Challenges faced by the cannabis industry
Flawed supply chains
Under-regulated, relatively young and facing competition from illegal enterprises, cannabis businesses struggle to establish verifiable supply chains and to promptly and accurately detect fraud and counterfeiting.
Heavy taxes
Immense taxation when purchasing marijuana products remains a part of the legalization deal. Washington state currently collects 37% on cannabis sales; ITEP even recommends governments shift to per-weight taxation to combat falling tax revenues.
Illegal practices
Despite partial or full legalization in some jurisdictions, MarketInsider reports that its production and distribution are still mostly unregulated, with roughly 90% of all marijuana sales made illegally.
Restricted payments
Cannabis businesses face difficulty getting credit and finance. Under 3% of US banks are willing to provide financial services to cannabis businesses, according to MarijuanaBreak.
Complex value transfers
In traditional practices, value transfers — data, assets, and other items — require the presence of intermediaries, which makes these processes slow and inefficient.
Inadequate record-keeping
Legislatures that approved cannabis and marijuana sale require complete record-keeping of supply chains, from planting to distribution.
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Get expert adviceBlockchain solutions for cannabis from Aetsoft
Fast and secure payments
With decentralized blockchain-enabled assets, cannabis-related businesses can perform transactions in a fast and secure manner, without using regulated means of payment.
Regulatory compliance
For regulators having difficulty tracking illegal cannabis turnover, blockchain can become a panacea by allowing them to completely trace good’s transportation and money flows.
Legality audit
Make all sales verifiable and share data with all participants, helping to eliminate fraud and track purchases.
P2P transactions
Smart contracts bring autonomy to financial processes, free of third-party involvement, making value transfers direct and less costly.
End-to-end tracking
Traceable supply chains include data on all parties — farmers, growers, dispensaries, retailers — where any negative behavior will be immediately spotted.
Consistent breeding records
Blockchain can provide a single, transparent, and permanent database where companies could file info about weed and marijuana species, including growth, harvesting, THC/CBD balance, sales and reviews data.
Blockchain applications in сannabis
Use case 1. Regulatory-compliant deals
Currently
Unwilling to make deals on shady terms, buyers generally distrust sellers and likely refuse to deal with them at all; strict regulatory environment and transaction insecurity add to the cause.
With blockchain
Establish blockchain-enabled trades with digital assets; cryptographically-secure and regulatory-compliant, they set the scene for trustless settlements.
Use case 2. Consistent breeding records
Currently
Fragmented record-keeping leaves farmers with opaque breeding records, filled with gaps across viable data assets.
With blockchain
Establish a consistent database of breeding records, citing information about the entire breeding process of each plant, including THC, CBD, harvesting, and other data.
Use case 3. Transparent supply chains
Currently
From cultivation to sales, data opacity might expect you at any step of the supply chain, making monitoring and analytics both a challenge and risky venture.
With blockchain
Get end-to-end transparency across your logistics, with real-time, visible, and incorruptible records throughout transportation.
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