NetworkNewsWire Editorial Coverage:
Shortly after cannabis enthusiasts and investors celebrated
California’s January 1, 2018, rollout of legal recreational
marijuana sales to adults, the federal government reversed its
course on marijuana policy, calling for tighter enforcement of
marijuana laws. U.S. Attorney General Jeff Sessions rescinded the
Cole Memorandum, a 2013 policy that offered some protections from
federal prosecution for the cultivation, distribution and
possession of cannabis in states where the highly regulated plant
is legal (http://nnw.fm/7h5KR). Sessions’ decision ushered in a
deeper freeze to the banking dilemma facing cannabis retailers, who
have found themselves relying primarily on cash transactions since
cannabis remains illegal under federal law. Although the rollback
of the Cole memo created serious questions and sent
marijuana-related stocks lower, there continues to be positive
movement in the cannabis industry as companies such as
ChineseInvestors.com, Inc. (CIIX) (CIIX
Profile), Overstock.com, Inc. (OSTK),
MGT Capital Investments, Inc. (MGTI), Riot
Blockchain, Inc. (RIOT), and Xunlei Limited
(XNET) invest their attention and resources on alternative
financing options and the technology behind them.
Confusion = Opportunity
Even amid what the media is describing as a potential future
“crackdown” on marijuana-related business, the cannabis industry is
expected to mushroom from $6.7 billion in 2016 to over $21 billion
by 2021, according to Arcview Group research (http://nnw.fm/PL0e0). In rescinding the Cole Memo
policy, Sessions said future prosecutions of businesses and
individuals who sell cannabis in states where it has been legalized
will be left up to individual U.S. attorneys (http://nnw.fm/E5rrP). Nearly 70 U.S. representatives
of Congress wasted no time in proposing a spending bill amendment
that would ensure protections for states that have legalized
marijuana in spite of Sessions’ decision. Representatives said the
proposed provision is written to specifically respect the
constitutional authority of states to regulate commerce within
their own borders (http://nnw.fm/v1yAU).
Warren Wang, CEO and founder of ChineseInvestors.com (CIIX),
said that even during a time of confusion in the broader cannabis
industry there is opportunity if one knows where to look.
ChineseInvestors.com, a diverse educational and consulting
company for the Chinese-speaking community in China and the United
States with interests in the cannabinoid (CBD) market, recently
announced it is spinning off two of its divisions to allow the
company to focus on its new cryptocurrency division.
“We are excited to announce our intention to spin off CBD
Biotechnology and ChineseHempOil.com, Inc., as we believe the
existing business lines and the new acquisitions in China, secured
by CEO (of CBD Biotechnology Co., Ltd.) Summer Yun, will allow
these entities to continue to grow in their respective markets,
while bringing new value to the company’s existing shareholders,”
Wang said in a December news release (http://nnw.fm/Yp1aN).
Cryptocurrency Options
The company recently announced an agreement with Blockchain BTM,
LLC, to host a Bitcoin ATM in the lobby of its headquarters in San
Gabriel, Calif. (http://nnw.fm/Vb6wQ). The Bitcoin ATM allows
cryptocurrency enthusiasts to purchase up to $7,000 worth of
Bitcoin daily. The company plans to expand this service in other
Chinese communities located throughout the United States, in
addition to providing onsite customer service representatives able
to help customers with using the Bitcoin ATM. The machine offers
translation into five languages including traditional and
simplified Chinese, English, Spanish, French and Korean.
In the same announcement, CIIX unveiled its new cryptocurrency
education and information services, including the first Chinese
Daily Video Newscast, Bitcoin Multimillionaire, broadcast from the
NYSE and covering cryptocurrency and blockchain technology. In
November the company launched a free bitcoin news and education
website in the Chinese language under the domain name
newcoins168.com to serve Chinese cryptocurrency investors globally
(http://nnw.fm/Vb6wQ).
“In addition to providing skilled investors with news about
digital currency, ChineseInvestors.com, Inc., hopes to satisfy the
average person’s curiosity about cryptocurrency, including how to
purchase Bitcoin,” Wang said in announcing the company’s strategy.
“Moreover, the underlying blockchain technology is extremely
compelling and we expect to see many interesting developments in
this area. Bitcoin ATMs are just one example of how this area is
moving forward. We are excited to make this service available to
the Chinese community.”
Viable Alternatives
Bitcoin and other cryptocurrencies are seen as viable
alternatives to conventional banking for the cannabis industry.
