It is known to the public that a cannabis company, Uruguay Can would soon deploy blockchain technology in its supply chain. The question here is, could blockchain successfully help in making the cannabis industry better, or will it complicate the field even further? Let us find out.
Before we jump into the question, we would beforehand find out the challenges that the cannabis supply chain industry is facing daily. First and foremost, is the illegal market participants. The legalization of cannabis in a few regions does not successfully eliminate the black market. Statistics have shown that many consumers are not switching to legal channels – just yet.
Next is the unclear forecasts. With the legalization of cannabis in many countries, projections for the cannabis market came to a consensus but the exact demands of supply needed remains unclear. Besides, there is a contrasting regulation as seed-to-sale tracking is mandatory; yet each province would have different requirements and a different system of record.
Supply fragmentation, as well as stock-keeping unit diversification, are also two of the many challenges faced by the cannabis supply chain industry. This is due to a clear and timely information sharing across platforms and organizations that are required in the industry, however, halted due to its diverse categories ranging from infused candles and extracts to equipment for growing personal plants.
So, what can blockchain technology offer to diminish the issues?
Blockchain to Reduce Black Market
Governments can trust blockchain data to determine if cannabis is legally grown and who is growing it. Blockchain ensures legal sourcing with speed and flexibility due to real-time tracking.
Blockchain to Forecasts Demand and Supply
By providing a shared record of information within different departments, consumers and producers, blockchain technology could oversee the sourcing, selling and pricing of cannabis and eventually help retailers to identify supply and demand gap.
Blockchain to Improve Stock Keeping and Supply Fragmentation
Through the ledger, the government can monitor, access, share and analyse consistent and up-to-date information regardless of where the product is in its supply chain. It also helps with keeping lab check records and manage cannabis strain names.
Thus, there is no denying that blockchain technology would be able to help elevate the cannabis industry with its decentralized, transparent and immutable nature. Besides, blockchain’s trusted digital ledger can be used to record transactions and information from multiple entities across a complex network, making it possible for it to address the areas of challenges in supply chain.