Multichain Ventures, a leading firm in the blockchain, tokenized ecosystem, and digital financial technology, recently announced it had secured a contract with the State of Nevada. The contract, which was awarded in conjunction with another firm, will help Nevada fulfill the requirements of Assembly Bill 466. The bill created a Pilot Program and legal framework for the cannabis industry, which should eliminate the need for entities to rely on cash-only transactions. To achieve these cashless transactions, a blockchain-based system will be established. This is big news in an industry that has been shielded from federally regulated financial service providers.
Multichain Ventures And The Nevada Cannabis Sector
Multichain Ventures played an active role in discussions, which led to the AB466 proposal. They provided feedback at two events in 2018. Part of the discussions involved finding solutions for issues facing marijuana markets. The cofounders of Multichain, Gabriel Allred and Michael Wagner made contributions regarding discussions on how to implement a tokenized ecosystem and its benefits.
Future Of Marijuana At The Federal Level
Under federal law, cannabis is classified as a schedule I controlled substance by the DEA. Consequently, federally regulated financial services providers do not support businesses in the marijuana industry. However, the new political landscape due to victories by Democrats at the state and federal level provides hope for the sector.
The expectations of many in the cannabis sector are that Joe Biden and the democratically controlled Senate and House of Representatives will approve favorable policies. Some of the changes include:
- Supporting the rights of states regarding cannabis regulation
- Legalized marijuana nationally
- Rescheduling marijuana
Such reform would give operators in the cannabis industry access to the federal banking system. It would also open up more capital for the sector, allowing it to grow and flourish.
Nevada’s Pilot Program
Nevada passed Assembly Bill 466, which established the AB466 Pilot Program. It is an attempt to create solutions facing the cannabis industry. The program aims to create a closed-loop financial ecosystem for this evolving market. Participating in the pilot program will be optional. It works by deploying cash into a collateralized stable token, which can be transacted with others. Participants can redeem their tokens for cash at any time.
Multichain Ventures created a custom solution to meet the requirements of the bill, which passed without any opposition and received overwhelming support. It is based on the Solana Blockchain Protocol and a patent-pending digital currency financial infrastructure. They also created a special software suite for those in Nevada’s cannabis sector. The platform is designed to integrate with METRC, a standardized regulatory reporting platform using Nevada and many other states.
The initial target will be licensed marijuana operators including cultivators, dispensaries, and production facilities. However, there are plans to target the entire cannabis market including utility firms, payroll firms, landlords, and ancillary service providers. They also plan to integrate their platform with the Nevada Department of Taxation for remitting taxes.
How It Works
Businesses will continue to receive cash from customers. Once they receive the cash, they can deposit it with a federal bank facility, which is offered within the Pilot. The funds are then tokenized and can be used for transactions within the ecosystem. Owners of the tokens will have the option to convert the tokens into cash.
While various attempts have been made to integrate the blockchain and crypto into the marijuana industry, this state-backed project is one of the most notable. Having legislative backing creates the potential for the system to be adopted internationally by the marijuana sector as well as others. It could be the first step in integrating blockchain-based protocols into everyday transactions.
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