As of June 2019, 11 states and Washington D.C. have legalized the recreational use of marijuana for adults, while 33 states have legalized medical pot. These numbers are expected to grow as more states explore ways to make decriminalize the plant. Keep in mind, though, that marijuana is still illegal at the federal level, which makes it difficult for anyone conducting financial transactions even in states where pot is legal.

Businesses and operators that sell and/or distribute recreational and medical pot are still barred from using banks for their transactions because of federal legislation. The development and use of marijuana-specific virtual currencies has ramped up to respond to the hole in this market. Cryptocurrencies make it easy for people in the marijuana industry—or simply those who want to buy some weed—to carry out transactions. While Bitcoin has become widely popular in the virtual currency space, there are a few alternative cryptocurrencies catering specifically to the pot sector.

Read on to find out more about the top five cryptocurrencies on the market.

Key Takeaways

  • Although marijuana is legal in many states, it hasn't been decriminalized at the federal level.
  • Pot-based operators and consumers can now use marijuana-specific cryptocurrencies for their transactions, since banks cannot legally conduct pot-related business.
  • Popular marijuana-based cryptocurrencies include PotCoin, CannabisCoin, DopeCoin, HempCoin, and CannaCoin.

PotCoin (POT)

Launched in January 2014, PotCoin was one of the earliest cryptocurrencies for the marijuana industry. It was designed to solve banking problems for people looking to transact in legal marijuana. Trading of Potcoin takes place directly between people without using a bank or clearing house. The creators of the currency wanted to capitalize on Colorado’s legalization of marijuana and even installed a PotCoin ATM at a marijuana dispensary in Colorado. (Related: Pot Industry Turns to Bitcoin as Banks Snub Them)

But the currency failed to make a huge mark, remaining in the shadows until June 12, 2017. A press release and a video of NBA star Dennis Rodman sporting a potcoin.com shirt in North Korea gave PotCoin a shot in the arm. By funding Rodman’s trip, not only did PotCoin re-enter the media spotlight, its value also shot up 76% in just one day, according to Coinmarketcap.com. As of June 2019, its current market cap was close to $2.077 million, a big jump from $81,547 in February 2014. As for price, in February 2014, 1 PotCoin was worth $0.004625, which has now increased to $0.009337—that's more than a 100% increase in its price.

PotCoin is in limited supply of, you guessed it, 420 million coins, with more than 222 million in circulation. It trades on three markets and also transitioned to proof-of-stake, which allows people to mine or validate block transactions according to the number of coins they hold. An important caveat is that PotCoin claims transaction speeds of 40 seconds, which are pretty impressive compared to those for Bitcoin.

The cryptocurrency announced some new features at the beginning of 2019 including HD Wallets, a reduction in synch times, promising a faster network synchronization to help boost the user's experience.

chart courtesy - worldcoinindex.com

CannabisCoin (CANN)

CannabisCoin was also developed in 2014, just a few months after PotCoin. It is a proof-of-work, peer-to-peer open source currency and, like Potcoin, was aimed at easing transactions for medical marijuana dispensaries. While it initially gained popularity, it has failed to deliver for investors.

Focusing on its market, CannabisCoin has proposition to convert cryptocurrency directly into marijuana. Under the name CANNdy, there is a line of medicines and marijuana strains grown for the specific purpose of exchange at the rate of 1 CannabisCoin to 1 gram of medication.

Marijuana-specific cryptocurrencies also use virtual wallets to hold and store coins, just like regular cryptocurrencies.

The total supply of CannabisCoin is set at 91.8 million, with over 77 million currently in circulation. The currency has a market cap of $803,440, according to coinmarketcap.com.

chart courtesy -worldcoinindex.com

DopeCoin (DOPE)

DopeCoin was founded by Adam Howell—also known as Dopey—in February 2014, according to its website. Little is known about the specific markets the currency serves except that its "mission is to provide marijuana enthusiasts with a modern and secure way of doing business for the 21st century."

According to its website, DopeCoin users can transact pseudo-anonymously in under a minute, and don't pay any fees or transaction costs.

Started with a vision of creating a Silk Road for transactions in marijuana across the world, DopeCoin supply is limited to 200 million DopeCoins with about 117 million currently in circulation. It is also a proof-of-stake currency, where a 5% annual interest can be earned. The currency currently has a market cap of close to $240,045, according to coinmarketcap.com.

chart courtesy -worldcoinindex.com

HempCoin (THC)

HempCoin also came into existence in 2014, although its focus is less on individuals using it to buy weed. Instead, this cryptocurrency was designed for use by the farming industry and medical/recreational dispensaries. HempCoin's website claims it can be used to "facilitate transactions between marijuana farmers and the local dispensary shops" as well as purchasing gear and tools used to farm marijuana. 

It's interesting to note that HempCoin is used in all areas of agriculture, not limited to ones involving weed. As of June 2019, HempCoin has a price of $0.003672, a market cap of more than $896,666 million.

chart courtesy -worldcoinindex.com

CannaCoin (CCN)

CannaCoin runs on a decentralized blockchain using Peer2Peer tech. The currency was developed in 2014, but transitioned to proof-of-stake at block 370,000. Cannacoin, as described by its founders is a "group of cannabis enthusiasts working towards the future development of cryptocurrency applications related to cannabis production, seed production, extract production, glass blowing facilities, vape and dab station manufacturing, crypto development, and more"

As of June 2019, CannaCoin has a price of $0.015528 and a market cap of $73,019. There's a circulating supply of 4.7 million CannaCoins.

chart courtesy -worldcoinindex.com