The Rise of the US Legal Marijuana Industry and Blockchain Technology

Rage Commentary : Half of the US state governments have gradually legalized marijuana. As marijuana production increases, it poses a risk to product quality. In order to solve this thorny problem, the US company Medicinal Genomics first introduced blockchain and distributed ledger technology into the marijuana industry. In addition, there is Cannabis Hemp Exchange, a marijuana wholesale and retail platform based on the Bitcoin blockchain.

Translation: Annie_Xu

The legalization of marijuana is beneficial to blockchain startups and various cryptocurrencies. Last week's Marijuana Legislation Day in the United States also provided a more relaxed legal environment for the development of these blockchain companies.

Rob Marvin

Rob Marvin at PCmag has a great article on startups in this space.

"Maine, Massachusetts, Nevada and the entire cannabis industry are closely watching California on election night. Following Alaska, Colorado, Oregon and Washington, California has begun to legalize recreational marijuana products. Arkansas, Florida, Montana, and North Dakota have all legalized medical marijuana. Like a domino effect, 28 US states have legalized medical marijuana, including the District of Columbia. The cannabis industry will develop across the board in the US business field."

Technology is filling the gap in the cannabis trade. In particular, many startups are beginning to use blockchain to solve problems in the cannabis industry. For example, blockchain startup Tokken hopes to cooperate with the industry in all aspects to solve supply chain problems.

"Tokken was originally designed to handle high-risk accounts for banks. According to federal regulations, banks cannot enter the marijuana industry because there is a lack of a mechanism to ensure the authenticity of data. Blockchain is not the infrastructure of the entire banking industry. For example, blockchain is not used for value transfer, but we use an immutable ledger as a redundant mechanism. Blockchain can eliminate this risk and prove the authenticity of transaction records in the system to regulators and law enforcement agencies."

Another startup, Cannabis Hemp Exchange (CHEX), is a cannabis wholesale and retail platform based on the Bitcoin blockchain.

“Blockchain has many use cases in the cannabis industry, but the most important is data transparency in a trustless system,” said Eugene Lopin, CEO of CHEX. “CHEX is a wholesale cannabis market software that includes a product catalog; we plan to add a cannabis product trading market in the future. We hope to provide auditable trade data while meeting regional regulatory requirements.”

"Blockchain makes a lot of sense for the cannabis industry. Suppose a customer trades on our exchange, the distributor will automatically pack the goods and ship them. When the pharmacy receives the goods, it needs to verify them. You may use a mobile phone app or biometric technology. But if the trade is based on a blockchain smart contract, it stipulates that the goods can only be opened after inspection. And this asset verification method can be extended from the cannabis industry to global commodity trading."

The PCmag article mentioned that Boston-based Medicinal Genomics used the StrainSEEK service to sequence the DNA of cannabis strains, which were then registered and stored on the Bitcoin blockchain.

PotCoin hopes to facilitate transactions in the cannabis industry, and the company's website also claims that they can replace cash transactions.

"PotCoin is the first digital currency developed specifically for legal cannabis trade and is supported by the community. The PotCoin community is a truly decentralized autonomous organization where community members can decide for themselves how to participate and develop."