With crypto tokens, Global Cannabis Capital (GCC) is looking to raise more capital, Bloomberg wrote Monday (April 18).
The report said the company is about to start selling tokens on the Ethereum blockchain platform which show its equity instead of a traditional IPO.
While GCC originally planned to do an IPO or a reverse public offering in Canada, which is marijuana-friendly, the company ended up looking into its options and is now pursuing a security token offering.
This will occur in Luxembourg, where regulations are favorable to both pot and the idea of issuing securities with blockchain.
The company is using a security token, though, which means it’s backed by the assets or equity of the user.
Token offerings are a way to do this that might be able to broaden the funding sources available to the pot industry, which can’t borrow money from banks because of marijuana’s illegal status at the U.S. federal level.
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So funding has mostly come from venture capital and other sources like wealthy individuals and individual shareholders.
“We cannot wait 12 or 14 months to go through an IPO process. Tokenization takes around three months,” Chief Executive Officer Andres Israel said in an interview at the company’s main office in Montevideo, Uruguay.
To carry out the offering, GCC plans to make 100,000 tokens representing its capital stock.
PYMNTS wrote that cashless ATMs have been good for processing around $7 billion in cannabis transactions.
See also: Cashless ATMs Mask Estimated $7B in Cannabis Transactions
The report says legal cannabis retailers have had problems making and dealing with payments because of the fact that cannabis isn’t legal federally.
That makes it difficult to accept payments aside from cash. A loophole, though, makes it so cashless ATMs could process as much as 25% of the estimated $28 billion projected to come in from the U.S. dispensary sales.
Bloomberg said the sales might make up around $500 million in fees for payment processors.
