Absent Federal Banking Support, Cannabis Market Shows Growing Interest in Proprietary Bitcoin Payment Solutions

NetworkNewsWire Editorial Coverage: The legal marijuana industry continues its impressive growth, despite the inability to access a wide range of banking solutions, given that cannabis is still classified as a Schedule I substance by the Federal government. Similarly, bitcoin is a booming market, recently hitting an all-time high of $3,000¹ per unit. These two fast-growing markets are already working together, providing investors with significant and diversified opportunities. Several companies, such as SinglePoint, Inc. (SING), First Bitcoin Capital Corp. (BITCF), Epazz, Inc. (EPAZ) and Bitcoin Services, Inc. (BTSC), are focused on innovative bitcoin-based payment solutions to benefit the legal marijuana industry and provide large market players such as Hemp, Inc. (HEMP) with the necessary financial tools to profit and thrive.

Because of federal regulations barring traditional financial institutions and credit card companies from offering their services, the booming marijuana industry, with almost $7 billion in reported sales² last year, is facing a massive cash flow problem. Cannabis merchants are forced to accept cash-only transactions, which create a constant security threat and accounting issues, further limiting most companies’ ability to grow and expand their business. More and more marijuana businesses are therefore turning to bitcoin solutions as a buffer that allows customers to use their credit cards for purchases. With bitcoin a developing and volatile vertical, cannabis companies are looking toward proprietary bitcoin payment solutions developed specifically for the marijuana market.

This is where specialized holding company SinglePoint, Inc. (SING) comes in. The mobile technology provider is developing (http://nnw.fm/2wJlF) a proprietary bitcoin exchange system aimed at solving payment processing issues in high-risk markets including the cannabis industry. This in-house solution will allow consumers to obtain bitcoin at any point of sale and will be available for use to any legal marijuana business in the 29 states and the District of Columbia where cannabis has been legalized. The proprietary system is built for SinglePoint by TopTal, a San Francisco-based freelance engineering company, and is designed to make instant Bitcoin-based purchases for customers who want to use their credit or debit cards instead of cash.

In development since 2014, the new system is KYC-AML-compliant and will be the first of its kind to be used across the United States, with similar solutions already being implemented abroad, according to SinglePoint. The bitcoin exchange is designed with simplicity in mind in order to make the customer experience as easy as possible. Consumers can sign up directly at the point-of-sale or set up an account online before the purchase, swipe their cards and pay, just as they would with any regular card payment.

“With the currencies new found consumer adoption we believe this is the time to execute and we are doing that in a big way. We have employed an expert and he has architected exactly what we need. Sign up, Swipe and Pay. At the end of the transaction if there is left over Bitcoin the consumer walks away with it. The bottom line is, it's easy and almost gives the customer the same experience they are used to using every day," Wil Ralston, president of SinglePoint, stated in a recent press release.

Being an early mover in this segment offers SinglePoint a major opportunity for additional revenue from transactional and platform fees, and to position itself to tap into a largely underserved market.

Aside from the bitcoin system, SinglePoint offers a wide range of marketing and payment processing solutions and services to the legal marijuana industry via subsidiary SingleSeed (http://nnw.fm/3JAie). A recent online audio press release (http://nnw.fm/Kzrh2) illustrates how management is steering SinglePoint’s transition into a diversified holding company. As part of its acquisition-based growth strategy, the company also acquired Convectium, a provider of equipment, branding and packaging solutions that manufactures a highly innovative cartridge and vape pen oil filling system - the first such system available for wholesale distribution to dispensaries. The acquisition, along with SingleSeed services and its development of bitcoin technology for the industry, has given SinglePoint an edge with investors in the legal marijuana market, enabling it to grow at an accelerated rate and put together the capital needed for further development.

Furthermore, SinglePoint partnered with First Bitcoin Capital Corp. (BITCF), a provider of blockchain and bitcoin technology. The two companies have a joint-venture agreement to build and distribute the best bitcoin solution available for the cannabis industry and other high-risk markets. Described as the world’s most prolific issuer of digital currencies, First Bitcoin Capital is the first publicly traded bitcoin entity, with plans to vertically consolidate each segment of the cryptocurrency space. After acquiring control of the world’s first cryptocurrency ETF, AlphaBIT, in July, the company is set to make history again by becoming the first to pay dividends to shareholders in the form of cryptocurrency, according to a recent press release (http://nnw.fm/o5Y9u).

Another bitcoin-based payment system for the fast-growing cannabis industry comes from cloud-based software solutions provider Epazz, Inc. (EPAZ). Launched three months ago, Epazz’s Zenpay system is based on a unique cannabis payment software that allows consumers to use the cryptocurrency for easy store purchases while offering complete anonymity – the consumer would not be required to share his or her name or personal details. Currently in beta testing, the Zenpay system can be seamlessly integrated with merchant stores’ flow and, thus, help fill the industry’s need for a reliable payment solution. Epazz expects the system to start generating revenue later this year, as it can be licensed to vendors in several states.

Bitcoin Services, Inc. (BTSC), the first blockchain-focused U.S public company, has taken bitcoin-based payment solutions one step further by creating an online marketplace where the cryptocurrency can be exchanged for goods and services. The online shop covers multiple verticals, including health and fitness, real estate, automotive, electronics, apparel, catering, etc. and is available for users all over the world. Bitcoin payments can be made without requiring any personal information, thus offering enhanced protection against identity theft. In addition to this massive marketplace, Bitcoin Services is developing a new cryptocurrency wallet that will allow users to store multiple digital currencies and has also begun mining Monero - one of the top digital currencies with a market cap of more than $300 million.

These innovative bitcoin-payment solutions can greatly benefit the cannabis industry at large, including major players such as Hemp, Inc. (HEMP), a provider of hemp-based products and services to the recreational and medical marijuana industries, as well as owner of a website providing related news and entertainment. Hemp recently got one step closer to its long-term goal of becoming the leader of the U.S. industrial hemp industry by opening its own processing facility (http://nnw.fm/XwRm8). The 70,000-square-foot hemp mill located in North Carolina is the result of three and a half years of hard work and an investment of millions of dollars. The facility is the largest in North America and has already started processing its first product, marking the start of a new chapter in the company’s journey: to focus on marketing efforts and enhance its production capabilities to meet rising demand.

In the absence of other payment alternatives and access to the federal banking system, the legal marijuana industry will have no other solution but to expand its use of bitcoin as a bridge between consumers and cannabis services. Involvement in this vertical will make both cannabis merchants and payment solution providers more appealing to investors looking for lucrative opportunities in two booming industries that show no sign of stopping anytime soon.

Editorial Sources:
1) Tech Crunch http://nnw.fm/w2B9n
2) Entrepreneur http://nnw.fm/5fdZY

For more information on SinglePoint please visit: Singlepoint (SING) or www.SinglePoint.com

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