex and kept a pretty steady volume until this month, when the price nearly doubled and volume was just shy of that in 2014.





The banks are surely not going to stay away from this lucrative business and will most likely catch up at some point. Yet, with the cannabis industry and legalization being in its rather early stages of expansion, this time might not be very soon. Until then, watch PotCoin.