Blockchain – The Cannabis Traceability Solution?


Blockchain is frequently in the news.  While the primary focus has been using blockchain technology for cryptocurrency, many are discovering new uses on a daily basis. 

As discussed in a recent Entrepreneur article, researchers at IBM, and many businesses in the industry, see blockchain as a solution to the challenges around seed-to-sale tracking of cannabis – while also giving businesses the ability to manage inventory and resources. 

In Washington State, we saw the challenges of the seed-to-sale tracking system arise when the Washington State Liquor and Cannabis Board (WSLCB) changed traceability software providers. BioTrackTHC’s contract ran out on October 31, 2017. However—as highlighted in a prior blog post—the launch of Leaf Data Systems (an MJ Freeway product) was delayed, creating havoc in the industry.

Until recently, Washington licensees had been submitting spreadsheets of their data to the WSLB, some taken by hand, until Leaf was finally rolled out. Leaders in the cannabis and technology industries now believe blockchain could offer a better solution to tracking cannabis sales and related data.

The idea of using blockchain in the cannabis industry originated last year (2017), when the IBM researchers submitted a paper to the government of British Columbia in Canada. At that time, Canadian officials were looking for ideas for tracking marijuana (they are hoping to legalize recreational marijuana this summer). IBM argued that blockchain was the answer to not only tracking cannabis sales, but also for inventory management, and providing statistics to help project supply and demand.

Why blockchain? 

Blockchain creates a distributed ledger—making it more resistant to cyber attacks—and, therefore, keeping the data more secure. Cannabis companies are hoping to leverage this technology to provide a complete inventory tracking system, and record data such as the effects of each specific strain of cannabis on the consumer.

As the tracking of cannabis is a highly sensitive regulation, could blockchain be the answer the industry is looking for? 

We are anxious to see if and how collaboration of these two worlds will impact the industry.