Tags and Smartcards – the touch points that will power Parsl

As the Parsl platform gets closer to launch, other parts of the Parsl eco-system are also starting to fall into place. Today, we are able to release the designs of the tags that will track and verify the products within a Parsl system and the smartcards that will verify users, provide them a digital identity within the eco-system which gives them access to the actions and functionality they require.

Tags

Information within the Parsl system is tracked, stored and verified via smart-tags. These tags not only allow Parsl to track individual products, but they allow us to securely record the lifetime data points on individual products, from creation to consumption, and beyond.

In a cannabis ecosystem, tags will be assigned to everything from germination trays to testing samples to individual packaging. They will collect and store information on every interaction that occurs giving a full, verified product history with a simple scan.

Depending on the system requirements, the tags will function using NFC, QR codes, unique identifiers or a combination of the three. Above, are designs for all combinations of these methods

Smartcards

The Parsl smartcards will be the key for users to access the Parsl system.

Each user will be able to be verified at multiple different levels on their Parsl card. A grower will be able to be verified as a consumer on the same card. The smartcards will therefore be able to provide anybody and everybody with a digital identity within the Parsl eco-system. 

Additionally, a Parsl smartcard will verify the actions a user can perform within the system and, for consumers, what products they are authorized to purchase. This will even apply to Parsl systems in different jurisdictions, so once a consumer is appropriately KYCed via their Parsl smartcard they won’t have to do it again. Additionally, all the actions authorised by their smartcard are linked to their KYC’s identity which secures the eco-system for all participants. Lastly, the use of the Parsl smartcard ensures that no one is left out of the system, even if they don’t have a smartphone, an address or a bank account.

At Parsl, we have a strong belief that cannabis (particularly medicinal cannabis) should be made accessible to everyone who needs, and all too often that might be someone who has returned from fighting in a war and is suffering from PTSD. Tragically, these people often end up homeless and bereft of an identity in society, excluding them from everyday benefits that the rest of us take for granted. At Parsl, we make sure that these people have full access to the cannabis ecosystem, just as they are entitled to be!

Going green with your green: the future of the legal cannabis recycling issue

When it comes to cannabis packaging, your green may not be as ‘green’ as you originally thought.

Due to heavy government regulations, there are many rules that go into how your cannabis is packaged to comply with advertising restrictions, access to minors and other industry restrictions and that is leading to a lot of packaging that isn’t being recycled.

This means that there is a lot of single use plastic produced. This is obviously not a unique problem in the modern world but as we’ll detail below recycling in the cannabis industry has its own unique barriers. But fear not for the environment, there are many innovative solutions to these negative environmental impacts.

The challenge with recycling in the cannabis industry

cannabis packaging waste
This amount of packaging was used for the sale of four grams of cannabis. Source: https://www.cbc.ca Greg Maclean

As the image above demonstrates a small amount of cannabis can come with a huge amount of packaging. According to an industry executive in the first year of legalization in Canada cannabis products produced 10,000 tons of waste and the vast majority of it goes into landfill. Colorado’s Sana Packaging estimates that the industry will produce 1 billion units of plastic packaging waste by 2020.

But how have we got to this situation? Let us break it down into stages:

Why does cannabis need so much packaging?

Regulations mean that there are specific standards companies have to meet when it comes to creating packaging for their product. These will vary from state to state but can cover everything from the the way the package is opened (it must be child resistant), the design of the packaging, the material it is made from, the scent or sounds the packaging makes, the typeface used and much more.

Here is a more extensive list on cannabis packaging restrictions that companies have to abide by in Canada’s legal market.

It is because of these requirements that producers of cannabis products create so much packaging waste.

Because of these very specific requirements, there are many different materials used in the packaging, making it very difficult to recycle because manual separation is needed for the recycling process. A consumer from New Brunswick, Canada bought 1 gram of cannabis and received 70 grams of cannabis packaging with it. It is a long way from the single zip-lock bag that most cannabis users were used to in the days of prohibition.

Why isn’t cannabis packaging recycled?

Cannabis packaging needs to be treated separately before it can be sent to a more generalized recycling plant. The lack of immediate access to such a service means that the vast majority of cannabis packaging goes unrecycled.

So, the problem isn’t that cannabis packaging can’t be recycled, it is that it isn’t. The barrier of needing to find a specialized service to manage the disposal of the packaging in a sustainable way means that most users chuck their recycling in with general waste and it ends up in landfill.

VICE Canada wrote that conservative estimations suggest hundreds of millions units are sold and discarded each year in the American cannabis industry. That is a lot of waste produced without clear methods of recycling such waste leaving landfills to continue getting filled up with large amounts of used cannabis packaging. 

