Blockchain Technologies and how they help serve the Cannabis Industries Toughest Problems

In States where cannabis is legal for either medical or recreational purposes, regulations about how cannabis is tracked from "Seed-to-Sale" in order to make sure all product is tracked in order to eliminate diversion and non-licensed cannabis that ends up in a Dispensary.


This brings up the question: what is the most effective and transparent way to keep track of these plants from cultivation center, to testing facility, to dispensary, and sale? While many States contract a third-party SaaS Company such as METRC or BioTrackTHC, one new solution that is proving very effective is Blockchain.


To understand how this technology helps the cannabis industry in states, first it would help to understand of how Blockchain works. Blockchain was primarily started to keep track of cryptocurrency exchanges, however, it is used for all sorts of other information tracking.


Understanding Blockchain

To understand it better it might be best to think of these blocks in the Blockchain as Lego blocks. First, when a piece of information is created, it becomes its own block, this would be the first Lego block set down on the ledger.


Then, any change made to the information in the first block would not alter the first block; instead, the change would create a whole new Lego that would stack on top of the initial Lego, and any other changes to any information in any blocks would constitute a whole new block.


If it were another change to the information in the first block, it would go on the second row, any changes to the information in the blocks on the second row would entail a new block on the third row, and so on. This means that when someone goes back and looks through anything that would be in this block, lets say a document, then it would provide a clear history of the original document, all the changes made to the document, when they happened, and any changes to the changes.


The best part about Blockchain is that it is decentralized; when the original block is shared with people it just creates a multitude of those blocks, and then keeps track of all changes made to each block. This is significant because it makes Blockchain almost unhackable, since there is no central location a hacker can try to get to in order to change anything within any block for everybody the block was shared with.


How does this help the cannabis industry?


Take a Cultivation Facility, where once a plant is planted and tagged for batch identification, a block is created that travels with the plant through to harvest. After harvest, the batch makes its way to a testing facility where another block is created; whether or not that certain plant and/or batch passed testing adds another block.  As the batch it is transported and delivered to a dispensary, another block is added, and when it is sold, another block.


This makes for a very transparent and easy way for regulatory bodies to track a plant from seed to sale, which can give the regulators and the operators of each facility an easier time. However, this helps the cannabis industry in another way, by giving customers a more personalized experience.


Improved orders and customer service


Let’s say that a customer signs up for text alerts for when their favorite product comes in. Using Blockchain it would be easy to see what this customer buys, what they buy most often, and when the Dispensary will get more of that specific product in.


This way the Dispensary can alert customers in an efficient manner of their favorite products being in stock, which can help to retain customers and add new ones as well.




Supply Management Solutions


Blockchain seems like it could work wonders for the cannabis industry, and there are places where it is implemented and debate over if it should be implemented. Take Thailand, for example, where local Companies have partnered to start using blockchain to help reduce any amount of counterfeit drugs from entering into their marketplace.


This is easier with blockchain because if a certain product being sold does not have a chain of blocks, then it isn’t produced by a licensed cultivator, helping to ensure pharmaceutical product quality.


The technology is currently being used to secure the supply chain for medicinal cannabis and poppy straw, and the use of blockchain will provide an opportunity to use better data to create new efficiencies and opportunities to scale the inclusion of smallholder farmers, communities and low-income consumers in the region.


Supply Management Solutions


Closer to home, certain businesses in Canada, where marijuana was just legalized, have started to utilize Blockchain in order to keep transparency and keep within government regulations. They also have been utilizing this technology to give their customers a personalized experience and keep them coming back.


Here in the United States


Right now in California Stanford researchers are making the case that blockchain could help reduce the amount of cannabis sold that are coming in from cartels. However, California’s current tracking system is not blockchain-based.


Even IBM Corp., one of the bluest of U.S. blue-chip companies, is touting blockchain as the supply-management tool of choice, and "has been promoting Blockchain for industries from financial services to consumer retail and cargo shipping in recent years."


While those on the West Coast are hopeful that, if implemented, Blockchain Technologies could help greatly reduce the amount of products sold from illegal sources, and hopefully improve the overall supply chain for safe access to Cannabis in legal States across the U.S.


Authored by: Will Knight (Business Development Intern)