How Blockchain will Change the Cannabis Industry

10 months ago   •   3 min read

By Juana Know Staff

The cannabis industry continues to grow and mature at a rate that is outpacing regulator’s ability to fully understand the changing nature of the business and define the rules more thoughtfully. Interestingly, the industry is intermittently constrained by both the presence of regulation and its absence! As such, industry participants need to leverage emerging technologies to overcome some of the industry-specific obstacles.

What is Blockchain?

It is basically a large ledger that keeps track of every transaction associated with a block. In the case of Cryptocurrencies, it keeps track of who owns how much of the asset. But there are many other uses far beyond Bitcoin. For example, in the case of a supply chain, it keeps track of what happens to a product as it passes through each touchpoint in the supply chain. One example of such business use is Walmart’s use case of leveraging the technology to ensure food quality.

It is helpful to think about the technology in three parts: the block, the chain, and the network. The block is the container that stores all the transactional data. The chain refers to the fact that the block stores information about both the previous transaction on the ledger and the subsequent one. The network then keeps track of each block instead of just one central point in which records are stored. It is a peer-to-peer network of computers known as nodes. These nodes continuously ensure the security of the system.

There are myriad ways in which this particular technology can transform the industry, but let us focus on the vital few:

Improvements to the consumer experience.

Positive impacts on the supply chain.

Creation and harvesting of data needed to improve the efficacy of medicinal uses.

The Consumer Experience

The primary values to the consumer are two-fold. First is the consumer confidence around the product that they are buying. Just by scanning a code in the retail location, the consumer can be shown a variety of details about the plant's compound and the source. The second is the minimization of cost. For the industry to be profitable and the consumer pays a reasonable price, every process must be as efficient as possible as we will briefly explore in a discussion of the supply chain.

The Supply Chain

Throughout the supply chain, critical attributes and activities can be captured and used to improve every touchpoint starting with cultivation. Many growers already have surprisingly high-tech equipment capable of providing a rich data set about each plant. This includes information on the climate conditions like temperature, humidity, and levels of nutrients during every day of the cultivation process.

Similarly, there are opportunities to understand the product’s journey through the extraction process, transportation, and distribution channels. As in most businesses, every point in the supply chain offers the opportunity for value add or the introduction of a defect of some sort. In either case, the technology can collect the data needed to ensure consistent quality metrics as well as encourage innovation.

Above all, the nature of the technology will promote trust and confidence in the source and quality of the product.

The Creation of Critical Data

As a relatively new industry, the availability of data is a challenge. This is especially true when considering the medical uses of cannabis. The data is getting better but is still in its infancy when compared with national databases associated with cancer research or big pharma.

Blockchain is viewed by many as not only a secure transactional technology, but also a large database. It may evolve into a state in which it replaces big data as we know it.

As doctors become more comfortable with prescribing forms of cannabis to their patients, detail related to the compounds ultimately produced through the cultivation and extraction processes will provide much-needed information that will surely lead to amazing innovations.


The needs for transparency, trust, and high-quality data all continue to grow throughout the industry. Blockchain technology will be a critical piece of the overall solution, if not the cornerstone.

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