Cannabis Industry Pioneers Blockchain Adoption
Ryan Allway
June 19th, 2018
Exclusive, News, Top News
Blockchain technology is still relatively unknown, but like the internet in the 1990s, it could revolutionize many industries. A new report by Deloitte hints that retail and consumer packaged goods companies could be the most significant adopters over the next five years, with Wal-Mart Stores Inc. (WMT) and Amazon.com Inc. (AMZN) already experimenting with blockchain to secure their supply chain and reassure customers.
Deloitte’s new report, titled “New Tech on the Block: Planning for Blockchain in the Retail and Consumer Goods Industries”, was released earlier this month by Dr. Bryn Walton and Ben Perkins, two experts in the field of retail and consumer goods, as well as Steve Lark, a Deloitte partner in the area of technology consulting.
“We expect a tipping point within the next five years, as businesses begin to appreciate blockchains’ ability to track and trace products, record contracts and transactions, and guarantee the movement of information,” say the report’s authors. “The result will be widespread adoption of blockchain following a period of trials and pilots.”
Cannabis Offers the Perfect Problem
Deloitte sees blockchain technologies as a vital part of future supply chains, tracking products from manufacturing inputs through consumer returns. Within this sector, there’s one industry that perhaps needs blockchain more than any other — legal cannabis.
Canada has become a pioneer for the legal cannabis industry after legalizing the drug for medical and recreational use nationwide. In the process, it created a very strict and robust regulatory process to ensure that consumers receive high-quality products that aren’t tainted and deliver the promised mix of cannabinoids.
The problem is that these strict processes can be a high bar for cultivators, distributors, and retailers to meet with their limited resources. At the same time, the producers themselves are inventing how the industry works each day. For example, producers are breeding thousands of new cannabis strains, but there are no procedures in place to verify who owns those strains or how they can be used by other cultivators.
Blockchain technology was invented specifically for these types of problems. According to the report’s authors, “Blockchain opportunities in this segment relate to connected supply-chain, and authenticity and provenance.”
Blockstrain Technology Leads the Way
Blockstrain Technology Corp. (TSX-V: DNAX), a newly listed company on Canada’s TSX Venture exchange, has developed a robust system to streamline genetic and quality control testing of cannabis products, and to enter that data into a blockchain record that cannot be altered or edited without that change being discovered. In other words, it built the first blockchain system to track cannabis from “gene to sale”.
“When you deal with this strictly controlled substance, governments want to know where those shipments are; they want to know the product has been tested and is safe for the consumers; and, they want to make sure there is no diversion to the black market, which has been an issue in jurisdictions outside Canada,” said Blockstrain CTO Tommy Stephenson.
WeedMD Inc. (TSX-V: WMD) (OTC: WDDMF) (FSE: 4WE) became the first Canadian licensed producer to adopt Blockstrain, and the management team was so impressed that they invested $500,000 into Blockstrain’s parent company. CFO Keith Merker believes that the key value is protecting WeedMD’s intellectual property as it develops new strains that could each be worth millions of dollars.
“Unique and differentiated strains and product offerings have always been, and will remain, a cornerstone of WeedMD’s business model,” says Merker. “Validating and protecting that intellectual property through BLOCKStrain’s platform will prove invaluable as we scale operations and broaden our distribution throughout the country, as well as internationally.”
Deloitte analysts suggest that blockchain technology adoptance could be critical for companies to survive in supply chain-driven industries.
“The rationale for and value of investing in blockchain will depend on a company’s overarching strategic objectives as well as its capacity, capabilities and culture,” the report points out. “However, those who do not consider the possibilities are at risk of falling behind. By contrast, early adopters of the technology will have the ability to gain first mover advantage in generating value for their business.”
Blockchain investments have already hit $1.7 billion over the past three years among global companies. Market research firm, Gartner, believes that blockchain’s business value-add will reach $176 billion by 2025 and exceed $3.1 trillion by 2030 as more and more companies harness its benefits.
Blockstrain trades on the TSX Venture exchange under the symbol DNAX. WeedMD trades on the TSX Venture under the ticker WMD, and also trades on the OTC and Frankfurt exchanges.
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The above article is sponsored content. Emerging Growth LLC, which owns CannabisFN.com and CFN Media, has been hired to create awareness. Please follow the link below to view our full disclosure outlining our compensation: https://cannabisfn.com/legal-disclaimer/
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
About Ryan Allway
Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.
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