3 Reasons Why Using Blockchain for Cannabis Extracts Makes Sense
There’s been nothing short of a mad dash for businesses trying to get in early on the blockchain bandwagon. Industries and entrepreneurs from all walks of life are wanting to implement blockchain into their business model. And why not? The appeal of a decentralized, 3rd-party-less, transparent, cost efficient and trendy distributed ledger is almost too good to pass up.
But as many teams begin to realize, after the real work of matching a blockchain solution to a business model begins, a wide gap emerges between blockchain ideals and realistic implementation. Most especially this is true in a technology that’s not only new and green, but also one that often presents as too advanced for the average Joe.
Savvy leaders in the blockchain movement see the long term marketplace potential for decentralization via blockchain. They look for unique ways to take the best of blockchain technology to enhance business.
The team at Cannabium conceptualized an open marketplace in which verified participants could actively trade in wholesale cannabis extracts. They wanted to enable B2B transactions to help distribute a wholesale product that has high demand and many potential health benefits. A blockchain solution made sense for their vision in many ways, including these three:
1. Gray Area Markets and the Quasi Legal Environment of Cannabis Extracts
In the US during the early years of legalized cannabis, even though some states legalized the operation of dispensaries, these new cannabis businesses were largely forced to operate in cash-only due to federal regulations imposed on banks and credit unions.
Since federally, cannabis is still a scheduled drug, this put even commercial and community banks in a very tough position. As a result, many of these early entities turned to cryptocurrency because it allowed a gray market in which to function without relying completely on an all cash operations. Since those early days, cannabis legalization has spread further across the US and internationally. The extracts of the cannabis plant, such as non-psychoactive CBD, are now used widely in medicinal, cosmetic and supplemental preparations and are increasingly in demand.
It is this same gray area of regulatory impediments as seen with the first cannabis dispensaries, centralized, regulatory agencies have not yet caught up to newly legal products like Cannabidiol (CBD). Currently, when one buys wholesale CBD, it is anybody’s guess where the product came from, what the purity level is, and whether or not it’s a legal transaction. Blockchain technology offers the transparent, secure mechanism so needed by the cannabis extracts industry today.
The Cannabium Marketplace creates an environment that adheres to regulations, import and export licenses, and product certifications that together create a cannabis extracts marketplace that makes sense.
2. Why Transparency in Blockchain Matters
Transparency is one of the true hallmarks of blockchain technology because the complete chain is visible to all from the first genesis block up to date. The whole idea revolving around blockchain is based upon transparency, because it is designed to have all transactions publicly visible and recorded from the beginning.
Transparency can be of utmost importance in many ways, for example, in the supply chain, as it helps to build consumer confidence. It also assists in creating a system of price discovery, as buyers and sellers can both see past buys and sells. Currently, for price discovery within the cannabis extracts market, you would need to go to numerous wholesale websites offering a wide array of prices but offering no real meaning to the price as it relates to some standard product.
The Cannabium team recognizes the need for transparency in an emerging marketplace for a product that is just seeing legalization. Blockchain technology offers a distributed, secure and immutable record of transactions within the Cannabium Marketplace for participants to buy and sell wholesale cannabis extracts, fortified with market knowledge provided by the blockchain.
3. Cost Savings of a Blockchain Marketplace like Cannabium
The Cannabium Marketplace for cannabis extracts eases the costs for both wholesale sellers and buyers. Verified producers (sellers) save on the expense of individual marketing strategies for multiple platforms when they join a buyer-riendly ecosystem like Cannabium. Just by being on the Cannabium platform, sellers’ products are offered to buyers, while buyers no longer have to go from marketplace to marketplace in search for the optimal ratio of price and quality. This all will be done for them on the Canabium Marketplace.
Additionally, both buyers and sellers enjoy lower transaction costs due to the lack of 3rd party intermediaries, a feature that is inherent with blockchain technologies. In the Cannabium Marketplace, buyers and sellers will meet without intermediaries. This will automatically reduce the cost of transaction fees and other charges that may be put into place by third parties. Transactions will be less costly than via traditional methods.
The Cannabium Team envisioned a cannabis extracts marketplace that takes the best of blockchain technology to create a better way to buy and sell cannabis extracts. Learn more about the unique features of the Cannabium Marketplace, including how Cannabium tokens are correlated with CBD, by following us today.
1 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3215345
Cohney, Shaanan and Hoffman, David A. and Sklaroff, Jeremy and Wishnick, David A., Coin-Operated Capitalism (July 17, 2018). Available at SSRN: https://ssrn.com/abstract=32153452 https://www.ganjapreneur.com/the-current-state-of-cannabis-business/
