Almost ten years ago, bitcoin fueled the dark web, where illegal drugs and illicit goods were sold on the Silk Road black market. Today, blockchain technology could bring much needed transparency, legitimacy, and security to the legal cannabis industry. Here’s how:
Seed to sale
Blockchain has the potential to be the ideal mechanism in which regulatory bodies can capture the history of cannabis through the entire supply chain, ultimately ensuring consumer safety and product quality control. By using the immutable ledger than blockchain offers, consumers and operators will have vital information about the product they are dealing with – from seeds, water quality, and fertilizer used, to patient ID’s and doctor certificates. This means less separation between producers, growers, labs, dispensaries, and consumers.
The cash intensive nature of the cannabis industry makes it ripe for criminal activity. Paying an electrician, for instance, with money obtained from the sale of cannabis is technically considered money laundering. The blockchain, which makes up an online ledger where transactions are recorded and processed, has become a huge point of fixation as a potential solution to the industry’s banking woes. Outside of payments processing, blockchain may help business owners gain access to previously inaccessible loans, credit history, and investment.
In simple terms, an ICO (Initial Coin Offering) is a means of crowdfunding via the use of cryptocurrency. While ICO’s are still young, unregulated, and on occasion plagued by scams, they have already activated communities of interest and emerged as a powerful channel for fundraising, market testing, and customer engagement. You can bet that cannabis entrepreneurs are taking a long, hard look at the ICO route.
Blockchain is inherently about distributing trust – a tenet that we take very seriously here at Blinc. So, stay tuned and to be continued…