You’re probably feeling a little helpless with yet another environmental issue to stress over. Many champions of cannabis praise it for being a natural medicine but it is having a huge negative impact on the environment! Well, all is not lost, there are some great solutions, innovative solutions in the works to make the world of cannabis packaging a greener space! 

Solution 1: Recycling Programs

Humans are simple creatures, more times than not, they will do something if there is a juicy reward waiting for them. This is why a reward system works perfectly. With initiatives to centralise the collection of cannabis packaging both in registered (licensed) dispensaries and collection machines, there is big promise for the future of the cannabis recycling problem. The consumers who participate in this will be rewarded with reward points that can be redeemed for products within the industry from participating businesses. 

This not only helps make the recycling process easier for consumers, it also benefits the dispensaries through driving customers back into their stores for potential repeat purchases. 

Solution 2: Utilising Marijuana Waste Disposal Services 

There are now companies that specialise in marijuana waste disposal like EcoWaste Services Inc or Cannabis Waste Recycling who are located in California, this offers an affordable, effective and fast solution to the disposal of cannabis waste. These companies even offer personalised waste management plans for businesses as well as environmental and industrial hygiene consulting services. This ensures that all waste disposal regulations are met and the environment is protected through proper disposal; a win-win for both business and the environment. 

Solution 3: Sustainable Design 

It is so important to incorporate eco-friendly design into the packaging of cannabis products. Companies need to steer away from traditional plastics and utilise materials like ceramic, glass or plant based plastics. We can look to our own industry for such alternatives, behold the magical versatility of hemp. As you may know, hemp can be made into plastic. This is groundbreaking and the perfect chance to support our own by being early adopters of such a sustainable material for use in the packaging of cannabis products.

Solution 4: Educating and Incentivising Customers 

This is an effective solution that will drive business behaviour to mirror the demands their customers have of them. Educating customers on the importance of properly recycling their cannabis packaging will lead to an increase in the numbers of properly recycled materials. With numbers comes economies of scale which reduce recycling costs and also push for political change, so the more people that know and understand, the higher chance there is for better policies to be in place when it comes to recycling used cannabis packaging. This is something Parsl will achieve by incorporating a reward system in our cannabis tracking system you can read more about how that will work in our blog post on innovation and environmentalism.

Although there are difficulties involved in recycling cannabis packaging, there are many potential solutions that exist now, and promise for even more solutions to arise within the future to solve the issue! 

What solution do you think has the most promise? Feel free to share your opinion below in the comments! 

Banking and the legal cannabis industry – a problem that needs to be solved

26 September 2019 Update: The SAFE Banking Act was passed in Congress meaning that federal law can no longer apply to cannabis related business banking as long as they are in complete compliance with state law. You can read more on this in our recent blog post explaining the SAFE Banking Act in detail.

The biggest problem legal cannabis businesses face has nothing to do with the plant they sell. It’s what they do with the money they make from selling it.

However, based on today’s Senate hearing into banking in the cannabis industry, it looks like the federal government could be catching up with what cannabis businesses and banks have been waiting for a long time.

For those that don’t know what has been happening in the world of cannabis and banking, here’s the deal: for all the gains that have been made legalising cannabis at a state level in America, under federal law, cannabis remains illegal and is classified as a Schedule 1 drug. All banks and credit unions are insured by the FDIC (Federal Deposit Insurance Corporation) which makes financial institutions reluctant to deal with what the banks refer to as a MRB (Marijuana Related Business) at the risk of losing their insurance.

Currently, out of the 11,000 banks and credit unions in America, less than 500 will serve MRBs. This is despite a survey finding that 82% of banks want the Federal Government to allow them to serve MRBs

Click to tweet the above stat.

The American Bankers Association website states plainly that the “ABA believes the time has come for Congress and the regulatory agencies to provide greater legal clarity to banks operating in states where marijuana has been legalized”.

Cannabis businesses are ready. The banks are ready. And now it looks like federal regulators are just about ready too. Hopefully that means that MRB banking and compliance is something that is going to be addressed very soon.

With that in mind, we thought it was a good time to have a look at the massive challenges that banking presents in the cannabis industry and what needs to happen for them to be overcome.

So, What’s The Problem?

The bottom line? MRBs aren’t able to reach their full potential because they are left dealing with the many complications that arise from their limited access to banks and other financial institutions.

Impact on cannabis companies: 

It is estimated that two-thirds of MRBs are unbanked.

