A Strange High: Two Days at Denver's Crypto-Cannabis Conference

While bitcoin can be used without interacting with the traditional financial system, many people and businesses won't use it like that for various reasons and so must follow the rules of the traditional financial system.

Merchants, like legal marijuana dispensaries won't want to be exposed to bitcoin's price fluctuations so they'll use a third-party merchant processor to immediately exchange the bitcoin into cash.

Derose is instigating the panel nonetheless, telling them that most bitcoin ATM users will drive hours to get to use one and they have no problem taking the high fee for service.

Dispensaries are afraid of bitcoin, says Kevin McKernan, founder, CEO and chief sales officer at Medicinal Genomics, a company that distributes platforms for safe, quality testing of cannabis products for clinical applications.

"Because they already have the stigma of cannabis and then they don't want to put the bitcoin sticker on there too so they have that stigma as well," he says.

A question from the audience: How much has bitcoin materialized rather than just being talked about in the cannabis industry?

What the bitcoin and cannabis industries really need is marketing and loyalty cards, he argues.

"So for above-board marijuana dispensaries, I think there's a long way to go. But in the black markets, there are people that are using bitcoin to sell drugs now."

He's got an idea to put bitcoin ATMs inside dispensaries, "That way you can just bring cash in and exchange it for bitcoin right there."

"Well dispensaries could offer discounts to those people that use bitcoin."