New software gives cannabis companies a higher level of transparency and accuracy
As the cannabis industry expands globally, we are seeing a transition from a prohibition-era black market to a legitimate business with regulations and corporate interests. Yet some of the prohibition-era issues relating to secrecy are still firmly in place, and the lack of federal legalization in the United States means some clandestine practices and misdirection have been deemed necessary to protect honest distributors and retailers from potential legal consequences.
The byproduct of this is an industry where the accurate and honest tracking of products can be fraught and even unreliable. Even with modern, digital recordkeeping, the chance of misplaced or misappropriated shipments of cannabis are much higher than they could be, and to fully join the world of big business, the cannabis industry needs a means to ensure the integrity of all its transactions.
In order to combat this potential for irregularity, as well as a reputation of opaqueness that may hinder the growth of the industry, cannabis businesses have an increased need to track their dealings reliably and accurately. The clearer a record is available of all purchases, shipments, sales and assets, the easier it will be to present the industry as a legitimate and forward-looking industry. Technology seems to be the optimal place to look for such an asset, but knowing which solution to choose can be daunting. The correct software must offer best-in-class transparency and security to ensure that all phases of cannabis growth, transport and sale remain safe and clear.
This is where blockchain can come into play.
Enhanced security and accountability
First created to protect the integrity of cryptocurrency transactions, the blockchain is a revolutionary tracking technology that is changing the way businesses of all sorts are protecting their data. From their original users in crypto to major fiduciary, software and transport corporations, every organization with data to protect is investing in this cutting-edge system. By embracing blockchain, the cannabis industry can join companies like MetLife, Shell, McKesson, Prudential and British Airways in offering best-in-class security for its products and services, whether consumer-facing or B2B. Blockchain is changing the face of business accountability, and the cannabis industry would benefit immensely from association with that reliability.
Blockchain is a digital ledger that records data in discrete units called “blocks,” each linked sequentially to the previous and next blocks to form a chain. Every block has its own unique hash for security purposes and users must be able to access this hash in order to interact with the data in the block. However, the ledger is shared identically across all stakeholders — that is, all users involved with the data — giving everyone equal access to the exact same information, thus making them aware of any attempts to alter that information. This transparency and natural oversight provides unprecedented security for all business interactions using the blockchain and is thus perfect for tracking and validating cannabis transactions.
By sharing this ledger across all stakeholders, blockchain guarantees complete transparency. Since everyone can see the entire record at once, any attempts by anyone to change any of the data will immediately be known to the rest of that person’s business partners. If the change is legitimate and necessary, all partners are made aware and therefore able to anticipate what each new move means for them. For example, a grower who harvests a bumper crop can change the volume he or she expects to deliver, immediately making any shipping partners aware so they can buy or rent new transport equipment, or even take out a loan to do so. And when they apply for the loan, their bank — also included on the blockchain — has all the pertinent information through the ledger.
Blockchain also offers the kind of security only available through such a shared system. Since everyone has a copy of the same ledger, any alterations to existing data are immediately flagged and made known across the network. Stakeholders can be given authority to approve or reject any changes, creating a system immune to tampering or shady dealing. The entire endeavor gains legitimacy, as manipulation becomes nearly impossible.
Enabling innovation
Blockchain enables all sorts of business innovations as it keeps track of important information automatically. One such new idea is the smart contract. This type of business agreement is available only through blockchain and clearly lays out in its terms how much everyone gets paid per contribution. Then, when someone performs an agreed upon action and logs it in the blockchain, the smart contract automatically pays them the appropriate amount. No more accounts billable or accounts receivable bandying invoices and checks back and forth. The smart contract distributes automatic payments, keeping the supply chain running like a well-oiled machine and everyone involved aware of every new development.
As the cannabis industry becomes a bigger and more mature business, it will gain the legitimacy and respect it deserves. With its unique blend of transparency and security, blockchain is a powerful tool that can automate and monitor cannabis transactions, helping grow the field and create the legitimacy the industry should be built upon.
Robert Galarza is CEO of TruTrace Technologies, developer of the first integrated blockchain platform that registers and tracks intellectual property from genome to sale for the cannabis industry.