Cannabis remains a controversial spot on the global map. On the one hand, this business makes noticeable strides; in the US, nine states legally embraced recreational and medical marijuana, and 17 states currently allow only medical plants (as reported by BusinessInsider).

By contrast, cannabis producers and businesses struggle with a lack of government support and financing, illegal activities and law violations, dispersed data assets, and other challenges that continue prevailing in the space. Those continue to persist even in the regions where legalization is already part of the issue.

Why is this happening? In the article, we will go to the heart of this matter.

Cannabis and Blockchain: a Shade of Hope, the Light of Changes

As blockchain becomes a top technology of the near future, cannabis businesses go for it with great ambition. Here’s just a quick look at the reasons why today’s business sector looks in the blockchain’s direction.

  • Serving as a universal and encrypted database, blockchain provides data integrity and security;
  • Payments become fast, immediately visible, and protected from unprecedented interception;
  • Smart contracts enable and independently maintain regulatory compliance and asset quality;
  • Cannabis supply chains are no longer under-regulated; every flaw or discrepancy is now visible;
  • Blockchain is an efficient tool for monitoring the origins of supplies and backtracing.

The list is far from complete, and further, you will see it. Also, while technology researchers around the world are eyeing new opportunities and discovering new ways of how blockchain can help cannabis, we’ll focus on what’s going on right now.

Below are the companies worth your attention; they are already pushing the limits of the industry and making things that previously seemed impossible.

Alt Thirty Six Establishes Blockchain-powered Cannabis Payments

The suspicious stance of banks towards cannabis companies forces the latter ones to conduct financial operations practically clandestinely. MarijuanaBreak found that in the US alone, 3% of financial institutions are ready to provide backup for the cannabis sector.

No doubt, the notorious reputation of the industry for smuggling and other illegal activities plays its part. Even if banks and authorities change their mind and get over distrust (after all, the US legalized cannabis, what it takes to reach another milestone?), cannabis companies still face another problem – immense taxation. The legalization deal has its trade-off.

The Alt Thirty Six startup offers cannabis businesses to shift from cash-based payments to less costly and thus more efficient digital ones. The company created a single platform for dispensaries, vendors, suppliers, and their customers, where all the parties can seamlessly connect to the Dash blockchain network and perform dealerships. Low taxation, no bank regulations – that’s how the company positions its platform.

How does it work in a nutshell? It’s not about cannabis purchasing only but selling as well. By registering on the network and linking a bank account, you can then begin making purchases right off the bat. Once paid, the funds are immediately available in a merchant’s account and can be used to pay bills, make transfers, and other operations, fast and secure.

Growers International to Make Cannabis Supply Chains Transparent

Cannabis remains a mostly unregulated area; MarketInsider reports the staggering 90% of all sales performed illegally. With fraud set in motion in this space, again, who could be surprised about predominant suspicion and unwillingness to deal with cannabis enterprises? Moreover, even legal participants have to struggle with data opacity and fraud in supply chains.

How can businesses overcome this “lack-of-trust” challenge? The answer is – Growers International. A self-titled company works on a B2B cannabis plant marketplace that will bring together vendors and suppliers. The parties will be able to make deals backed by smart contracts, and vendors will be free to track the entire production process from seed to sale.

The idea behind the project is undoubtedly ambitious, yet it has a long way to the release. Now it passes through the testing stage with an alpha release. Developers also plan to introduce a so-called “Strain Chain” depository for cannabis genomics data, smart contracts for growers, a membership program, and even more. Find details in the official whitepaper.

Budbo v.2.0: Cannabis Industry as a Decentralized Autonomous Organization

Today’s cannabis industry suffers from data fragmentation and inadequate record-keeping of supply chains. All the main actors of the process are siloed medical institutions, government organizations, labs, growers, dispensaries, patients, and others. Versatile markets are dispersed, and businesses are forced to conduct operations under these inefficient conditions.

As soon as smart contracts came into play, tech specialists quickly realized that their potential goes beyond individual use cases and operations. Instead, they can empower businesses to build entire autonomous organizations.

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“Why not unite cannabis participants within such organization?” the question the Budbo startup, perhaps, asked itself. Namely, the whole industry built on top of blockchain where parties can perform transactions with smart contract-backed proof-of-pickup and proof-of-delivery. Patients’ sensitive data is encrypted and safely stored in a hack-proof ledger.

Additionally, scientists can share research insights with the network as products move from growers to labs and finally – to patients. The data is distributed among research facilities across the globe, regulatory compliant.

This way, the network community works for the sake of increasing industry awareness through knowledge sharing.  Yet, this what the company promises to deliver since the project is in development.

Paragon for Product Authenticity

The Paragon startup goes further in the matters of cannabis transparency and data uniformity and establishes a self-titled ecosystem. Paragon is a platform where growers, distributors, researchers, and producers can buy and sell agricultural products and pharmaceuticals.

In essence, this is both a B2B marketplace and a database with verified, reliable supply chain data built on the backbone of blockchain technology. Cultivation, distribution, manufacturing, testing, and retail – Paragon covers every stage of the supply chain process with meaningful and comprehensive insights.

Customers will be able to see the entire path of each supply from the moment of cultivation. Developers say that each stage will have own modules and functionalities making customer experiences a no-brainer. So far, the project is in development, with the last, testing module to be reportedly released by the end of this month.

Smoke Network: a Social Platform for Cannabis Ratings

Smoke Network is another project that combats the effects of illegal cannabis practices, this time, by introducing a social platform for cannabis customers.

Cannabis and a social network; how those two can work together? The answer is – a private decentralized application empowering users to share cannabis-related information without censorship, leading to unprecedented data removals. More, Smoke Network incentivizes data sharing by rewarding users with own tokens for such activities. They can then exchange tokens for other assets such as Bitcoin or Ethereum.

Recently, the company has released a mainnet, and the launch of a native mobile app is expected later this year.

IBM to Cut Cannabis-related Taxes

Lastly, we will bring to light one big player – IBM, whose initiatives in blockchain space are much sought after today. In fact, IBM was one of the originators of the idea that businesses can track cannabis supplies with blockchain. Only after many of the bright and aspiring startups (including this article’s heroes) came out with their proposals of blockchain for cannabis. Nevertheless, IBM was at the forefront of that movement from the very beginning.

In 2017, IBM introduced a proposal of pot tracking from farm to shelf with blockchain’s encryption and transparency. The results? Reduced taxation, evident black-market practices along with automated processes not requiring a person’s involvement (since human error might be part of the deal), integral data, and many of those benefits highlighted earlier.

IBM’s influence over the entire logistics sector is the matter we can’t overlook. Though cannabis might be just an individual aspect (at least in the logistics context), it is the significant one, so businesses dealing with cannabis supplies should stay in the loop of IBM’s solutions for it.


Be not confused by the number of the earlier examples; of course, there’s more. Yet, many of those not mentioned here bring the same solutions, and we’re looking at individual cases. Imagine the possible scale of all cannabis-related companies working with blockchain.

As blockchain’s adorers and proponents, we’re excited about new blockchain-powered transformations of the cannabis landscape. The current state is not an ending point; rather, we’re standing on the verge of innovations. “To be continued…”.

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