The marijuana industry is turning to blockchains to give it a boost
Over the next ten years, marijuana legalization across the U.S. is expected to generate a minimum of $132 billion in tax revenue and create upwards of a million new jobs. The industry is expanding exponentially and operators in the space are finding it difficult to keep up. Additionally, regulators are also facing challenges in ensuring that the products distributed meet guidelines and are properly recorded. In order to facilitate a more efficient, the industry is beginning to seek alternatives and the most widely accepted options are emerging through blockchains and cryptocurrency.
Marijuana is mostly a cash-only business due to federal banking restrictions. This makes handling serious amounts of money a dangerous prospect, with some companies resorting to armored vehicles to protect their assets. To reduce overhead, and to provide better security, many have begun to turn to cryptocurrencies as a form of payment, capitalizing on its decentralization and digital nature to offer greater protection.
The introduction of the blockchain into the industry allows cannabis to be tracked from production to distribution, consistently verifying its properties and origin. This also enables better and more accurate reporting that can help governments ensure they are receiving their share of the proceeds.
FarmaTrust, a company that tracks packages and pharmaceuticals through the blockchain, sees a lot of positive benefits to its incorporation in the marijuana industry. The company’s CEO, Raja Sharif, explains, “Blockchain and the supply of regulated cannabis is a perfect match. Cannabis producers are currently setting up facilities without any legacy systems in place, which means they can leapfrog old technology and use the latest innovative solutions.”
Blockchain technology, independent of the cryptocurrency markets, has already proven itself to be a viable option for supply chains and even financial institutions. It will continue to become an integrated part of virtually every industry and the cannabis ecosystem can benefit greatly from its positive characteristics.
