The cannabis industry may offer clues to the future of bitcoin. Although medical use marijuana is now legal in more than half the states and recreational use is in some others, the drug is still illegal on the federal level. As a result, most major banks shun the marijuana business. The cannabis industry, projected to grow to $50 billion from $6 billion by 2026, has long been in need of a financial solution. Many in the industry are hanging their hopes on cryptocurrencies. Technology companies like SinglePoint and POSaBIT are working to generate a payment method for dispensaries and consumers using bitcoin. In recent years, some cryptocurrencies have cropped up specifically for cannabis transactions, like PotCoin and HempCoin. Before bitcoin was dominating headlines with its spectacular runup, there were people using it to buy illegal drugs. But now, ironically, some people in the marijuana industry are hoping bitcoin will bolster its legitimacy. "That reputation is being turned around," said Wil Ralston, president of SinglePoint, which is creating an app called "SingleSeed" in which consumers and dispensaries can exchange bitcoins. Some even say that the cannabis industry can lead other businesses to embrace virtual money.

An alternative to banks

While the number of banks that will work with medical marijuana companies is growing — estimated to be around 500 today — the majority still don't. Another complication for most dispensaries is that they can't access typical merchant services, which companies need to accept credit or debit cards. There is no "cannabis" store identification, as there is with a flower shop or restaurant, and so most dispensaries remain cash only. In 2014, SinglePoint, a mobile app payment company, placed terminals in medical marijuana dispensaries, in which people could use debit cards to make their purchases. "They were going great," Ralston said. "Then overnight the banks shut them all down. There were no guidelines about how banks were supposed to interact with the cannabis industry. They didn't want to risk it." Ralston said the attitude around cannabis at most banks remains: "We don't want to even bring up that word in our bank." And so, he said, "we had to stop, and say, what other solutions are we going to provide?"

A vendor weighs buds for card-carrying medical marijuana patients. Frederic J. Brown | Getty Images

Ralston and others at SinglePoint started looking into cryptocurrencies. Now, SingleSeed will allow dispensaries to accept bitcoin and consumers to pay with it. SinglePoint won't stop with pot. He said 14 percent of the population is locked out of the banking system because they don't have credit or are involved in high-risk businesses. Cryptocurrencies offer to provide these people an alternative, he said. "Blockchain is applicable to any industry," he said. "We're letting consumers know, this is just an additional way to pay."

A safer, more transparent world

"Everybody wants to discuss the solution to the financial constraints of the cannabis industry," said Bryan Meltzer, a partner at Feuerstein Kulick, a law firm that represents people and companies in the cannabis business. "Cryptocurrencies and the marijuana industry have a natural intersection." Meltzer said that in states where medical marijuana is legal, the government wants to know where the plant comes from. And all transactions need to to be recorded. Blockchain, which shows a clear trail of the virtual money, could supply that level of transparency.