With legalization of cannabis and marijuana in few states of North America, the entire cannabis industry and its growth has become the talk of the town. Another budding industry that is expected to disrupt almost all mega industries can play a major role in safeguarding cannabis industry. Any guesses which it is? Yes, you imagined it right. We are talking about how the potential of blockchain technology can help safeguard cannabis industry and marijuana dispensaries.
Top ways blockchain can help safeguard cannabis industry
Obviously, the blockchain can’t directly help with the regulatory environment or legalization concerns. However, the technology may be able to assist with the other burning issue i.e. lending. Cannabis businesses can’t normally access credit cards or bank loans. In some cases, even outside investment is also not possible to access. However, new models of blockchain-based lending are commencing to take shape in this space.
As per Cryptography expert Clark, the biggest concern in any sort of lending is the threat of the loan recipient escaping with the cash.
Clark says that “Blockchain will not solve that problem for you, but it can help by adding transparency, so you might know a reputation or have some insurance on the side or that type of thing.”
As per the latest industry research reports, legal cannabis is nearly a $7-billion business in the U.S. alone. In addition, most of the business is carried out in hard cash. This “cash only” trend is in the process of transformation or we can say that it must needs transformation.
The cash-intensive trait of the cannabis business invites criminal activity to some extent. If the money earned from the sale of cannabis is used in cash payments to workers like electricians, plumbers or other blue-collar jobbers, it falls under money laundering.
In the real world, not each and everyone is crazy about blockchain encryption. But, if we talk about cannabis industry in particular, it is definitely eyeing on the blockchain encryption for safeguarding.
In order to safeguard reliability of the legal cannabis market, The Cannabis Act sanctions Health Canada to employ a national tracking system for marijuana, tracking seed to sale journey.
Store sensitive information
In the blockchain, encryption and verification is there at all stages, in all blocks. Hence, it is almost impossible for any single user to manipulate the data. A user cannot alter, hack or delete any kind of information from the block or sequence. So, it is safe to store any sensitive information pertaining to marijuana on blockchain platform. This feature is boon to the cannabis industry.
With legalization of marijuana and cannabis, the Canadian government also demands a thorough record keeping i.e. records of seed to sale tracking. Basically, it is insisted to help avert diversion of marijuana. In other words, the intent behind this demand is to keep an eye on and prevent the movement of legal cannabis to the illegal market and vice-versa.
Further, the following records pertaining to cannabis and marijuana need to be filed on monthly basis. As per the Act, all authorized companies operating in the cannabis industry should file records on how a particular weed / marijuana was
- lost due to theft and others
Protection to pot growers
There are existing blockchain solutions that keep absolute and crypto secured records of entire cannabis logistical supply chain. Examples include Medicinal Genomics and BLOCKStrain which enables utter transparency. Such transparency would see increased safety in not only workers or business owners but also consumers, patients and other industry participants. The entire transactions would easily be traceable. Blockchain acts as a single credible source of trusted data and safeguards pot growers. Regulators, producers, consumers, marijuana dispensaries, and patients – all would be able to verify the marijuana product’s quality as well as its authenticity and legal status. Through blockchain solutions, both pot growers and breeders can get the facility to protect their IP. On the other hand, governments will also be able to smoothly monitor compliance and control regulation in real time.
Transparency and security is crucial in the legal cannabis industry. As compared to cash-only alternative, so far, the blockchain has proven more secure option. This desire of going cashless to ensure security drives cryptocurrency in the cannabis market. Till now since 2010, many cannabis specific cryptocurrencies have emerged. To name a few, these digital currencies are: ParagonCoin, DopeCoin, PotCoin, CannabisCoin, HempCoin and CannaCoin.
The bottom line is:
Both blockchain and cryptocurrencies are making it effortless for the entire cannabis industry and those who are involved in the marijuana business. Starting from seed to sale, it can be extremely convenient to carry out transactions on blockchain platform. It will not be exaggerated to state that the future of budding cannabis industry lies in the blockchain technology.
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Sonal Mehta is a Content Lead at SoluLab, a leading Enterprise Blockchain, Enterprise Mobile Apps and Web development company, started by ex-vice president of Goldman Sachs and ex-principal software architect of Citrix. SoluLab Inc provides full spectrum, 360-degree services to enterprises, startups and entrepreneurs helping turn their dreams into awesome software products.