Blockchain may just be the future of doing business, and its greatest impact may well be on Canada’s burgeoning cannabis industry
Although blockchain has been around for a decade, it has really only gained mainstream momentum in the last years. Despite an almost ridiculously concrete-sounding name, it has remained something of an elusive, intangible concept for many, especially those who majored in English, political science or anything that requires computers purely for their word-processing powers.
Some people confuse blockchain with Bitcoin (it’s not Bitcoin, although Bitcoin wouldn’t exist without it), or are simply confused by the concept of cryptocurrency in general. And yet, blockchain may just be the future of doing business—and its greatest impact may well be on Canada’s burgeoning cannabis industry.
Just as in 1995 we never dreamed our local libraries would have websites listing every single book on their shelves, or that we’d connect with one another more on social media than we do in person, the same is true about blockchain, says Joaquim Miro, partner and CMO at MLG Blockchain Consulting, a global blockchain development and consulting firm based in Toronto. “We’re at the beginning of the Web3 revolution,” Miro says. “In the same way that you’re now at a disadvantage if your business doesn’t have a well-indexed website, you can expect a similar trend as blockchain technology permeates into every level of every industry.”
What, exactly, is Blockchain?
Blockchain had something of a nebulous beginning. Back in 2008, Satoshi Nakamoto (a pseudonym—no one ever discovered his/her/their true identity) developed Bitcoin. While Bitcoin is a cryptocurrency, or electronic cash, Blockchain is the technology that runs it. It’s often described as a record-keeping system or an electronic ledger where transactions are recorded.
“Blockchain is essentially a decentralized way of storing information using blocks of verified data that build on each other in a linear way, like links in a chain,” Miro says. “Blockchain is to Bitcoin, as the Internet is to… (insert name of the website here).”
The technology offers a bunch of business-related benefits. For one thing, there are no middlemen (aka banks), so it puts an end to high transaction fees, while transactions themselves can be processed within fractions of a second. It also creates something of an electronic safety net when it comes to information sharing of any kind.
“Blockchain offers greater transparency as transaction histories can be recorded on a distributed ledger,” Miro says. “This distributed network makes it very difficult for fraud or unauthorized activity, and it’s harder for hackers to compromise data as the information isn’t stored on a single server.”
Like any new technology, it takes time for everyone to get comfortable with it, adds Loudon Owen, chair and CEO of DLT Labs, a global leader in the development and integration of business solutions using distributed ledger technology. “But now it’s transitioning from early adopters to the mainstream market,” he says.
“And cryptocurrency is just one tiny application of the technology. For example, if you have 45 different databases, how do you get them to talk to each other? Just add blockchain like a layer on top and all that information is shared in real time. Best of all, it’s secure—and it can work anywhere.”
Why does blockchain + cannabis work so well?
Miro says blockchain is especially well-suited to the cannabis industry. First, there’s the area of supply-chain management—the technology allows you to track the movement of every plant or cannabis product on the market. “This could allow for a national, and even international, approach to cannabis distribution,” he says. “It would ensure that the entire product lifecycle, including growth, processing, and B2C distribution, is trackable and done within the confines of the law.” Miro says the tech may also soon come in handy for verifying IDs. “It won’t be long before you can prove your identity using a blockchain decentralized app (also known as dapp), which will allow the system to ensure you’re old enough to buy and consume.”
Some Canadian companies are already investing in the technology. In February, Emerald Health Therapeutics, a licensed producer of medical cannabis, announced a joint venture with DMG Blockchain Solutions that will be called CannaChain Technologies—its goal is to provide a blockchain-based supply chain and e-commerce marketplace for the cannabis industry.
But, even more interesting, Miro says, is that Blockchain technology can be adopted and layered onto existing Internet protocols, meaning a solution could be launched in conjunction with Health Canada. “Blockchain can not only help the Canadian government ensure that cannabis crops are legally grown, it can also ensure that consumers would know the exact origin of any products they purchased, as well as their potency and health effects.”
Is Blockchain just an e-fad, or is it the e-future for the cannabis industry?
The amount of data at our disposal today is a huge opportunity—and a huge challenge, Owen says. “So much of the information that’s out there is out of control,” he says. “But blockchain allows us to deliberately shape the flow of that information. This is especially important when it comes to areas that affect our health and safety, and cannabis is one of those areas.”
Blockchain is accurate, traceable, authentic and consistent, Miro adds, all of which are incredibly key when it comes to navigating the sale of cannabis to Canadian consumers. Miro believes blockchain will become an integral part of the solution to issues of regulation, sales and distribution of cannabis in this country. “Under the Cannabis Act (Bill C-45), Health Canada will be developing a national tracking system to ensure the market abides by the laws in place,” he says. “The best tracking systems are all blockchain-based, so it’s only a matter of time before the solutions adopt the technology.”