LAS VEGAS – State treasure elect devises chip system as alternate payment for marijuana outside of cash
Nevada has become a Mecca for marijuana businesses in recent years, with the legalization of both medical and recreational pot use. But the industry faces a serious barrier to growth because marijuana remains illegal under federal law, no marijuana business can use federally chartered banks.
Since marijuana is still illegal at a federal level, all transactions must be conducted in cash, including payments to vendors and even tax payments to state government.
However, Nevada’s newly elected state treasurer is working on a plan to fix that.
Treasurer-elect Zach Conine says a lot of people helped come up with the idea.
Since an all-cash business can lead to fraud, theft and even encourage robberies, Conine, Lieutenant Governor-elect Kate Marshall, and others helped devise a solution for a problem that will continue to exist so long as marijuana businesses can’t use banks.
Here’s how it works: Businesses and customers would be able to go to the state and exchange cash for tokens, otherwise known as chits. The chits would be powered by blockchain technology and would be fully trackable, to avoid money laundering.
Chits could be used by customers to purchase marijuana, and by marijuana businesses to pay their suppliers, their landlords, their utilities and even their taxes, all without using cash. Companies that accept the chits would then turn around and redeem those tokens for cash from the state. This essentially eliminates the need to do business in cash, and all the risks that go along with that.
The Chit system doesn’t solve the underlying problem, which is marijuana’s regulation by the federal government. But treasurer-elect Conine says it’s the best solution available to Nevada marijuana businesses right now.
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