This means that:

  • All cannabis related businesses are forced to deal in cash and can’t accept credit or debit cards, cheques, or prepaid cards. 
  • It is harder for a cannabis related business to pay suppliers and employees
  • MRBs are required to pay their state and local taxes in cash by the use of armoured trucks.
  • More cash on the premises results in higher crime rates 

It isn’t difficult to understand why businesses with more cash on hand would be more likely to be targeted by criminals. The financial regulations ensure that MRBs are earmarked to be more likely than most other industries to have a lot of cash on hand. Ryan Donovan, chief advocacy officer of the Credit Union National Association has claimed that one in every two businesses had been robbed, stating that “We wouldn’t tolerate that in any other industry, and we shouldn’t tolerate it here.” 

Co owner of dispensary delivering tax as cash in a paper bag in Washington State. Source David Ryder for the New York Times

On top of this, forcing cannabis related businesses to favour a cash-based operation works against exactly what regulatory bodies want to achieve with their track-and-trace system. A National Association of State Treasurers resolution stated, “[c]ash-based systems are inefficient, expensive and opaque, making illicit activity more difficult to track”.

The processes a legal MRB is left to adhere by when it comes to handling their finances are outdated, which is fundamentally obstructing the development of the industry.

Parsl’s solution to MRB compliance and banking 

Parsl’s platform delivers value to all stages of cannabis supply-chain but no application is more critical than the solution it provides for a cannabis business’ financial compliance.

Parsl eliminates many of the difficulties facing MRBs through our stablecoin, PODs. Initially, the main function of PODs is to assist MRBs with securing an account with financial institutions through automating financial compliance. This is done by providing a full lifecycle of financial activity (which is intricately tied to verified product lifecycles). This will ultimately encourage banks to work with more MRBs, as the MRBs will be operating in a more compliant way. Simultaneously, this will lower the costs associated with a financial institution’s own compliance reporting significantly. 

When a business does secure a bank account, PODs can be used for everyday business transactions allowing the industry to operate cashlessly. This means they can enjoy the relief from the theft that is currently occurring due to large amounts of cash being kept on site. POD tokens are only created when real funds enter the ecosystem and are converted by Parsl, meaning it is 100% totally liquid. 

This process can remove the need for a payment gateway entirely, which will significantly reduce the costs a MRB faces for banking and financial services which can be 10% per transaction just for the payment gateway, or even higher. Utilising PODs entirely will mean that transactional costs are significantly reduced. This will ease a lot of the current financial burden being experienced and allow the industry to grow more rapidly and safely. 

Financial institutions and service providers and cannabis-related businesses can together enjoy the benefits that come from using PODs.

Benefits for financial institutions dealing with MRBs 

  • Provides security through complete lifecycle tracking of cannabis products allowing banks to verify and demonstrate they fully comply with FinCEN guidelines.
  • Simplifies compliance reporting significantly
  • Reduces the risk for a bank or financial service provider to provide services to a MRB 
  • Economically incentivises people to operate legally and transparently within the cannabis industry which will then allow banks to capitalize on a multi-million dollar market segment that would otherwise be kept on the black market 

Benefits for cannabis-related businesses 

  • Allows businesses to operate safely through creating a cashless industry (particularly by reducing internal theft and the risk of robbery)
  • Simplifies business payments in the cannabis industry (salaries, vendor payments etc)
  • Provides fully automated compliance and protection from any seizure of funds
  • Instant transactions 
  • Borderless transactions 
  • Automates tax calculations/payments
  • No transaction fees for users 
  • Minimum transaction fees for cannabis businesses (far cheaper than using any other payment processing system) 

Not only does PODs make it possible for cannabis-related businesses to gain access to financial institutions, it makes the process faster and cheaper.  It also opens up international markets and trade through significantly reducing international trade conversion rates and standardising compliance. 

The relationship between banking and cannabis needs to change. The ability to access financial institutions is one of the fundamental necessities of running a successful and safe business in the modern day but transparency and accountability is also vital for a cannabis industry that is resistant to black market influences. Parsl is the system to provide solutions on both fronts to satisfy both sides of the equation. 

Dr Isaac Balbin talks to Craig Hessler of Green Peaks Analytical in Rhode Island

Earlier today Dr. Isaac Balbin talked with Craig Hessler, Technical Director of Green Peaks Analytical, a lab for testing medicinal cannabis in Rhode Island.

They talk about everything cannabis-testing related in the Rhode Island industry, including the current track and trace technology the state uses.

Enjoy the video and check the links below for the information mentioned by Craig in the video.

Links referenced in the video:

Rhode Island wants to put cannabis on the blockchain

Exciting things are happening with cannabis, blockchain and Rhode Island.

