Brett Harrison, the president of leading crypto exchange FTX’s US office, has hinted at a possible collaboration with Cresco Labs.
The Illinois-based firm is a market leader in the marijuana industry in the United States. Cresco Labs, which was founded in 2013, is a large cannabis manufacturer, accounting for 60% of the current cannabis and medical marijuana industry in the United States.
Despite this, the company is experiencing financial difficulties, which the crypto market may be able to help alleviate, according to FTX US President.
Help Is Being Provided to the Underbanked
Despite the fact that marijuana is legal in many jurisdictions, marijuana-related companies (MRBs) remain underbanked since no major national banking system is willing to accept them as customers.
Brett Harrison claimed in a Twitter thread addressed to Cresco Labs that the situation is likely to remain this way until cannabis is legalised by federal law or legislation permitting federal banks to accept MRBs is passed.
Traditional banking institutions, he claims, perceive cannabis-related enterprises as high-risk customers. This group of businesses frequently lacks access to a full range of banking services or must pay a higher fee to obtain them, forcing them to rely on and store cash first. As a result, the probability of criminal conduct rises, and law enforcement has significant challenges, according to Harrison.
He also advised Cresco Labs to think about digital assets as a means to solve these issues.
“Crypto exchanges can offer depositary services with lower-cost access to payment rails and a broader range of consumer payment options.” MRBs might receive payments and maintain reserves in the form of stablecoins, according to the FTX U.S. president, who also expressed interest in continuing the conversation with Cresco Labs.
Cresco Labs’ interest in the lucrative cannabis market FTX is probably not without reason.
With a market worth of $2.3 billion, the U.S. wholesale powerhouse of branded cannabis goods is present in almost every step of the cannabis supply chain and actively trades in the majority of U.S. cannabis markets, particularly in California, which legalised recreational cannabis use.
Cresco Labs is steadily expanding its retail sales, which has become an increasingly important source of revenue. In the third quarter of 2021, Cresco Labs claimed a 54.2 percent growth in revenue and announced the opening of its 50th retail location in the United States.
Given the tremendous growth of the worldwide cannabis business, this should come as no surprise. According to BDS Analytics, a cannabis industry intelligence and research firm, cannabis sales in the United States alone are predicted to exceed $28 billion in 2022.
Why Should You Be Concerned
Given Cresco Labs’ and the cannabis market’s high levels of trade and growth, the relationship might benefit not only the marijuana company, but also FTX, as the ambitious cryptocurrency exchange could potentially get access to a large pool of new consumers for cryptocurrency payments.
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