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Ensuring Regulatory Compliance in the Cannabis Industry with Blockchain Technology
Effective regulation of cannabis selling and buying practices are a definite possibility through the use of blockchain. The industry can work out solutions and apply them to thwart hurdles.
FREMONT, CA: The technology of blockchain has all the ingredients to drive in changes for the better within the cannabis industry. Places where cannabis has been legalized for medical or recreational use ensure regulation concerning the amount bought in a day. It is crucial to regulate the use of the substance as a part of the population is prone to over-using it. The problems of acquiring cannabis and selling it in the black markets are also a significant concern. To overcome these hurdles, the authorities can incorporate blockchain technology.
The concern about illegality arises from two things, smurfing and looping of cannabis. Smurfing is more associated with the process of buying the legal amount of marijuana from one outlet and then heading over to another outlet for another buy. Whereas, looping is slightly different and has to do with a customer returning again and again to the same place many times a day. Both of these lead to problems as a customer exceeds the daily limit on how much one can buy. Regulating through rules like making bulk buying costlier and cracking down on black market trading of cannabis are one way to manage the problem.
The more efficient and convenient way of ensuring compliance to regulations is by making looping and smurfing impossible. The blockchain technology which has been used for dealing in cryptocurrency in the past is now being developed for a range of other applications. The cannabis industry can take advantage of the technology to streamline the handling, sales, and purchase and keep it legal. Blockchain allows transparent transactions, and through its immutable ledgers ensures that transaction histories cannot be manipulated.
When the dispensaries selling cannabis are linked up and offer insights regarding individual consumer profiles, sellers can easily keep a tab on how much cannabis a person is buying, thereby enabling them to ensure compliance to the legal limits. For effective transaction-related communications, blockchain comes in handy. Curbing the illegal aspects in the cannabis industry is possible with the potential of blockchain technology.