New dimensions? Bitcoin, cash flows & legal pot in the USA
I will advertise it.
- Peter Tosh
It’s been a big year so far for the movement to de-criminalise marijuana. Uruguay, previously known chiefly for its ability to win the soccer world cup despite its tiny population, has broken the international consensus by de-criminalising marijuana on a national level and making all kinds of sensible noises about accessibility and regulation. Its first mover status is reportedly attracting foreign biotechnology companies to Uruguay in order to study the herb’s medicinal qualities without breaking the law. In the USA the medicinal marijuana laws are headed for a tipping point with 20 out of 5o states allowing citizens to buy marijuana with a doctor’s prescription, and New York soon to join that number.
Yet it’s the mountain state of Colorado that has made the biggest move by unveiling a legal pot industry infrastructure, allowing the growing, distribution and sale of marijuana as a legitimate business. Since the start of 2014, Colorado allows citizens to purchase marijuana legally, and for no particular reason other than to enjoy it. While Colorado won’t yet allow Dutch-style ‘marijuana cafes’ where cannabis can be consumed in public, there’s a real chance that this progressive legalisation is being viewed dimly in Holland, where marijuana cafe owners are already dealing with pressure from neighbouring countries to limit access to cafes to Dutch citizens.
Following the coverage of the Colorado story, I can’t help thinking that had Peter Tosh lived, he would now be earning some serious money doing ads for the Colorado pot shops, which have reportedly been earning $1 million a day since the start of the year. Tosh, to whom the word militant must be attached for propaganda purposes, was not the type of man one associates with product endorsement, and he the closest he came to that was carrying a guitar modelled on an AK47 rifle, but Tosh did after all promise to advertise marijuana once it had been legalized.
It’s hard to think of another song that addressed the topic of legalization so directly:
Tosh’s song of course went to the crux of the matter, for it was the Rastafarians who had openly celebrated marijuana as a sacramental herb; not only that, but Leonard Howell’s Pinnacle community used marijuana as a cash crop to maintain their financial independence. Yet the influence of the herb smokers reached uptown too, to the doctors and lawyers, as acknowledged in Hélène Lee’s fine documentary The First Rasta.
Contrary to the myth pushed by William Randolph Hearst and his allies in the US press, marijuana was not only used by poor black and brown people. The prohibition of marijuana did however allow police and authorities an easy way to target political and cultural dissidents, and the vast growth of the private prison industry from the 1980s onwards. It’s no accident that the USA has such a high percentage of its population incarcerated. I know some people whose lives have been ruined by a conviction for the most minor of marijuana ‘offenses’, so the decrimininalisation of marijuana in the US states is to be welcomed even if only because of the removal of the disproportionate punishment associated with marijuana prohibition.
In a timely manner, Tosh received his first biographical review in 2013, written by UK journalist John Masouri. Tosh was arguably the most politically radical of the Wailers, and was most hated by the Jamaican authorities. He suffered accordingly, and musicians wince at the memory that while in police custody, Tosh’s hands were so severely beaten that he never quite recovered his musical dexterity. Tosh’s word sound power was unique, and he was deeply aware of politics, but it was Tosh’s championing of legalisation that really made him stand out. In one way, it’s wonderfully amusing to see Tosh’s vision becoming a reality, with even the Jamaican authorities now considering how to get on board the legal ganja train before they’re left behind.
The US states have been changing their laws on marijuana on a state-by-state basis, and the production, distribution and sale of marijuana remains illegal on a federal level, so banks are reluctant to provide accounts to marijuana shops. It’s inconceivable that federal law won’t eventually follow state law in this instance, but my guess it that it will be some years before that happens.
Of course, the creeping decriminalisation of marijuana is anathema to certain right-wingers, who rightly perceive that the laws are not being enforced with huge enthusiasm. It’s worth noting that many of the major players and dealers in the cannabis industry were totally set against decriminalisation; California already had a thriving marijuana industry before medicinal marijuana was introduced. However, the new laws gave cover to growers and there’s little doubt that increasing amounts of Californian weed were soon winging their way across the country. Much of the money made in California became seed money for other ventures in other states and even outside the USA, as visitors to the various Cannabis Cups around the world will be able to testify. (Another thing that drove the law-and-order crowd nuts was cannabis advocates ditching the tie-dyes and dreadlocks for ties and suits, but that’s another story).
After a couple of weeks in business, the Colorado shops have settled at around $400 an ounce, the US being one of the last countries on the planet to stick to the imperial system. Medical marijuana is somewhat cheaper, but $400 an ounce (including taxes) is still barely more expensive than one would pay for high-grade cannabis from an Amsterdam shop, or from one’s friendly neighbourhood dealer in Europe. Even though Colorado had gone legitimate, there’s still only one way to pay: cash.
With pot shops dealing mostly in cash, there’s going to be an awful lot of cash floating around, and more than one commentator has suggested that robbers and conmen of all persuasions will be booking tickets to Colorado. One imagines that Colorado’s banks would be thrilled at the prospect of a new legitimate cash-flow, but the continued criminalisation of marijuana at a federal level means that banks are reluctant to take on pot businesses as customers. It’s an oversight that banks and the government may come to regret.
It’s a mistake to think that the progressive loosening of marijuana prohibition is entirely driven by left or liberal politics, for there’s also been support from right of centre and libertarian circles in the USA. There’s another movement abroad in the USA (and beyond) that also enjoys support across the political spectrum that may be about to link up with the marijuana movement out of necessity and perhaps also expediency.
I’ve written here before about Bitcoin and other virtual currencies. Despite the ‘returning to normal’ narrative that we’ve been hearing for the last five years, the boom and bust cycle of capitalist economies remains firmly in place. The resilience of the banking system – that many accuse of enabling the most recent crisis in its search for profit – is frankly astonishing. Political leaders around the world defer to the apparently indispensable bankers. In the USA, some bankers have gone to trial and to jail, but in many other countries, the same banks and bankers remain in place, albeit having made plea bargains and paid fines in order to escape prosecution.
Ironically, much of the wariness about and criticism of Bitcoin centers around its alleged use as the currency of online illegal drug marketplaces such as the now-closed Silk Road, considering that outside of the clueless mainstream media, the worldwide trade in illicit drugs is widely acknowledged to be the preserve of intelligence services and their establishment sponsors. Those with memories longer than a few minutes will recall that international banks including HSBC and Wachovia have been happily and busily up to their eyeballs in laundering profits from the illicit drug trade. Indeed, there was a period of time shortly after the financial collapse of 2008 when cash from the international drug trade provided critical liquidity to the financial system.
With the ganja trade coming in from the cold albeit with no clear pathway into the existing financial system, just as Bitcoin is gaining popularity at the margins of the financial system, there’s a chance for some unexpected synergy between these two phenomena. Bloomberg’s Matt Miller reported that at least one Denver marijuana dispensary is already accepting Bitcoin for purchases, which may be popular with out-of-state customers who are wary of using more traceable forms of payment. After all, along with legal marijuana and Bitcoin, one of the biggest stories of the last six months – at least for those not attuned to alternative media – has been the stunning level of surveillance of personal communications. It wouldn’t do to be paranoid.
Incidentally (and hardly co-incidentally), author Steven Hager’s last two free ebooks take as their subject matter the Pot Enlightenment and the Bitcoin Revolution, so for further reading on this topic, check his Smashwords site.