Bringing Cannabis into Public Credence with Blockchain

22 December 2020
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Blockchain technology revolutionizes the way we operate our enterprises. From healthcare to real estate and now the cannabis industry, Blockchain’s array of features are bringing efficiency in the operations. Despite the hype, exposure to supply chain risks is consistently on the rise.

The cannabis industry faces various challenges in its supply chain due to a lack of awareness, regulations, and technologies. In countries where cannabis is illegal, it is exported for the sake of money, but as a consequence supply shortages are noticed in countries where cannabis is legalized for medicinal purposes. Hence, Blockchain technology is the required innovation in the cannabis supply chain management system.

The challenges in Cannabis Supply Chains

Almost 80 percent of the cannabis sold in California is traded from the black market. Long term success of the cannabis industry and supply chain depends upon how efficiently a Blockchain supply chain developer builds a successful supply chain system to address various challenges.

1. Unregulated trade:  In various countries, cannabis is illegal but is very high in demand, traders operate unregulated trade in such countries. Many consumer surveys also reveal that many consumers also don’t want to switch to legal channels.

2. Poor support from banks: Financial institutions have a suspicious stand towards the cannabis industry. According to a report by MarijuanaBreak, only 3 percent of financial institutions are ready to provide financial back-up to the cannabis sector.

3. Contrasting regulation: Tracking the seeds right from plantation to sale is important to maintain proper compliance with rules and regulations. Similar to alcohol and tobacco, province legislative differences are seen when the product is moved across borders.

4. Data fragmentation: In today’s era, the cannabis industry suffers from data fragmentation and poor record-keeping of the supply chains. As various industries are involved, businesses are forced to maintain records and operate under these inefficient conditions.

Use cases of Blockchain technology

The times are changing, and nothing supports this fact better than recreational marijuana is now legalized in 9 states while 29 states have legalized it on medical basis. To regulate this trade, it is important to integrate Blockchain tech to better serve everyone from first-time experimenters to the most enlightened partakers.

1. Limiting over-consumption

[Source: CryptoNewsZ]

Even in the countries where marijuana is legalized, there are parameters on how much an individual can purchase, consume, and sell. However, these regulations are difficult to enforce and take a strong individual identification system to scan fake people.

Looking at the complexity of the system, it is safe to say that introduction of Blockchain technology to trace personal sales would represent a healthy system between the current dearth of oversight and more heavy-handed tactics.

2. Provenance and Preventing illegal manufacture

[Source: Hacker Noon]

According to a report by the UN, almost 158.8 million people around the globe use marijuana. The trend for the legalization of marijuana is growing, but so is the black market. The illegal marijuana market globally is estimated to be worth $141.8 billion by the end of this year.

The advanced systems of provenance provided by Blockchain technology can benefit the cannabis supply chains, provided all the stakeholders give in. This would help in tracking and tracing the nodes involved in the entire supply chain right from production to retail.

3. Payments for the cannabis industry

[Source: Proactive Investors]

The legal cannabis industry is undeniably on the rise, expanding from one country to another with each passing year. Yet those who work in this industry still face many challenges in terms of banking, particularly when it comes to national banks.

As a remedy, several cannabis-related currencies are trending themselves as a viable option for cannabis entrepreneurs to store their money. Cryptocurrency is one such type of currency and the value of bitcoins is directly tied to the industry’s success.

4. Facilitating cannabis taxation


No matter from where you buy cannabis, you have to pay a hefty amount of tax when you are purchasing the marijuana legally. The amount of tax charged is approximately 15 percent on top of a 10 percent sales tax.

If Blockchain technology is mandated for these dispensaries, the tax and sales figures would become immutable and fixed. By adding SaaS-based Blockchain supply chain solutionsin the cannabis industry taxation would become precise and audits simpler.


Whether it is related to product provenance, illegal trade, sales restrictions, or personal consumption data, Blockchain is the right solution for the cannabis industry. Blockchain tech would provide interoperability between the industries and facilitate the entire supply chain.

Still looking for a suitable Blockchain Supply Chain Developer? Debut Infotech is the right place for you. Know more about our Blockchain-based supply chain solution.

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Debut Infotech A Top-Rated Web, Mobile, & Blockchain App Development Company

Debut Infotech is a global mobile app and digital product development company that leverages Blockchain, IoT, AI, and other cutting-edge technologies to help SMEs, startups, and global enterprises harness the incredible power of modern digital products to drive their online businesses to unwavering new heights. 

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