Blockchain offers a fresh and interesting solution for cannabis companies to provide a level of transparency to their customers that allows them to maintain solvency. This distributed database features a de-centralized location that allows the public to see if the whole supply chain is done correctly. The ability to transfer a unique piece of digital property to another Internet user in a way that keeps their data safe from hackers is something that is tremendously advantageous for cannabis industry businesses to invest in.
Blockchain technology allows smaller organizations to scale up their operations faster and improve workflows within their value chain. These global hack-proof ledgers are ideally suited for storing valuable consumer data to many different collaborative and potentially competitive parties. Let’s see how blockchain can impact the economy of the cannabis industry and improve transparency between consumers and companies alike.
The Economic Impact of Cannabis and How Blockchain Can Help
Blockchains present unalterable ledgers that anyone in the world can view, and everyone can verify. Injecting blockchain’s distributed architecture into the cannabis industry may just be the solution that the industry needs to band together and overcome future potential instances like the hacking of the “MJ Freeway” servers that occurred in 2017. This single event nearly shut down the cannabis industry across the country, forcing dispensaries to use paper-based order processing for weeks on end.
The stressors that comes with operating at extremely high volumes is a nightmare for cash-only businesses and regulators alike. What ends up happening is that regulators have to sift through paper financial receipts ultimately ending up with an unclear view of the company’s tax liabilities which make for awkward conversations when talks of regulatory policy leniency come to the table on Capitol Hill. Blockchain can end the need to keep paper invoices for fear that consumer data might be stolen at some point after the point of sale, thus giving cannabis companies peace of mind to operate with heightened oversight on their organization as well as the industry at large.
With the economic impact of the cannabis industry on the U.S. expected to reach as high as $77 billion by 2022, companies need to make a more concerted effort towards protecting their customer’s data at the point of sale. As the industry continues to grow at a rapid pace and regulations lagging behind, business owners are faced with Wild West high stakes risky scenarios as they continue to rake in millions of dollars in revenue. Being able to trace the full supply chain at of cannabis a glance via blockchain means both retailers and end-users can be assured that the product they’re buying is exactly what it says it is.
Increasing Financial Oversight via Blockchain Technology
Blockchain technology can be used in the cannabis space the same way it can be used in any industry allowing businesses to record everything that current tracking systems do through the blockchain. This makes it harder for hackers to manipulate growing records and faster and easier for companies to track their production levels. It can also make remediating issues within their product pipeline a thing of the past. If a problem arises in the development of a cannabis strain, the blockchain can immediately trace the origin of the strain in seconds rather than weeks or months of manual research.
This increased oversight ability provides businesses with tangible proof of the point of origin for all consumer-related activities that enables them to manage their supply chains in real-time. This altogether eliminates inefficient paper trails, thus allowing for effective vertical integration of the blockchain in a company’s supply chain that frees up potential lag or loss of product in the future.