The cannabis industry is officially one of the fastest-growing industries in modern times. So is cryptocurrency.
“Very few consumer industry categories reach $5 billion in annual spending and then post anything like 25% compound annual growth across the following five years. Cable television came close, growing 19% annually in the late 1980s as national networks like CNN and HBO proved to be wildly popular.”
– Arcview Group, The State of Legal Marijuana Markets 5th Edition
As the barriers to consuming cannabis come down (we are focusing mainly on medicinal and wellness use rather than religious and recreational use), Africa will likely become a major cultivation hub for cannabis globally. This will be driven by Africa’s favorable climate, competitive labor, low land costs, low regulatory costs, indigenous knowledge of the plant, and a host of other permanent advantages.
Today, running shoes are manufactured in Vietnam and branded “Nike” or “Adidas” or “Salomon” in North America or Europe. Similarly, we expect cannabis to be cultivated in Africa and possibly branded closer to the main customer base.
In theory, many Africans can benefit from a legalized cannabis industry. However, the cost of getting involved in the highly regulated medicinal cannabis cultivation industry runs into millions of dollars – out of reach of the vast majority of Africans.
This is where cryptocurrency can play a vital role. By tokenizing participation in medicinal cannabis businesses, the entry cost can be brought down to a few dollars. This level of democratization cannot even be achieved by traditional stock exchanges: The cost of maintaining a shareholder on a traditional share register is substantially higher than the cost of maintaining a coin holder in the blockchain.
For most people, including those who live in repressive countries where the cultivation of cannabis is restricted or prohibited, a cryptocurrency that gives exposure to the potential profits from medicinal cannabis cultivation in Africa may be the only way they can participate directly in this exciting industry. And they can participate without lifting a finger higher than the click of a mouse. Then they will have truly hit the sweet spot – or the sweet “pot.”
Another major area of application for blockchain technology in the cannabis industry is seed-to-sale tracking. Tracking is not only essential for regulatory purposes; for example, customers demand to know exactly where the products they are buying come from to ensure that the suppliers of the products apply fair-trade policies. The transparency and real-time nature of the blockchain mean that immediate and complete reporting – to regulators and customers alike – of everything that went into manufacturing a cannabis product is possible. It can be a seamless part of the producer’s operations.
Companies that understand and take advantage of the match between cannabis and crypto and the opportunities presented in Africa are bound to become the industry leaders of tomorrow.
– Willem Jonker, COO, M2Bio Sciences Inc