Pulled pot: How marijuana legalization in Canada will affect cryptocurrencies
In the night from 16 to 17 October Canada legalized marijuana, becoming the largest in the world licit market for the substance, which remains illegal in most countries. In addition to countless jokes in the spirit of “pulled grass”, the media began to draw Parallels between the new legal status of cannabis in Canada and “the cryptocurrency madness” of the end of 2017.
The share price of the company Tilray, medical marijuana producer in British Columbia, for the past month remained volatile. On September 19, it reached a peak of $214, and then to 24 September has dropped to $99. (Now the price is $158.) According to the Australian newspaper The Sydney Morning Herald, the price jump was so significant that the trading of shares on several occasions had to stop.
Ken Mahoney, the head company of new York asset management, said in an interview with the Herald that “only eight months ago we were like cryptocurrency”.
A former banker from Goldman Sachs and cryptocurrency “heavyweight” Mike Novogratz noted some similarities, pointing to the rising price of bitcoin and live in the area of Dec 2017.
Novogratz continues to believe that the cannabis industry has the potential for successful development in the long term — he said this at a conference Yahoo Finance All Markets Summit in September. However, he also claimed that by the end of the year bitcoin will be worth $40 000.
Besides the fact that the shares of “herbal” companies mimic the price path of the cryptocurrency at the end of 2017, there is a connection between the illegal cannabis industry and decentralized digital currencies. Last month, the Office of public safety Canada announced the intention to track how often canadian marijuana is on the grounds of darkweb.
The Management report States:
Starting in 2013, cannabis remains the most popular drug in darkwave. It accounts for up to 33% of all transactions. However, while we have no precise information about the number of illegal online transactions in Canada and shares of canadian cannabis sold on the Internet.
In 2013, Canada was one of the leading suppliers of drugs to the site of the legendary Silk Road, and the current legalization partly designed to stop the criminal sale.
In early 2014, began the process of “cooperation,” of the cryptocurrency and legal marijuana. This year, three anonymous developer from Montreal launched PotCoin — a coin designed to ensure transactions are within the legal cannabis industry, particularly in the USA, where at Federal level marijuana remains illegal, despite its permission in some States and efforts at decriminalization. This means that large banks would not support the industry, forcing sellers and buyers to look for alternatives.
After the launch of PotCoin more than 40 companies have become working with this cryptocurrency. According to the canadian Montreal Gazette, by 2016, that number decreased to 12 (maybe the reason was the questionable marketing strategy of the startup: for example, in June of this year, the basketball player Dennis Rodman sported a t-shirt with the logo of PotCoin during a visit to North Korea, sponsored by supporters of the cryptocurrency).
In December 2017 the PotCoin team has partnered with WeedMD, licensed canadian manufacturer and distributor of medical marijuana. Just as the nationwide legalization WeedMD opened education centre in Toronto, where visitors can not only buy products from cannabis, but also to learn about the different varieties and the correct dosage. However, despite the long-awaited news from Canada this week, the price of PotCoin is not growing.
The prices of other “herbal” crypto-currencies look a little better. DopeCoin and CannabisCoin has experienced this week a slight and short rise. HempCoin remains in the doghouse of consumers from September, CannaCoin price continues to fall, too.
Regardless of what happens with the “hemp” the main consequence of legalization — it is an opportunity for thousands of citizens accused of possession of cannabis, to ask forgiveness and to obtain it quickly and without conditions (in the past it was about the probationary period of five years and a significant fine). Since cryptocurrency is historically more closely linked with the illegal trade of cannabis than legal, a new favorable regime in relation to cannabis may not be the same for the cryptocurrency.
According to the materials of Breaker Magazine