Though voters in the state of Washington used a ballot measure to legalize marijuana in 2012, a bill recently introduced in the state Senate would add new restrictions on businesses that sell and distribute those products. That bill, SB 5264, would alter the rules on those sales by prohibiting those businesses from using digital currencies for their transactions. The bill would require that:
"A marijuana producer, marijuana processor, or retail outlet must not pay with or accept virtual currency for the purchase or sale of marijuana or any marijuana product."
The bill’s definition of the term “virtual currency” leaves no doubt about its sponsors’ intended target, as it defines that term to include "digital representation[s] of value used as a medium of exchange, a unit of account, or a store of value."
If passed and signed into law, the new rules could have a dramatic impact on the state’s marijuana industry. As the Pew Charitable Trusts reported last year, the multi-billion dollar cannabis industry continues to struggle to obtain access to banking services, as many bigger banks continue to shun marijuana businesses. And while some community-based financial entities have started to provide services to those businesses, much of the industry remains unbanked.
For many marijuana businesses in Washington, Bitcoin has become the most reliable alternative to cash transactions. Any restriction on the use of digital currency could force many of those business owners to rely on cash to an even greater extent – and potentially increase their exposure to burglary and other crimes.
The bill was sponsored by Democrat Steve Conway and Republican Ann Rivers. In remarks to CoinDesk, Rivers tried to explain why she is supporting the new proposal:
“One of the goals of my Cannabis Patient Protection Act, which became law in 2015, was to eliminate the black and gray markets for cannabis in our state. SB 5264 addresses another part of the regulatory challenge. After all the work we’ve done to get a handle on the cannabis industry and help move it out of the shadows, allowing the use of unregulated currency for cannabis purchases doesn’t promote the level of transparency we committed to develop.”