According to a new
report by Mike Peña, the
communications manager at Stanford Technology Ventures Program, blockchains
might allow regulators to exercise oversight over the pot supply network and
help stem illegal trafficking.
Using existing systems, government watchdogs in California,
for example, can only monitor so much. It’s estimated by the state’s Department of Food and Agriculture “that all but
2.5 million pounds of the 13.5 million pounds of cannabis produced in 2016 left
California,” Pena’s report stated, “a huge amount undoubtedly exported to
places where pot is still illegal.”
Ideally, digital ledgers would allow
interested parties to follow the supply chain of marijuana production from seed
sourcing to consumption. That means the ability to see where a product is at
The Golden State legalized
recreational pot use earlier this year. Currently, California authorities are
using a combination of radio frequency tags and software, but it’s not tracking
all of the marijuana being shipped.
California’s emerging “CalCannabis
Track-and-Trace” system, which is not blockchain-based, states that its tracking
methods “are not expected to eliminate illegal inversion or diversion of
cannabis throughout California’s commercial cannabis supply chain, but they
will be invaluable auditing tools for the state’s cannabis compliance and
Meanwhile in Canada, where marijuana is also being legalized, a
company called Greenstream
Technologies, a subsidiary of BLOK Technologies, is also
focused on supply chain transparency. Greenstream recently did an alpha launch
of a blockchain-based
platform for the Canadian cannabis industry. The platform is built on an
open-source Hyperledger stack.
BLOK is a public Vancouver-based company that invests in and
develops emerging startups in the blockchain sector. Greenstream states that
its cannabis platform “seamlessly
ensures supply chain data integrity, incorporates a cost-effective and legal
payment gateway for the exchange of value and includes an identity verification
Ideally, Canadian and other cannabis regulators will be able to
watch pot transactions as they happen.
It “will enable
real-time oversight of the entire cannabis supply chain — capturing the
complete history of transactions in perpetuity on the platform for anyone with
permission to see,” Peña noted.
Since a blockchain is a trust-based system and entries into a
distributed database can’t be altered, it’s hoped that it will provide a more
reliable and transparent way of tracking pot production and distribution. It
also might help governments maintain and improve quality control.
report written by IBM last year for the province of British
Columbia (BC), the computer giant stated that “blockchain [technology]
is an ideal mechanism in which BC can transparently capture the history of
cannabis through the entire supply chain, ultimately ensuring consumer safety
while exerting regulatory control — from seed to sale.”
tracking pot sales late last year. Blockchain technology could
allow stakeholders to “take control of sourcing,
selling and pricing of products while allowing producers to track inventory,
supply and demand projections and consumption trends,” IBM stated in its paper
for British Columbia.
The company has been promoting blockchain adoption for large
enterprise clients. Its suggested applications range from logistics to consumer
Will blockchain applications provide a foolproof solution for
regulators monitoring pot commerce who also hope to curtail the black market? It’s
unlikely to be a catchall, but the technology is sure to provide more illumination
of the path cannabis travels from the field to the consumer.