Cannabis Industry Sees Blockchain as Key to Growth While Complying With Regulations
Marijuana, for generations an outlaw product sold on a black market, could become the most transparent industry in existence.
Blockchain technology paved the way for growth of cryptocurrency, providing a transparent record of millions of transactions around the globe.
But could it also solve challenges around seed-to-sale tracking of legal marijuana? And also give cannabis businesses the ability to project supply and demand, leading to better management of inventory and resources?
That’s the belief of many businesses in the marijuana industry, as well as the opinion of researchers at IBM.
What Is Blockchain?
A blockchain essentially is a digital ledger that is updated in real time. The technology can collect and record millions of transactions. The ledger is secure, decentralized and public, with each transaction listed in chronological order. Once entered a transaction cannot be changed.
Most associate blockchain with the cryptocurrency Bitcoin. The technology offers a way for people in a market to keep track of transactions without centralized recordkeeping.
The technology has potential in many different areas outside of cryptocurrency, however. Cannabis business are beginning to seize on blockchain for potential uses within the marijuana industry.
IBM Advocates Blockchain in Canada
The idea of using blockchain in the cannabis industry took off in late 2017, when IBM submitted a paper to the government in British Columbia, Canada. Officials there were looking for new ideas on how to track marijuana from seed to sale as Canada prepares to legalize recreational marijuana, likely in the summer of 2018.
In a paper sent to those officials, IBM argued that blockchain could help government officials better track the source, sale and pricing of marijuana, according to the BBC. They also said marijuana producers could use the technology to track inventory and project supply and demand.
Part of the attraction of blockchain is that because it is a distributed ledger, it makes for a tougher target for cyber attacks while also maintaining data security.
MassRoots Move Into Blockchain
In the case of cannabis company MassRoots, the move into blockchain follows an internal fight that led to the ouster and eventual return of CEO Isaac Dietrich. Since his return, Dietrich has sought to move the company beyond a social media hub for marijuana and into a cannabis-focused software company.
As explained on the company website, MassRoots hopes to leverage blockchain technology for seed-to-sale tracking as well as tracking sales at dispensaries. They are specifically investigating how to apply blockchain to MassRoots Retail, the company’s point-of-sale system.
Nevada-based Nuvus Blockchain also hopes to raise $100 million to create the largest blockchain platform yet for the cannabis industry. As with IBM and MassRoots, the goal is to provide a secure and transparent tracking system for marijuana transactions.
Nuvus, in a news release, said the entire supply chain of marijuana would be tracked. This offers the chance to provide consumers, doctors, growers, retailers and government officials a completely transparent record of the entire cannabis supply chain.
It also would provide “transparency on the type, potency and potential benefits of different strains and their effects on the human body,” according to the news release.