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The Rise of Crypto and Cannabis: How Can You Participate?

October 18, 2018

By 2021, retail sales for legalized cannabis will reach $30 billion (up from $6.5 billion in 2017). That’s according to Greenware Advisors, an independent research and financial analysis company focused on the cannabis industry. And they’re not alone in this prediction. Growers and makers of cannabis-infused edibles have had to supersize their operations, moving away from handmade items and opting instead for machines that can roll 8,000 joints per day or fill 100 vape pens in just 30 seconds. In America, more people are working in the cannabis industry than there are dental hygienists - one of the most prolific careers in the country. And it’s not just the U.S. that’s seeing the boom; Brazil, Germany, Australia, Israel, and Canada are also betting big on the legalized cannabis industry, eagerly waiting to cash in.

At the same time, the cryptocurrency space is booming. Despite being called a “bubble” and a “fad,” the last five years have seen unprecedented growth and the crypto market has proven that it’s here to stay. Since 2014, “the total market cap of the top ten cryptocurrencies has risen from $11.36 billion to $455.57 billion.” Yes, the market has taken a nosedive since 2017, but this is largely due to “mock” and fraudulent ICOs dropping out of America’s graces, allowing the market to level off with (more or less) the legitimate ICOs still standing.

Barriers to Entry

Despite the promise of two booming investment opportunities, cannabis and crypto are both plagued with a fundamental problem: how can retail investors confidently participate? Both have regulatory difficulties that can make it a challenge for investors to gain entry in the first place.

The Cannabis Market

The market is highly fragmented, with some states have legalized only medical marijuana, other having decriminalized the consumption but not the sale or possession of marijuana, and others allowing full legalization. At a federal level, marijuana is still illegal. This creates a myriad of problems for investors, including cross-border transactions. There are also banking regulations to contend with. Since banks are federal institutions, marijuana companies have to steer clear, opting instead for a cash-only model. Finally, there are tax implications for businesses: they can't deduct basic business expenses against business revenue since the business model is not federally legal.

Additionally, most private offerings are limited to accredited investors. This leaves the average investor with public offerings, most of which are trading as penny stocks on exchanges outside the US.

The Crypto Market

Cryptocurrencies have no SEC oversight and, therefore, little regulatory protection for both investors and issuers. Because ICOs operate outside of the SEC, purchase agreements are sketchy at best and fraudulent at worst (an estimated 80% of the ICOs founded in 2017 were scams). And because they’re not tied to any tangible value, there is no way to recoup an investment if the issuer decides not to pay up. How is a serious investor supposed to know which ICOs to trust and which to run away from without looking back?

A New Option

For investors who want to get into the cannabis market, there are already funds in various areas of the cannabis industry. For instance, investors can choose funds that focus on agriculture/growing operations, processors, dispensaries, software, and retailers. For investors who want to get into cryptocurrencies, up until now the options have been pretty limited to unstable ICOs.

But what if you want both?

If you’re excited to get into the crypto and cannabis markets and don’t want to gamble precious investment cash on unstable ICOs or cash-only opportunities, you’ll be happy to learn there is a better investment option. CERES Coin LLC  has created an STO (security token offerings) in the cannabis space. This STO is a form of collateralized, stabilized currency within the cannabis industry. CERES Coin LLC is proving a mechanism and investment opportunity that bridges these two booming segments and points the way towards a new model for investing altogether.

Of course, the big problem with cryptocurrencies of the past has been the desire to use the coins to both process network transactions AND function as an investment asset. Not only will CERES coin allow you to invest in two different industries, but also in two different ways. The dual-asset token will merge the gap between transaction currency and investment currency. Ceres Coin is a stable coin used for transactional purposes, collecting transaction fees through the cannabis ecosystem. Ceres Token is the investment vehicle, capturing those transaction fees from Ceres Coin in addition to a solid 10-16% interest rate on the underlying real estate assets within the Token investment.

To learn more about CERES Coin and how you can get involved in both crypto and cannabis as both an investor and potential customer, contact us here. If you’re an accredited investor, you can also reach out to us directly at info@cerescoin.io.