Blockchain technology has a lot to offer the cannabis industry, whether it’s monitoring consumption, creating a less expensive and more efficient regulatory authority, improving transparency on cultivation methods, providing new means of payment, or even creating better networks of cannabis-centric social media. Here we take a look at how blockchain can be integrated into the cannabis industry.
Integrating Blockchain Technology into the Cannabis Industry
Blockchain technology has the potential to better serve everyone, from early experimenters to the most discerning consumers. Nowhere is this more true than in the cannabis industry. Whether it’s monitoring consumption, creating a less expensive and more efficient regulatory authority, more transparency on cultivation methods, new means of payment, or even creating better networks of Cannabis-centric social media, blockchain has so much to offer.
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What are the challenges of the cannabis industry?
Since the legalization of recreational cannabis in many American and Canadian states, the transition from an illegal to a legal market has encountered many obstacles.
According to one’s view of the industry, it is perhaps unsurprising that some cannabis is still produced and sold through illegal channels, and there are several reasons why the growth of legal cannabis was not as fast as expected:
- Reduced access due to a limited number of stores
- Higher legal product prices
- A smaller selection of products
- Shortage of supply in-store and online
- Home delivery prohibited
- Lower quality of legal products
As the cannabis industry grows, some of these problems are being solved, whether by increasing the number of production licenses, encouraging the transition from illegal growers to the legal market, or not restricting the diversity of existing cannabis products.
How can blockchain help?
As mentioned above, the apprehension of legal cannabis exists, sometimes for good reasons (lower quality, bans on edibles, etc.). Marketing is also restricted for retailers and licensed producers, preventing the dissemination of relevant information about the consistency, safety, and quality of legal cannabis.
Health concerns have been raised about vaping cannabis concentrates, leading to temporary bans on these products in places like Massachusetts in 2019. And with many producers and suppliers, it can be difficult for consumers to find their preferred products.
Blockchain is a decentralized digital technology that keeps records of all transactions within a network. Records of these interactions are kept in a decentralized network system. Each batch of transactions on a blockchain is called a block, and each block is sorted chronologically to form a chain. Since there are thousands or millions of copies of the same string, the software can quickly check previous ledger entries.
Blockchain has become known for its use as the engine of various cryptocurrencies, but it can also be used for much more.
Transparency on the origin of products
Like all supply chains, cannabis industries can benefit from the enhanced provenance systems that blockchain can provide if all participants sign-on. This can provide suppliers and customers with the peace of mind that comes from knowing how the cannabis was grown, by whom, and that no nefarious elements were involved in any part of the supply chain, whether for B2B exchanges or consumer information.
The idea is not to have a tracker in your pocket that would send data to the regulatory authority of your state/country. Instead, whether it is to respect the legal quota for the purchase of cannabis that states set daily/monthly, or to monitor its consumption, the introduction of blockchain technology to regulate individual sales can represent a happy medium between total liberalization and excessive follow-up.
We can also imagine using the blockchain to help understand the use of medical cannabis against opioid abuse, for example, and derive personalized recommendations for patients.
Cannabis Social Media
Businesses and individuals can use specialized, blockchain-based cannabis forums and social networks to meet like-minded people, access special offers, and connect with geographically nearby cannabis-related businesses. from them or more distant.
These companies are currently prohibited from advertising on most social networks, as they are still considered “illegal.” By creating a space for a cannabis-friendly audience receptive to their message on a platform that escapes strict social media bans, users and businesses can feel free to interact safely, without fear that simple searches do not reveal their identity. This kind of anonymity is one of the many benefits of blockchain technology.
Facilitate tax recovery
As we saw recently with California, adequate taxation indexed to the right location in the supply chain can make the difference between a flourishing market and a more complicated market.
By integrating blockchain technology into stores, taxation could become more accurate, audits easier for all parties, and more revenue flowing back to citizens of states that have legalized cannabis.
Cannabis Industry Banking/Payments
Since cannabis is still illegal at the federal level in the United States, companies are prohibited from accessing banking services and operate mainly in cash. Even in Canada, where cannabis is legal, access to banks for cannabis businesses is still complicated. However, blockchain offers a viable alternative.
To this extent, several cryptos – BitCanna (BCNA), HempCoin (THC), DopeCoin (DOPE), CannaCoin (CNN) – have emerged as viable alternatives for cannabis entrepreneurs. These blockchain based crypto coins can generally be used to pay for goods and services, exchanged on particular exchanges, and issued in regular currency if necessary.
Their value increases as participants buy and is indirectly linked to both the blockchain and the cannabis industries’ success. However, until traditional banks become more accepting of cannabis revenue, this blockchain technology may appeal to entrepreneurs who don’t see the space under their mattresses as a viable alternative.
(Featured image by RODNAE Productions via Pexels)
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