How blockchain technologies are changing the cannabis industry

The blockchain and cannabis industries are two of the newest and biggest markets to emerge in our lives. Both blockchain technology and the cannabis industry have hit new highs in recent years, but both face difficulties in 2023. The blockchain industry remains largely unregulated and is currently recovering from several high profile scandals. Still, the value and underlying utility of blockchain tools should not be underestimated. Its true potential as an immutable database has remained largely untapped, especially when it comes to data logging and security tools.

The cannabis industry has experienced its own troubles as a lack of progress at the federal level has hampered industry funding and left public companies in trouble. The lack of significant banking options, difficulty processing payments, tax and financial burdens, and lack of regulatory clarity have forced cannabis companies to do their best to simply survive.

But what if these two industries could help each other – could the use of blockchain technology and tools in the cannabis industry help both areas reach their full potential?

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Despite the difficulties mentioned above, the legal cannabis industry is expected to exceed $100 billion by 2030, while the blockchain technology market may surpass $130 billion over the same period.

Cannabis is not legal at the federal level, so states that have legalized cannabis are solely responsible for ensuring quality control and transparency. Additionally, a lack of oversight of these fragmented markets often raises security concerns, particularly as cannabis companies typically operate on a cash basis, leaving them vulnerable to robberies and other scams. Bad actors in the industry can also divert cannabis products from legitimate programs to the illicit market, avoiding otherwise high taxes.

The use of blockchain in the cannabis industry has the potential to solve a number of these problems. Blockchains are immutable ledgers that enable tracking across supply chains, help ensure proper quality controls and prevent legally produced cannabis from entering unregulated markets through detailed storage records. Blockchain technology may even help alleviate some problems related to payment processing, as using cryptocurrencies allows for fewer cash transactions (which can help deter theft).

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Cannabis markets can benefit greatly from blockchain data logging, as well as blockchain-based monetary and security tools. Blockchain technology’s long-term success will likely depend on its integration with other industries, which would enable significant utility achievements in almost all markets.

Cannabis companies are already integrating blockchain technology and tools to verify the authenticity of plants and lab results. Some companies are also using blockchain-based cryptocurrencies specifically for the cannabis industry, which enable cashless transactions. Continued use of blockchain technology in the cannabis industry could help both industries take the next step towards realizing their respective potential.

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These emerging industries are still in their infancy and collaboration between them could prove extremely fruitful in the long run. With both industries constantly evolving, navigating the right rules can be quite difficult. To fully understand the legal obligations involved in incorporating blockchain technology into the operation of a cannabis business, operators should seek appropriate blockchain and cannabis-related attorneys.