Adopting this method of payment could provide a safer alternative
to dealing solely in cash when conducting a transaction at a
medical marijuana dispensary or retail establishment (http://nnw.fm/cMs5P). Cryptocurrencies are supported
through blockchain technology, an encrypted digital ledger used to
record financial and informational transactions. Wang, who remains
bullish on the future of bitcoin and other cryptocurrencies,
emphasized during a recent interview (http://nnw.fm/lGJ4G) that the Chinese-speaking
community worldwide is eager to learn more about buying and
managing digital currencies, despite China’s ban on trading
cryptocurrencies on a regulated exchange.
In an interview with the Bad Crypto Podcast (http://nnw.fm/oO7WI), Wang said the Chinese investor
is an important target for cryptocurrency entrepreneurs.
“The Chinese investor is an advocate of gambling,” he explained.
“Most today trade Bitcoin and other cryptocurrencies on the offline
market. The Chinese-speaking people within China and also in North
America — the U.S. and Canada — are excited about Bitcoin.”
Legalization of recreational marijuana for adults is inching
closer in Canada with an expected July 1, 2018, opening date.
Blockchain technology, the underpinning strength of
cryptocurrencies like bitcoin and Ethereum, is quickly being touted
as the financial security tool of the future for the cannabis
industry, its producers, growers, labs, specialists and
dispensaries (http://nnw.fm/1OY0z). Industry giant IBM is also
reporting that blockchain technology could provide “an irrefutable
chain of custody” for cannabis — from its infancy as a seed to
final production and sale of the plant’s various forms (http://nnw.fm/6qH4i).
Blockchain Believers
Among other companies developing opportunities in the blockchain
sector, Overstock.com (OSTK) solidified its goal
of bringing greater transparency and efficiency to capital markets
by launching an initial coin offering (ICO), cryptocurrency’s
version of a stock initial public offering (IPO), in December
through its exchange operator, tZERO. The “pre-sale” phase
targeting strategic purchasers began Dec. 18 and a “subsequent sale
period” phase seeking agreements with other accredited investors is
scheduled to begin Jan. 18 (http://nnw.fm/rOJa6). Overstock is the third most
active corporate blockchain investor worldwide.
MGT Capital Investments (MGTI), with facilities
in Washington state and Sweden, ranks as one of the largest global
bitcoin miners. The company is also deeply invested in
cybersecurity technologies for mobile and corporate applications.
The company announced agreements in December to secure “reliable
and adequate” electrical power in Sweden to begin bit mining
operations there by the end of January. Stephen Schaeffer,
president of the company’s Crypto-Capital Strategies business unit,
said the company is “exploring cost-efficient locations for hosting
and electricity on a global basis” (http://nnw.fm/4UwVJ).
Riot Blockchain (RIOT), a strategic investor
and operator in blockchain technology, focusing primarily on
bitcoin and Ethereum blockchains, has its own bitcoin mining
operation. Its portfolio includes investments in cryptocurrency
accounting and audit technology services, a Canadian exchange for
digital currencies and a telecom industry escrow service based on
the blockchain. Riot recently announced it has established Digital
Green Energy Corp. as a wholly owned subsidiary to explore
international infrastructure opportunities. The company is
identifying environmentally friendly projects with large energy
capacity and a cost-efficient rate for cryptocurrency mining and
data center operations, according to a news release (http://nnw.fm/2FH1p).
Based in China, Xunlei Ltd. (XNET) is an online
advertising service provider that also provides downloading
services and online game platforms for game developers and users.
Its products and services include Xunlei accelerator and cloud
acceleration subscription services, in addition to providing mobile
device applications. Onething Technologies Co., a subsidiary of
Xunlei Ltd., recently brought its OneThing Cloud technology that
integrates “crowd sourced computing + blockchain” to the Consumer
Electronics Show (CES) in Las Vegas. OneThing Cloud is a smart
device that can collect idle computing resources including
bandwidth and storage from users who are then rewarded with a form
of digital asset called LinkToken (http://nnw.fm/wf87Z).
Blockchain technology is being touted as one of the single most
important advancements in the securities and financial sectors.
Cannabis-related business owners, along with other ancillary retail
industry sectors, are paying close attention to the progress being
made by companies leading the way in today’s fluid environment as
the public and politicians grapple with marijuana’s next
chapter.
For more information on ChineseInvestors.com, please visit:
ChineseInvestors.com (CIIX)
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