The Parsl team have been working hard the past few weeks putting together a proposal for Rhode Island’s cannabis tracking platform and on Friday it was submitted.

Rhode Island isn’t the first US State to put out a tender for a cannabis tracking system but what makes this so exciting is that Rhode Island’s request for proposal specifically stated they wanted a blockchain backed tracking system. In fact Rhode Island in general is looking to adopt blockchain for government use.

We think this is awesome news. Parsl is passionate about the transformative power blockchain will be bringing to all sorts of industries over the next decade and for a government body to be putting their weight behind the technology in a big way is very forward thinking.

On top of that, the tracking system that Rhode Island wants for their cannabis industry is exactly what Parsl can deliver.

Here are just a few snippets of key requirements from the state’s official proposal request and how Parsl is custom built to address them:

“To inform the state with respect to the ease and simplicity by which consumers can interact with the Blockchain solution to both record their licensing or other information and to later verify license or registration status;

One of the key features of Parsl’s technology is that the core functionality works using technology that is already widely available, including in most modern smartphones.

To participate in a Parsl system consumers simply need to:

  1. Get KYC’d using Parsl’s online registration system or at a Parsl designated retail location
  2. Carry a smartcard
  3. Pay for any cannabis products using their smart card

Parsl technology can then automate the verification and approval of any transaction made and record it to the blockchain. For the consumer nothing consequential changes except their method of payment but all relevant information from a business compliance and regulatory point-of-view is verified and stored on the blockchain.

“To identify potential cost-savings of a blockchain-based solution over traditional/legacy platforms or processes;

One of the most significant costs for legitimate cannabis businesses is maintaining adequate product tracking and compliance. The time and money involved in maintaining records drives prices up and makes it hard for them to compete with parallel black market influences.

This was one of the early issues that Parsl identified as needing a solution when the project was first conceived.

Parsl allows regulators the opportunity to save enormous amounts of money through hosting and compressing data on-chain. However, more crucially, it helps to make the entire process of cannabis tracking and compliance more light-weight and automated.

Instead of having to employ staff members specifically for data entry to satisfy state-mandated compliance records (which often aren’t accurate anyway), Parsl is able to verify the identities of actors within the chain, check their level of access to certain products and record the secure handover of products meaning much of the process happens via the act of transferring the products.

“To inform strategic technology planning vis-a-vis the potential impact of blockchain technologies on core government duties, supporting infrastructure, and budget cycle variability;

The Parsl platform is designed to support core government duties in several areas including licensing, consumer verification, collection of tax, assistance to law enforcement and even the gathering of sentiment about cannabis laws specific to the jurisdiction a consumer is from.

The reason Parsl’s capabilities are so broad is that it has been designed not just as a way of tracking the sale of cannabis products but as a complete cannabis eco-system where all the relevant information on verified participants in the cannabis industry can be stored on the blockchain and accessed by people who have adequate permission levels.

“To identify opportunities for future collaboration with local governments, other states, the Federal Government, and industry coalitions to mutual benefit;

Parsl’s vision is to facilitate the global trade of cannabis by managing and tracking the entire global supply chain. Parsl will be working to provide international standardisation of processes, data structures, practices and more in respect to the global cannabis industry. This would include classification of products, packaging, labelling, regulations and more.

We believe that this is what the legal cannabis needs and where it is inevitably heading. That is why we believe that the first regulatory body to implement our complete system will have the opportunity to be the genesis jurisdiction for where this all happens.

By working together with officials from the government in Rhode Island, Parsl sees an exciting opportunity to position the state as a leader in the global market.

Citizens of the state can be integrated into a process of reforming laws and regulations so that their democratic desires are able to be fully realized by government officials and regulators. The Parsl platform is designed to gather sentiment from KYC’d users in the platform, which contains their residential address so that all feedback and sentiment that is gathered can be made highly granular in terms of the advice for local regulators so that they can make fully informed decisions on things such as where different types of cannabis business can be located and how many can be in each area.

The data generated will be stored on a blockchain that is public, and so will be accessible by the Federal US Government and other governments for the purpose of assisting with organising their own cannabis programs using the same standards and framework as that which will be deployed in Rhode Island.

“To compile data and observations relevant to evaluating the suitability of blockchain technologies in other areas of Rhode Island State Government;

The Parsl platform is comprehensive in terms of the parts that would be required to run a cannabis program in the state of Rhode Island, which also sets the state up for trade across state, federal and international lines, when regulations will permit it.

Through this, there is the requirement for Parsl to facilitate many processes which take place under the auspices of the Government which overlap with other functions performed by the state of Rhode Island.

