The cannabis industry is one that’s constantly expanding. In the US alone, the marijuana industry could be worth about $50 billion annually by 2026, and that’s just one country, where the many states currently don’t allow recreational marijuana.
Because of years of spotty regulations, criminal laws, and the nature of the industry itself, the regulatory environment is incredibly fractured, with the US government leaving legalization and then regulation up to the states. Other countries take similar tactics, even as marijuana becomes less stigmatized and more mainstream.
Even as more and more governments become open to the legalization of marijuana, the industry still is grappling with seemingly standard business practices.
For example, many landlords are hesitant to rent space to a cannabis company, often, it’s seen as more trouble than it’s worth given they may see it as one more headache when already dealing with building laws. Banks also view such companies with skepticism (even once they’re legal) and so the industry has largely developed into a cash-only industry, which makes things such as payment tracking and verification difficult. Accounting and bookkeeping? Good luck.
But blockchain could represent a compelling way to stabilize the cannabis industry, and incorporating it into a cannabis ICO you may be considering could make all the difference. In some cases it may even soon be the law.
This idea is already being floated by larger companies. According to a 2017 report from the global technology company IBM , they’re working with the Canadian government as it “prepares its regulatory framework in support of the legal distribution of cannabis and cannabis by-products,” as some provinces look into legalizations. In the report, IBM supports and proposed a blockchain technology could enable an entirely transparent, tamper-proof system to track marijuana from “from seed to sale.”
There are also laws around tracking legal cannabis being proposed, most recently in the state of Colorado, in the United States, where bill SB 18-029 would explore ideas for tracking agents that allow law enforcement to trace cannabis back to its growers. “The applied agent must contain identifiers that are traceable using distributed ledger technology to store records that can distinguish whether the marijuana is legal medical or retail marijuana or industrial hemp,” reads the bill, meaning even governments are considering the utility of blockchain when it comes to cannabis.
And while there certainly may be distrust around governments mandating tracking, it serves practical purposes for your customers as well.
Blockchain is already in use in chain of custody and distribution applications for many industries already, such as the food and pharmaceutical industry. Similarly to these industries, the cannabis industry has a distinct interest in and benefits from developing transparency and accountability with regulators and their customers. Such practices can lead to less regulation down the road, and a greater number of customers.
Areas such as ensuring compliance and benchmarks with governmental bodies like the FDA to ensure the health and safety of customers, the documentation of the strain quality of your product, preventing nefarious activities such as fraud and counterfeiting, and reducing the middleman footprint are all made much easier through integrating blockchain into your company, and should be reasons to include it. Additionally, it will greatly aid in organizing bookkeeping and accounting, while helping you keep an eye on payments in a way not previously practiced.
The benefits are there, it’s just a matter of making sure you begin to integrate blockchain before it potentially becomes mandatory to keep ahead of the curve.
Blockchain is coming to the cannabis industry, and with both becoming more mainstream and profitable, the time is now to seize on this combination. IBC offers a range of services that can help you deliver on this promise.
A full description of them can be found here.