How the blockchain will secure the future of cannabis research
Blockchain is a foundational technology with great potential for regulated cannabis operations, where security and transparency are paramount for success.
Blockchain is arguably the most talked about and least understood technology on the market today. You can bet that a majority of readers who see this word immediately think of one of three things: Bitcoin, “that cryptocurrency with a dog on it,” or Elon Musk. In many ways, the cannabis industry isn't that different. Most readers, who have little or no knowledge of the industry, tend to evoke the image of famous boutiques or that of Cheech and Chong, or at least think of the image of “hippies in ties” who talk, for example, about government conspiracies. or peace on earth. In reality, both sectors are incredibly complex industries and dynamic who are growing rapidly and attracting some of the best talent.
The parallels do not end there. Blockchain is a fundamental technology, that is, a technology that allows other technologies to be created on top of it, called transformational technologies. A simple example would be the relationship between the internet (foundational technology) and something like email or social media (transformational technology). Blockchain can do a lot more than cryptocurrency. It enables the creation of decentralized and immutable ledgers, near instantaneous verification of information and many other use cases.
To truly understand where the use of blockchain can be most effective, one has to start by understanding the basis of some of the issues and challenges present in the cannabis industry. First of all, cannabis is in the process of legalization and as such requires complex levels of tracking, tracing and surveillance of products at every stage of the production cycle. Cannabis also needs careful checks on vital information such as funds, license and many other key details due to frameworks created to bypass this precarious legal situation. Add to that the lack of conventional banking services and it would seem that the problems of managing cannabis are insurmountable. This is where the blockchain comes in.
Let's start with the most basic founding principle of blockchain technology: Immutable Ledgers. Simply put, these are lists of data that cannot be edited. Sounds a lot like what's required in seed tracking and traceability systems for the sale of cannabis, right? This is indeed the case. Cannabis tracking and traceability programs rely on correct data that follows the seed throughout its growth, in its batch at harvest, then in its packaging to retail, or through a series of additional steps during extraction.
The ability of cannabis operators to follow all parts of a plant through all stages with complete accuracy is a prime example of the use of blockchain in the cannabis space. This comes after the ability to track inventory for internal business purposes and, in addition to meeting regulatory requirements, would be all the details needed to verify a potential deal. Blockchain data enables smart contracts. Smart contracts are essentially interactions controlled by algorithms without the need for third-party verification. Imagine a world where operators do not need to manually verify a license or proof of funds. Where the need to request a certificate of analysis is not an obstacle to overcome, but rather an intrinsic part of the process. This is what smart contracts can do. A provider uploads all the data to a given blockchain, and a buyer does the same. With no extra effort, all of this data is verified, tracked and shared at the appropriate stage.
Beyond the data security and reducing the amount of work required for a given transaction to take place, the other concept that most people probably think of when considering blockchain is cryptocurrency (or Crypto, for short). This form of payment method can be easily understood in terms of video game. No one is shy about spending gold, gems, or rubies to buy something in their favorite app. The same mechanisms can be applied to real-world transitions. It can be a bit of a gray area legally, but multiple companies and states are working on solutions that allow better access to banking and financing - something that has been a problem for the cannabis industry since its inception.
Essentially, blockchain provides a level of security and transparency that is not unique to cannabis, but of the utmost importance when looking at the current and future landscape of the cannabis industry as a whole. As previously stated, blockchain is just the foundation that will allow operators in the cannabis industry to find new and exciting solutions to the ever-changing landscape or the obstacles and issues facing the industry.