Links between the tech industry and weed are already in place for years. Medical, for example CBD, and recreational marijuana use are widely accepted in the tech industry, but there are more parallels between the marijuana and the tech industry, especially the blockchain industry. For example, both marijuana and blockchain, especially cryptocurrencies, were industries that where frowned upon and are now more and more reaching the mainstream.
Parallels between blockchain and cannabis
But there are more parallels between these upcoming industries. Both industries frequently use summits to bring the industry together to exchange information and showcase products. In some cases, blockchain and cannabis summits are expected to draw in visitors interested in both subjects. “Blockchain Island” Malta hosts a cannabis summit that will be directly followed by a blockchain and AI Summit.
Another similarity between blockchain and the cannabis industry is that the regulation is sometimes a bit hazy or still under development. Since these industries are quite new, regulators haven’t accounted for all the possibilities these industries bring. Rules and regulations are far from standardized, which poses challenges to the growing industries, that want to comply with the law, while the legality is sometimes unclear.
And of course, both blockchain and cannabis are growing to become big markets, which will lead to big changes in the agrifood sector and the economy as a whole. The blockchain and cannabis sector are even interwoven, there are multiple cannabis focused crypto currencies in existence.
What the food industry can learn from the marijuana industry
Logistics and supply chain management are the strongest cases for blockchain adoption, according to Cointelegraph in a 2018 overview on crypto and cannabis. We at the Fork wholeheartedly agree and we watch the technological developments in upcoming cannabis industry with interest, to see what can be applied in agrifood.
More and more countries legalize the medical and recreational use of marijuana. In the 1970’s the Netherlands was a pioneer with its gedoogbeleid (policy of tolerance) on soft drugs. Currently countries like Canada are overtaking the pioneering role by legalizing medical and recreational use of cannabis. Medical marijuana is currently legal in majority of the USA and recreational marijuana also accepted in more and more states. With legalization comes professionalisation of the cannabis industry.
With legalization and professionalization comes a consumer demand for proof of safety and quality of their cannabis products. A fully legalized marijuana industry poses opportunities for making the cannabis supply chain more transparent and using new technologies to satisfy consumer demands. The investments in technology for the upcoming cannabis industry show what’s possible for the agrifood industry.
This month’s Forked News will cover the latest news on blockchain for cannabis. These are the articles that will be discussed:
- Arizona to Test Marijuana-Oriented Stablecoin in State Fintech Sandbox
- Shoppers to use blockchain technology to track medical cannabis quality
- CBD farmer trials blockchain supply chain app, says it’s better than Excel
1. Arizona to Test Marijuana-Oriented Stablecoin in State Fintech Sandbox
The state of Arizona has accepted a blockchain-payment solution focussed on the cannabis industry into their regulatory sandbox. The cannabis industry, which is rapidly legalizing in the United States, is currently experiencing the problem that this industry is cash heavy in an economy that expects digital payments. While cannabis for medical use is currently legal in the majority of the states of the United Stated of America, it’s not legalized yet on a federal level. This leads to difficulties for cannabis businesses to conduct their business digitally.
Blockchain, by means of crypto currencies, can offer cannabis businesses an alternative to the cash economy. Not only Arizona is aware of this possibility, California proposed a bill in February that would accept crypto for tax payments from cannabis-related businesses.
Insight from this read
Blockchain is an alternative for cash economy. Cryptocurrencies can facilitate payments, without the need for a bank. There are cases in existence of blockchain as a tool to serve the underbanked. An example is the use of blockchain to provide micro loans in developing countries, but as this article states, even in the United States, some entrepreneurs are forced to conduct their business with cash, which leads to difficulties, for example with paying taxes. While making digital payments without banks possible, blockchain also offers greater efficiency and transparency to the companies using it.
It’s interesting to see that the California bill proposes pegging blockchain to the dollar. Where cryptocurrency is often presented as an alternative for fiat currency, it’s now a different kind of digital representation.
2. Shoppers to use blockchain technology to track medical cannabis quality
That marijuana is becoming more and more accepted in the mainstream is shown by the fact that Martha Steward was a speaker on World Cannabis Congress. It is also shown by Shoppers Drug Mart, that wants to offer their shoppers a standardized marijuana product.
Shoppers Drug Mart is piloting blockchain for quality assurance in medical marijuana. While prescriptions drugs are checked and regulated, medical marijuana is harder to standardize on the effective drug content than lab-created drugs. In order to provide correct quality information and consistent products TruTrace Technologies will track the marijuana from seed to final product, confirming the genetics of the product.
Insight from this read
The article is not fully describing how tracking will ensure standardized marijuana quality. This article is a bit more specific and explains that TruTrace is monitoring the DNA of weed plants. However, while DNA-accounts for properties of marijuana it’s unclear from the article if there might be external factors that contribute to differences in quality, like the amount of light and water that a plant received. The article also doesn’t mention if there is any testing on the CBD and THC levels of the drug or other additional test apart from the genetics test. Therefore, unclarity exist whether the current DNA-test is sufficient to the support the claim of standardized quality.
Blockchain verified DNA is also interesting for the food industry. You might remember the 2013-2014 European horse meat scandal, where meat products across multiple European countries contained undeclared horse meat. Having the DNA of meat products registered on a blockchain, will make it harder to sell horse meat as beef.
3. CBD farmer trials blockchain supply chain app, says it’s better than Excel
“Treum, a ConsenSys funded blockchain software developer, has built an interface in conjunction with Verified Organic, a similar company, that allows farmers to log metadata about their crop yield—the fertiliser being used, the type and variety of seed being planted, and the irrigation technique—and timestamp it to the Ethereum network, allowing auditors to verify that the food has originated where the farmers say it has originated.”
For the farmers in this article the app replaces Excel. The app also enables them to make immutable claims about their product. However, immutable is not necessarily synonymous for true.
Insight from this read
A new industry might create the need for a new type of farm management platform, since it might attract new agrienterpeneurs that are not used to the existing farm management platforms. They might have different demands from farm management platforms, like a slick UX and UI.
Blockchain can work as an added feature for a farm management platform, both in the cannabis industry as in agrifood. Blockchain can help farmers make immutable claims about their farming processes. However, as the article shows, all the ‘proof’ this blockchain solution gathers of the input of the farmer is the farmers word. That means if the farmer makes a mistake or lies, it’s recorded in the blockchain as the truth. Therefore, for this app to make fraud-free claims to consumers, the option of adding documents and tests as additional proof is needed. Currently, as the article suggests the app can be used by auditors to gather information before doing audits, but it doesn’t make proven claims to end consumers.
Incorporate these insights
For agrifood professionals it recommended to keep an eye on the growing cannabis industry. This industry has a need and a budget for technological advancement. What can the agrifood industry ‘borrow’ from the marijuana industry?
The other way around, agrifood already has established technologies and practices in place. Cannabis professionals should consider looking at these practices before re-inventing the wheel (or the concept of farm management platforms).
If you have a question or if you would like to discuss this blog. Feel free to join the Strike Two Summit LinkedIn group, our next meetup and the Strike Two Summit We’d like to hear from you and we’re happy to answer your questions.
This was the 10th issue of The Fork’s monthly newsletter. Every month we choose a hot topic and curate and select the most relevant article’s, report and news surrounding this topic to bring you up to date! It is our mission to make sure you get all the info you need to stay ahead of this new technology in one single mail per month.
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