Tokken is a mobile banking app designed to legitimize the way Coloradans pay for weed. Using a custom-built internal banking system based on “tokens,” instead of cash, the company hopes to grow the technology and, eventually, disrupt the global banking system.

For users, Tokken acts as a digital wallet, enabling easy purchasing with on-file cards. But this wallet is different from other popular payment systems, like Venmo or Paypal.

Tokken’s technology converts hard currency to digital tokens, which are used as an accounting tool, linked to U.S. currency.

Dispensaries can choose to leave the money in token form, convert tokens to cash or use them to make other payments.

All transaction records are “geofenced,” meaning Tokken can prove customers are making purchases where they say they are, and are recorded in a blockchain database. The blockchain keeps encrypted records, links them to past purchases, is safe from tampering and needs no administrator.

For an industry operating under intense scrutiny, both from...