Promising blockchain applications for the cannabis industry by BTC Peers

On the surface, there is little evidence to link the blockchain and cannabis worlds. The former is a distributed ledger that records transactions of all kinds, typically those related to cryptocurrency. The latter is a plant-based drug used for medicinal and recreational purposes. And yet, these seemingly incoherent planets are increasingly entering each other’s orbits.

In recent years, we have seen many fearless entrepreneurs use blockchain technology to improve the cannabis industry. From decentralized autonomous organizations (DAOs) that enable community participation in the marijuana economy, to cannabis-based cryptocurrencies like CannabisCoin and RastaSwap, to hub ventures like Crypto Cannabis Club, blockchain-driven solutions are rolling off the production line at an increasing rate.

Although our own business Veriheal has not yet established a specific blockchain use case, there has been a focus for discussion in the company for some time. One thing that seems undeniable is that the intersection between cannabis and the blockchain will continue to provide opportunities, whether it is for profit, improved openness and security, or increased participation in society.

The Bud and the Blockchain

Perhaps the most obvious application of blockchain technology in the cannabis world is record keeping. Blockchain is an unchanging digital ledger, and it is the perfect system to ensure transparent tracking from seed to sale, especially when it comes to verifying the origin of each plant and ingredient.

As explained in a 2018 research article, a real-time blockchain tracking system can “reduce regulatory costs for governments and bureaucracy for businesses, and help achieve government goals of increasing public safety by ensuring quality and monitoring product sales.” Blockchain tracking can also help “undermine illegal markets to reduce crime and prevent product diversion.”

In addition, by using a public blockchain network, cannabis companies can harmonize their various supply chain processes, which see startups enter data into multiple platform-specific databases. The high throughput of modern blockchains means that they are able to create and authenticate traceable records of all transaction types, whether in the supply chain or B2C. The network can even record clinical cannabis research as suggested by TruTrace Technologies’ Robert Galarza.

Blockchain does not only standardize processes for marijuana growers, processors and retailers: its auditing ability is likely to be welcomed by regulators, as product and documentation tracking is completely tamper-proof.

Peer-to-peer (P2P) marketplaces are another promising opportunity that lies at the intersection of blockchain and cannabis. With 19 states and the District of Columbia legalizing cannabis for recreational purposes, cannabis dealers are running a roaring trade. On the other hand, many consumers still prefer to shop anonymously, peer-to-peer and pay in crypto, suggesting that P2P cannabis platforms may emerge in the near future. Nevertheless, the regulatory nature of the industry will severely limit the scope of these platforms.

When we talk about marketplaces, one of them, Crypto Drops, is looking for the growing NFT market for cannabis. The site offers a one-stop shop for those who want to buy, sell, collect and “cultivate” NFTs with a cannabis theme. In the near future, Crypto Drops aims to develop a virtual gamified world of cannabis collection and cultivation, offering digital breeders of coveted seeds that can be traded peer-to-peer. Users can also experiment by crossing different strains to create more desirable products.

Of course, Snoop Dogg has joined. Earlier this year, the West Coast rap icon launched a collection of “digital weed farm NFTs” in limited edition for use in the mafia Mobland with a mafia theme.

Crowdfunding for crypto and cannabis

Of course, the majority of consumers will always be most interested in the real thing: the cannabis they can touch and taste IRL. The best use of blockchain thus seems to be the one that gets quality goods in the hands of consumers.

For companies to make this a reality, they need financing. And some companies are thinking outside the box to increase investment. Take, for example, Global Cannabis Capital, a fund that invests in the start-up of cannabis in Latin America.

Recently, GCC began offering digital tokens representing stock positions in marijuana companies to investors worldwide. It’s a new idea, one that allows the fund to leverage a significant pool of supporters seeking exposure to the cannabis industry. The shares in question are tokenized on the blockchain.

With marijuana dealers still struggling to access traditional banking services and loans, we expect to see more new crypto-crowdfunding campaigns in the coming years. One investment that has come across our radar is CannaDAO, which leverages the wisdom of the crowd by giving users a stake in a community’s treasury. Holders of control symbols can propose marijuana investments to DAO, which jointly decides whether to invest. Planned to launch in early 2023, the startup will also offer indexing, benchmarking and rankings, with the goal of becoming the “Bloomberg of the cannabis industry.”

Interestingly, the number of global cannabis users is at the same level as crypto users: somewhere between 200 and 300 million. With such a large global audience, it is no wonder we see exciting synergies that bring the benefits of blockchain to the marijuana market. When you think about it, it’s a match made in heaven.

Continue reading on BTC Peers