Bitcoin and Biodiversity in the Cannabis Industry

The world witnessed unprecedented power grabs and supply chains disruptions over the past couple of years. The almost perfect alignment between big government, big banks and corporations should be a serious cause for concern across the agricultural sector. These moves represent no less than the most serious threats to our freedom and survival as businesses, probably even as individuals. If you stand for resilience and biodiversity, bitcoin should be a natural fit. Bitcoin ultimately protects biodiversity.

Concentration of power and money had started long before the COVID hysteria took over the world. Corporatization of the agricultural sector has been my main concern long before the legalization hype started. We all knew, deep inside that the cannabis space had this potential of becoming the ugliest manifestation of big ag, big tobacco and big pharma, all at once. It's happening right before our very eyes and a lot of us feel helpless about this trend. While most in the industry have struggled to obtain the most basic financial services any legitimate business is entitled to, a parallel financial system emerged and is now representing a very serious alternative to the broken legacy system. Let's dissect a bit what our options are and how they support our dream vision for the cannabis industry, medicinal plants, but also for the entire agricultural sector.

The broken legacy system

We are familiar with the central bank-managed, credit-based scheme that creates money out of thin air, unfairly distributed across the economy, mainly towards insiders, while the pleb receives crumbs to survive on and pays interests to crony banksters. Consumers and businesses alike take ever more credit to get ahead and acquire the assets they need to prosper or sometimes, sadly, to simply satisfy advertising-induced cravings. Sustaining a capital intensive cultivation operation in these conditions is a real challenge. Add the regulatory burden and you've got a perfect recipe for family business destruction.

You may be wondering how monetary policy, plant breeding and plant patents relate. Well, the fiat system fosters an annuitant scheme, where concentration of power and resources becomes the norm and where artificial moats prevent any new competitor from entering the market to provide better options to society. Cronyism goes hand in hand with predatory proprietary tactics. In order to pay their debt back or deliver expected returns to investors, innovators need to acquire exclusive rights over biology (e.g. plant varieties) to grab unjustified and unreasonable margins for long periods of time over a newly bred varietal. At scale, this system incentivizes breeders to limit access to their cultivars, preventing any other breeder from improving the genetic pool which ultimately destroys biodiversity by creating single points of failure in the preservation effort. It also fosters predatory practices on farmers and growers who face hefty fines and penalties for inadvertently breaching patents when growing such proprietary varietals. Ask corn and cotton farmers who got rekt by Bayer, Syngenta or Dupont after their fields were cross-pollinated with proprietary pollen from neighboring fields during windy days…

Let me pause to clarify something. Patents on technology can absolutely be legitimate to enable returns on capital intensive R&D. However, patents on biology are unethical for 2 main reasons:

1. They tap into an existing genetic pool that sits in the public domain, sometimes called “commons” (i.e. Big Ag initially used public domain varietals to breed patented varietals)
2. They incentivize GMO development and ultimately, transhumanism

In the agricultural world, it seems the more central banks print money, the more concentrated markets become and the less innovation hits the market. In the context of plant breeding, biodiversity is inversely correlated to money supply, where fiat encourages sterile monocropping. Despite these growing predatory proprietary practices, debt levels are at an all-time high across the cannabis industry. Most of these zombie corporations will never repay their debt. The house of cards will harm many in its fall, including humble players who built the entire space, such as family businesses.

The cannabis industry has been consolidating at a concerning pace in the past few years. Canada and California are far from the legalization dream many of us had. Legacy farms are being forced out of the market and low quality corporate mids(cannabis of not the best quality) sprayed with synthetic terpenes (i.e artificial flavors) flood the market. We are all familiar with this race to the bottom pattern.

There should be room for high quality craft products. Such products are difficult to bring to market in a fiat-based system that requires ever larger economies of scales and upfront capital. Instead of consolidating the industry based on capital expenditure into artificial moats such as plant patents, a bitcoin-centric industry would fairly reward craft producers for the quality they bring to market, not their moats.

If you are a human-scale player and want to make a living from your passion for the plant, what are the best tools at hand? You should already know that open-source breeding is the most suited IP strategy for small breeders. You don't want to fight the patent war with your limited means; against crony corporations sitting right next to the money printer. But how can you win the open-source game using unfit fiat money? Well, here’s come Bitcoin.

The new paradigm: sound money

Sound money is salable across space, time and scale, it adequately stores value for their hard-working holders, while respecting their privacy. It's value-creators’ money, not annuitants’. It's the adequate money for rewarding breeders who improve and maintain the genetic pool that ultimately benefits consumers. It's scarce money that creates the conditions of abundance and biodiversity. But how?

Imagine being paid for your work in a currency that appreciates in time and preserves the value of your work, in other words, of the energy you expend to grow plants, select phenotypes, breed new seeds, select and package them. Imagine a currency that allows you to transact with people anywhere in the world, without asking permission from anyone and without doxxing you. That's quite a revolution for growers and breeders who have been denied banking services and had to rely on cash to settle transactions, with all the risks pertaining to it.

Bitcoin is trustless, permissionless and instant transaction settlement between parties. It allows breeders and growers to live off of their passion, what they do best: farming and breeding. Breeders shouldn’t have to play the litigation game to enforce patents and defend their annuities to keep up with inflation and pay interest on printed money. Those who resorted to doing so usually regret it when they realize they can't win at Big Ag's game; after all the rules of the proprietary game are written by and for the cantillionaires. Small and medium size businesses cannot win this game in the long run because patent enforcement requires substantial cash-flows. Engaging in the plant patent game is a sure way to sell out down the road, or simply being pushed out of the market by bigger players.

Any entrepreneur thriving for financial autonomy and ultimately for freedom wants to convert their expended energy into hard money. With bitcoin, the incentive to compromise biodiversity to maximize annuities in order to compensate for melting fiat money disappears. With bitcoin, breeders and growers can focus on their craft, while storing the fruits of their work for the long term in the soundest money that exists. Bitcoin therefore allows for many small players to be part of the agricultural sector: it encourages anti-fragility, competition, and biodiversity.

This is not the only problem bitcoins solves for the cannabis industry. Transaction settlement has been a central issue. Excluded from the traditional banking system, too many legally operating businesses have had to rely on cash to settle transactions. Sitting on piles of cash in today's world is impractical and indeed dangerous. Meanwhile these same businesses are paying taxes like any other. Taxation without financial representation. Bitcoin fixes this. By its trustless non-intermediated nature, bitcoin allows cannabis businesses to settle transactions in a secured way, while not relying on banks or payment processors. Who wants to pay onerous processing fees and beg for basic services to financial institutions that despised this industry for years? Why not turn this hurdle into a competitive advantage? Instead of jumping through hoops to be accepted into the dying legacy system, the entire cannabis industry should migrate to bitcoin and get ahead of the game, ultimately creating the blueprint for the agricultural sector at large. 

This is a guest post by Remnantal. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.