Blockchain Technology Can Build Trust in the Cannabis Industry
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The cannabis industry has a trust problem, but blockchain technology can change that. Just look at its role in supply chain management.
Blockchain is a digital ledger that records and tracks data and physical assets from point A to B in the supply chain. The information is cryptographically secure and tamper-proof: No one can change it once entered and verified.
Blockchain operates by "smart contracts," it's the mechanical function that controls how the information is recorded and received on the "digital ledger." "Miners" play a role in keeping it cryptographically secure, but that's a whole other article. A smart contract is a computer code that controls who, what, where, and when transactions occur along the supply chain. This automated system gathers signatures, enters time stamps, tracks shipping and deliveries, and any other actions required in the process. Smart contracts execute accurate transactions to eliminate human error and manipulation that currently afflicts the paper and manual-based system.
Blockchain technology could be the solution needed to gain consumer confidence in the highly unregulated cannabis industry. It will track and verify a product's lifecycle from cultivation and manufacturing processes, location tracking, compliance verification, and an overall supply chain paper trail.
Lack of government oversight
Unfortunately for consumers, the CBD industry receives little government oversight from the FDA, even though it's been five years since the 2016 Farm Bill legalized hemp. Disturbing reports from the FDA over random consumer product testing revealed several products didn't have the THC and CBD levels they claimed to have. Some had more, and some had less. The fast-growing industry is seeing rogue players entering the marketplace with little protection for the consumer.
But this unregulated marketplace hasn't stopped hoards of people from flocking to it, and the interest is only growing. As of now, the only full-proof way to verify the contents of a cannabis product is to rely on third-party testing labs for results. It's common practice for companies to provide a certificate of analysis to build trust with the consumer and fight those tainting the industry.
The chainlink from seed to bottle
Seed breeders, hemp growers, and extraction labs also play a critical role in determining a product's quality and efficacy. It starts with the seed breeder and the essential job of composing cannabis strains to target specific therapeutic results. Cannabinoids, terpenes, and flavonoids make up the mix which causes different effects depending on the combination.
When growing hemp, soil, seeds, spacing, and harvest time are just a few factors that will make or break a crop. And hemp is known for cleaning soil of heavy metals and contaminants when given a chance. To prevent purchasing a tainted end product, stick with a farm that is a certified USDA grower to ensure quality.
One of the biggest challenges facing cannabis products is their difficulty absorbing into the bloodstream (bioavailability) because they are oil-based. Our bodies are 80 percent water—they don't mix.
The race is on in the biotechnology space between engineers (extractors) and formulation specialists (pharma)to create the most effective delivery system of cannabinoids into the body. Innovative solutions are emerging, and consumers are grappling to understand the science, technology, and brands to trust.
With all this said, it is easy to see why the consumer needs proof of product from seed to bottle.
Cultivators, manufacturers and, bioscience companies need to follow strict standard operating procedures (SOP) for safety and quality assurance. Blockchain will validate SOP processes as they occur to verify product outcome and authenticity.
Physical tracking capabilities
Blockchain also tracks physical property (cannabis plants, manufacturing, end product) as it moves through the supply chain by attaching a GPS tracking device to the shipment. The device communicates the location to the blockchain as a monitor in real-time.
The GPS tracking device system verifies where cannabis came from and who handled it along the supply chain. Smart contracts collect signatures, documents, certificates, time stamps, and other data as evidence of product authenticity.
Currently, consumers go on the blind trust system that growers and retailers will deliver on their claims.
The cannabis industry is snowballing, and consumers are clamoring for all sorts of cannabis-based topicals, ingestible, and pharmaceutical products. Is blockchain poised to give us a level of transparency and trust it needs to fully support this burgeoning industry that is potentially beneficial to us all?