The Growing Use Cases of Cannabis on the Blockchain How cannabis is changing the medical industry through blockchain

Cannabis is growing the U.S. and Canadian economies in the past decade as the push for decriminalization progresses. In fact, as American industries go, its 250,000+ employees surpassed the 52,300 coal miners in 2018. And that number is expected to grow to 330,000 by 2022, and cannabis lobbyist group the Marijuana Policy Project reports nearly every state has some sort of pro-marijuana legislation at some stage of approval moving toward the 2020 election.

TruTrace CEO Robert Galarza took some time out from Consensus and Blockchain Week to discuss how his company’s StrainSecure platform is leveraging blockchain to resolve the most pressing issues facing the modern cannabis industry.

The company currently operates in California and Canada, two of the most advanced cannabis cultures in the world. California contains Humboldt County, home to the Emerald Triangle, which is known worldwide as the Aalsmeer Flower Auction of pot. Canada joins Uruguay as the only two sovereign states in the world where cannabis is recreationally legal

CA and CA: A Tale of Two Velocities

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Legalizing weed isn’t as easy as it sounds, even in Galarza’s home state. California is ahead of the game in many ways, but it’s still struggling with issues regarding its METRC seed-to-sale tracking system. And while legal within the state, it’s still federally illegal, so there are a lot of gray areas cannabis companies have to navigate.

Guns and drugs are a toxic combination even in states with legalized cannabis, leaving businesses unsecure. To make matters worse, federally regulated banks (pretty much all of them) won’t deal with even legal cannabis businesses, sometimes even auxiliary tech businesses like Weedmaps, just for having THC in the name. This leaves them vulnerable and with a lot of cash to lose.

There’s still a stigma in the U.S., so professionals have to get creative to grow sustainable businesses. Many, like Galarza and others, look north to Canada, where laws make it easier to fund any startup, let alone one based in a controversial industry.

A lot of our best cannabis scientists in fields ranging from biology and chemistry to engineering, botany, medicine, and more, operate in Canada. The government is notoriously pro-pot, even letting Dr. Sue Sisley continue her research into treating veterans with PTSD using the plant after the University of Arizona and federal DEA wouldn’t grant her access.

Canada was already advancing medical marijuana research by the time TruTrace entered the market in 2015. In June 2018, the Cannabis Act fully legalized recreational pot, which opened the floodgates to banking, investments, and other financial tools strangling businesses in the U.S.

While both Canada and California excel in many ways, they both ultimately drop the ball for consumers, who are left paying high prices for medicine of questionable quality and origin.

Relieving Headaches with Blockchain

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The success of legalized cannabis caused a “green rush,” as everyone from existing enterprises to emerging entrepreneurs rushed to pour money in. Like blockchain, this created a lot of companies that failed to live up to expectations. It also caused a lot of companies to grow at an accelerated pace – there are about 50 high-performing companies (intentional pun) listed on Canada’s TSX Venture Exchange. TruTrace Technologies (TSX: TTT) is one of them.

But even the best companies with the best regulations are finding quality control problems. Up to 80 percent of the cannabis sold in California comes from the black market, and this creates a problem for medical patients who need dependable medication with predictable effects.

The problems are both financial and technological – growth-stage startups simply have higher hurdles to clear. Performing perfectly while under so much scrutiny looks easy when a too-big-to-fail bank does it, but it’s harder for a business that can barely expand beyond a county, much less a state, without overcoming mountains of red tape.

StrainSecure focuses on data integrity and efficiency, much like Factom’s smart-contract protocol. The team believes in the power of blockchain to go beyond seed-to-sale to trace from genome-to-user. Like most modern blockchain 3.0 projects, interoperability and cross-compatibility is the aim.

Being able to trace the full supply chain of cannabis means both retailers and end-users can be assured that the product they’re buying is exactly what it says it is. If molds, pesticides, and other carcinogens and toxin are found, they can be pinpointed and recalled effectively. StrainSecure is one of the blockchain solutions helping cannabis-centric platforms like MJ Freeway, BioTrack, and AltThirtySix communicate with legacy platforms from SAP, Oracle, and others. 

Failures (and Opportunities) of the Modern Cannabis Industry

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Cannabis is legal in many states (whether medical or recreational), but it’s still federally illegal in the United States. Growing pains and expenses involved caused a lot of misinformation in the industry. The general public doesn’t understand the difference between smoking weed and using a cannabis inhaler. One is not healthy because you’re burning and combusting plant material and inhaling toxic smoke.

And budtenders at medical marijuana dispensaries are well-trained, but they’re still ultimately salespeople. Friends and I regularly bring microscopes and deeply examine products before making a purchase. It’s insane how many toxins can slip through the lax quality control mechanisms in place. If you’re a PTSD patient looking for an indica and end up with a sativa-dominant hybrid, you’ll increase symptoms like anxiety.

This is why it’s important to have the full cannabis genome documented on a digital ledger and researched academically. Even if everyone really was growing a popular strain like GSC or Jack Herer, it will be a different cannabinoid profile if grown in Phoenix, AZ versus Denver, CO because of massively different climates. This is something we know with coffee – region matters.

Until cannabis patients know exactly what they’re getting, the medical aspect of cannabinoids is missed. And this isn’t a problem exclusive to cannabis. It affects all pharmaceuticals and the healthcare industry in general. My medical records are all but lost, our insurance marketplace is a complete disaster, and we have wearables and devices constantly tracking our habits, but no doctor can make medical recommendations based on them.

I personally believe blockchain is the answer for many of these issues, and I’ve always been a firm believer in cannabis. As we move through 2020, cannabis, blockchain, and cryptocurrency are going to play an increasingly important role in medicine, healthcare, and society in general. I’m excited to see how the seeds I planted in these industries grow.

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Dr. Brian Penny is a former Business Analyst and Operations Manager at Bank of America turned whistleblower, troll, and freelance writer. You can find his work in Cracked, High Times, HuffPost, Lifewire, Forbes, Fast Company, and dozens of other places, although much of it is no longer under his name. Dr. Penny loves annoying fake media.

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