Blockchain and cryptocurrency adoption is growing at incredible speeds, and now it may be associated with growing something else.
Computing giant IBM sent a proposal to British Columbia regarding the use of blockchain to regulate the growth and distribution of marijuana as the province completes its framework to legalize the drug. Canada has announced plans to legalize weed by July 1, 2018, and multiple provinces have either revealed unique regulations or, at the very least, announced they have begun to work on them.
IBM submitted a four-page proposal to B.C.’s provincial government that offers up blockchain technology as a way to best prepare for what analysts estimate will become a billion-dollar market.
“IBM suggests Blockchain is an ideal mechanism in which BC can transparently capture the history of cannabis through the entire supply chain, ultimately ensuring consumer safety while exerting regulatory control–from seed to sale,” reads the proposal.
The reasoning behind blockchain integration into the marijuana market is the same for why blockchain gets involved in food or pharmaceutical distribution, says IBM. The core of the supply chains are very similar, starting with the health and safety of consumers and trickling down into preventing fraud and creating a foundation of transparency in which the government can base regulations in.
Blockchain is based on the idea of having one identifiable ledger for every single transaction. IBM argues that by having one distributed ledger, governments can gain greater visibility and optimization, perhaps through open-sourced comments from the public, who will also have viewing access to that ledger.
Consumer assurance, on the other hand, is greatly improved through the traceability and distribution of products through the chain. If a bad product enters, it will easily be picked up and identified, then the method as to how that product came into existence will be investigated and fixed.
In short, blockchain helps the B.C. government maintain pricing, selling and sourcing of marijuana. Growers can use the technology to control inventory and project analytics. Government-controlled retailers—like those Ontario is planning—can use blockchain to gather insights and create better selling strategies.
Companies have tried to combine the blockchain and legal marijuana industries before. Paragon, based in California, announced a partnership with a blockchain company to create a verifiable and transparent cannabis database.
IBM’s proposal is merely that—a proposal. There is no indication that it will be accepted, or even that the B.C. government is looking for this kind of solution. Blockchain is an emerging technology and IBM simply wanted to send something in that may catch the government’s eye.