Banking the unbanked of the world is one of the Holy Grails for blockchain technology and could help millions of people around the globe reach financial inclusion.

However, it may come as a surprise to many that this is not just a third-world problem or that it doesn’t only affect individuals. A whole industry in the United States is currently operating completely unbanked and cryptocurrencies could save the day.

Cannabis is legal in nearly two-thirds of American states, but the industry is forced to operate without bank accounts.

This is because the US government has not effectively caught up with its own legislature on a federal level, where Cannabis is still classified as a Schedule 1 drug — alongside Heroin and Methamphetamine.

Since at a national level Cannabis is still illegal, any bank that handles Cannabis money can be charged with money laundering. So the banks stay away.

It’s astonishing that a booming industry — worth 7 billion dollars in California alone — is forced to be cash only.

A problem since 2011, it’s hard to conceive of any industry that size not having ready access to even the most basic of financial services. As the industry is expected to only grow, the ramifications of being cash only are far-reaching.

While the first thing we may think of are problems to do with physical cash exchange, companies in the Cannabis industry actually have great difficulty in many other aspects.

Such as paying their own expenses. For their own transparency, utilities, tax assessors and vendors prefer to not be paid in cash and may even refuse cash payments completely.

The IRS also actively pursues businesses who pay in cash, because negative impressions such as avoiding taxes are inherently associated with cash-only businesses.

It’s been estimated that security and cash handling expenses amount to 10–15 % of sales.

It’s not just a problem of keeping account of customer payments or production costs.

Another service banks provide is loans and companies in the Cannabis industry can’t easily raise capital the way other businesses can.

Security is another major issue. Marijuana dispensaries are an excellent target for robberies and thieves, possibly even by their own staff, due to the large amount of cash they keep on premises. They need vault, guards, security cameras and enormous amount of staff handling the money.

It’s been estimated that cash handling expenses amount to 10–15 percent of their sales.

For the company CannaCraft, security costs hundreds of thousand dollars a year and each month they burn through 12 cash counting machines to count the money.

The industry needs proactive federal action to fix its legal predicament, but Trump is openly against it.

No banking also means no payment processing, which means customers can’t use credit or debit cards to make purchases.

According to a 2016 survey, 75% of customers prefer to pay with credit or debit cards, with only 11% preferring to pay with cash.

As a result, clients have to go to unnecessary lengths to acquire the product, many of whom use Cannabis as medicine for pain, epilepsy and other ailments.

On the other hand, alcohol — proven in studies to be amongst the top worst drugs, in terms of physical, mental as well as social impact — can be purchased with ease as banks welcome their business.

The industry needs proactive federal action, such as removing marijuana from Schedule 1 of the Controlled Substances Act, to do away with its legal predicament. But all signs indicate that Cannabis will likely remain a Schedule 1 drug until the next elections in 2020 — Trump has openly ‘vowed a crack down’ on legal marijuana during his presidency.

Cryptocurrencies, such as CLOAK, can solve the plight of the Cannabis industry.

While the industry waits for Cannabis to become federally legal, IBM has pitched for the industry to use blockchain technology that would provide a secure way to track the legal sale of Cannabis “from seed to sale”.

Blockchain technology can provide a secure way to track the legal sale of Cannabis.

Blockchain, as a secure method of recording data using a digital ledger, can transparently capture the history of Cannabis through the entire supply chain, ensuring consumer safety and also exerting regulatory control.

Gathering under the same blockchain and community is a worthwhile agenda that would promote general cryptocurrency adoption as well as bring with it tangible benefits for the Cannabis industry.

But building this network is also a painstakingly slow process, that does not solve the problem the industry faces in the here and now.

Essentially a payment system and accounting issue, CLOAK seeks to be a safe and anonymous payment and ledger for unbanked industries.

CLOAKcoin is a privacy cryptocurrency for payments. It has recently taken a focus on banking the Cannabis industry and is able to offer an effective solution with a considerable already existing network and user base — that is available right now.