For example, Parsl’s system is able to track cannabis products fully and completely with full chain-of-custody information compiled into a lifecycle. This could be modified to also track things such as criminal investigative evidence or anything else that needs to be tracked.

Additionally, Parsl has developed a licensing and registration system for cannabis businesses that could be modified for general use by the state of Rhode Island for tenders, registration and licensing of anything that is done by the state.

Lastly, the sentiment gathering that is done using the Parsl platform could be extended to allow the state of Rhode Island to collect sentiment from registered citizens/voters on a range of issues beyond just cannabis.

“Blockchain technologies hold the potential to change the nature of data gathering and records retention for governments. A blockchain-based technology could open up possibilities for individuals and businesses to contribute canonical data on Rhode Island business climate, economic productivity, barriers to success, strategic advantages and disadvantages of regulatory regimes, etc.

A key feature of Parsl is the way we utilise the two-way information flow in our supply-chain tracking.

This allows businesses not just to accurately track their products but to collect information and feedback on specific product at the consumer end of the supply chain and trace all the way back to the products origin.

This allows any business to pinpoint problems in their operations in a highly specific and targeted way. Rates of spoilage, product loss or even just positive and negative reviews on products can be analysed and common factors can be identified down to the environmental conditions the plant was grown in.

This level of granular data gives every participant in the supply chain the ability to make informed decisions about their business and also the changes the industry needs.

“Records – State agencies accept submissions from businesses and individuals that areconsidered official records. Blockchain technology could be useful in registering andverifying these submissions, as well as any interaction with them by any party.

Problems currently exist with most state licensing and registration platforms. Generally they are difficult to use, not transparent, aesthetically poor and open to corruption.

Parsl technology has the capacity to implement a system where applications happen on-chain to provide transparency for the process. Once licensing and registration is completed, using Parsl technology, businesses can be KYC’ed to the level required and then this can form the basis of the process required for their application for banking and financial services.

The platform will then be able to simply collect fees for regulators as well as provide the appropriate notification to licensees when their licenses are about to expire providing a streamlined operational framework.

“Investigative Evidence Control and Chain of Custody – Many State agencies, but particularly DBR’s Medical Marijuana and Building, Design, and Fire Professionals Divisions mount criminal investigations and prosecutions. Blockchain technology could potentially assist in crafting an authoritative record of chain-of-custody for criminal investigative evidence

This is exactly what Parsl’s Law Enforcement module will achieve.

Currently it is difficult for Law Enforcement to easily differentiate between legal and illegal cannabis products. Parsl will allow law enforcement to  identify a person in the context of the cannabis industry and allow them to interrogate the blockchain in real time and view the current or potential inventory of each and every person to see what cannabis products they should or should not have in their possession.

On top of that, by using the Parsl platform, law enforcement are able to scan cannabis products to see who the current owner of a product is and determine if it is in the wrong hands. It will also put records of interaction between law enforcement and users on the blockchain, so that if a dispute arises there is a transparent record of what was investigated and what was found, protecting both sides from malicious activity and false claims.

Parsl will also be a powerful tool for law enforcement on a broader scale, as the blockchain will be an immutable record of the movement of cannabis and cannabis related financial activity. This means that for any investigation into black market influences on the legal cannabis industry, irregularities will be easy to detect and analyse, no matter when they happened.

“Antifraud – Many sectors regulated by the State contain the risk of fraudulent activity. Furthermore, several of these sectors are vulnerable to becoming victims of fraud themselves. Verification of business transactions through the use of blockchain technology could open a secure, industry-wide system to limit this risk.

Our closed eco-system tracking means that once users are verified within the system, Parsl technology can automate the verification and approval of any transaction they try to make making it close to impossible to commit fraud with any cannabis related transaction.

To further strengthen this security, consumers will buy cannabis products with a Parsl issued smartcard they must use to participate within the system. This will also give the system a real world touchpoint to help to secure against any form of online-only malicious attacks from hackers and prevent users from exceeding purchasing limits by having a global identity within the cannabis context.

Dr. Balbin will be speaking at Quantum Tech

Dr Isaac Balbin will be talking this September at Quantum Tech, the world’s biggest business conference for the commercial application of quantum technology in Boston.

Like all forms of new technology it can be hard to separate the hype from the fact and as stated on Quantum Tech’s website: “when the subject is as complex and esoteric as quantum physics & mechanics, that problem is amplified”. The Quantum Tech conference is about quantum technology moving out of the lab and onto the shop floor.

There has been a lot of robust discussion in the tech world about how quantum computing will impact the security of blockchain. The Doctor will be speaking at the conference about how quantum technology is not only a threat to blockchain technology, but how the two technologies make each other more secure and more useful.