Legalized marijuana was one of the industries which embraced cryptocurrencies early. One of the reasons for that was the early refusal of banks to service otherwise fully compliant medical marijuana businesses back in 2014.
Now, Cannabis Coin is just one of the digital assets showing the results of cannabis companies moving into crypto coins. CANN has sank from the recent peaks above $0.20, but the hype for this asset and the underlying company is not receding.
So-called pot coins are a subset of digital assets that have their own fan base, different from the more tech-centric crowd around some Ethereum projects. But lately, pot coins have seen more active trading, and some are relatively old and well-represented assets that are now enjoying the altcoin boom.
Others, like Marijuanacoin are way more volatile and risky. In the case of MAR, this is due to the limited and volatile trading on Cryptopia. MAR trades around 24 cents after falling by 50% from the recent peak around $0.48.
HempCoin has also fallen in a sharp correction toward $0.25 from a peak above $0.60.
For now, the so-called pot coins are still in recovery after peaking and falling. But every time the price grows, their social media profile improves on the exposure.
Are Marijuana Coins a Sound Investment?
Unfortunately, existing marijuana-related digital assets, as well as upcoming coins, are a very risky proposition. Usually, the coins are related to an OTC-traded company, which is also seeing stock speculation.
Marijuana coins are mostly related to a form of medical marijuana business, with the other business model being hydroponics equipment. Other companies boast of acquiring plots of land.
However, sifting out the real businesses from those without a chance of surviving is risky.
We must also remember that the marijuana stock hype has been going on for years, with the US Securities and Exchange Commission intervening to stop stock pumps and speculative trading for certain tickers.
Now, the hype is back, often in the form of ICOs.
And combining the two overheated trends can increase risk greatly. It is also unknown what the fate of those ICOs and tokens would be. But in any case, the example of the connection between small marijuana companies, marijuana stocks and the crypto sector may be seen as one use case for digital assets.