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The cannabis supply chain faces a myriad of challenges. These include product diversion to criminal elements that boost illegal trade, juvenile cannabis consumption, and unknown product quality ending up on retail shelves. To mitigate such risks, industry regulators recommend a seed-to-sale tracking system.

With a seed-to-sale tracking system, all marijuana seedlings have a unique identifier. Thus, cannabis plants can be tracked across the entire supply chain, enabling regulators to identify weed products along with several characteristics. These include seed origin, cannabis strain, and supply chain transaction history. 

Blockchain technology is rapidly making inroads in cannabis seed-to-sale tracking. Among its myriad applications is the ability to track and trace anything. This is a cause of excitement for growers, retailers, and consumers seeking better ways to track their inventory throughout the supply chain. Read on to find out how this technology is revolutionizing the cannabis industry.

What Is Blockchain Technology?

A blockchain is a digital ledger of data distributed across a network of computer systems, from which it can be shared by a select group of participants. With blockchain cloud services, it’s easier to collect, integrate, and share data from multiple sources. The data is then split into shared blocks that are ‘chained’ together with distinctive identifiers. 

The blockchain network has no central authority. Since it is a shared and immutable ledger, its information is open to anyone within the group. So every time a new activity occurs, it’s reflected on every participant’s ledger. The ledger can be shared with other parties, but it cannot be altered. If someone interferes with one block in the chain, their version of the chain becomes invalid. This eliminates data duplication and increases data integrity.

The Misconceptions

Many people mistakenly assume that blockchain is the same as cryptocurrency. Even stakeholders in the cannabis industry have difficulties differentiating the two concepts. Yes, blockchain technology supports cryptocurrency. But the two are not synonymous. Blockchain technology is devoid of the risks and regulatory concerns linked to cryptocurrencies. As such, it can enhance seed-to-sale tracking systems.

Distributed Databases

Distributed Databases

Most traditional seed-to-sale tracking systems use centralized database architecture. This central database executes and stores all supply-chain transactional data in a single location. 

Blockchain networks don’t rely on a central database. Instead, a blockchain system shares the responsibility across a series of databases or ledgers. The ledgers are connected chronologically to create a chain. Each distributed ledger stores all transactions in the system. For all new transactions, all ledgers verify that the transaction is legitimate. 

You can access all past ledgers or blocks linked together in a chain. Thus, a blockchain database preserves the full history of all the executed transactions. This is valuable as blockchain promotes authenticity by confirming with different users that their copy of the blockchain corresponds with all of the others.

Blockchain’s distributed ledgers may store the following crucial data:

  • Genetic information
  • Cultivation inputs
  • Lab results
  • Location tracking
  • Supply chain logistics
  • Consumer feedback

A blockchain’s distributed database provides several benefits over a central database tracking system. These benefits address several cannabis supply chain risks, such as product quality and product diversion. 

Benefits of Blockchain Technology in Cannabis Track and Tracing

Quick Traceability

Blockchain systems store large datasets. Yet, stakeholders can still get quick access to a specific product’s origins and transactional details. Take the example of Walmart’s implementation of IBM blockchain technology in 2018. This was after an E. coli epidemic in their romaine lettuce. Blockchain cut down the amount of time it took supply chain tracking systems to trace lettuce sources from 7 days to 2.2 seconds. Blockchain technology can expect similar traceability speeds in cannabis supply chains.

Real-time Tracking

Canna-businesses are required to create and submit processing and sales data to regulators. This is called cannabis passive reporting. This procedure is time-consuming and expensive. It may undermine the competitiveness of the legal cannabis market compared to the illegal weed market. Real-time tracking allows your business to submit all information to regulators immediately. 

Blockchain technology can also record all cannabis seedlings from the farm to final distribution. This real-time tracking helps to prevent product diversion in the illegal cannabis market. It also facilitates the prosecution of unlawful diversion. 

And lastly, block chain’s real-time tracking allows quick insight into a product’s history. This means regulators can inspect all cannabis products and their transaction records immediately. Ultimately, this helps to facilitate quick product recalls. 

Data Integrity

Data Integrity

Product diversion is a problem dogging the cannabis industry. It is the sale of legal cannabis products in the black market by cultivators to make excess profits.

Blockchain technology is dubbed the enabler of trust. This means that parties in the supply chain don’t need to know or trust each other to engage in value exchanges with total assurance. This is because blockchain forms a transaction system that is safe, unalterable, and auditable. Its distributed databases and proof of work algorithms make this a reality.

For instance, a ledger cannot be altered once it’s created. Instead, new data and amendments to previous entries form new ledgers. Thus, the original ledger remains constant, an unchallengeable proof of what’s inside. 

Also, a network of users known as “miners” authenticates each transaction. The work of these miners is to carry out large computations to show proof of work. They do this before they can insert a new block into the chain. The amount of work needed to form each block is a lot. 

This shared verification method mitigates the risk of product diversion. Therefore, it discourages tampering and collusion in the ledgers. Thus, it may put off anyone who may think of creating a whole blockchain with altered data to swap the real copies.

Better Supply Chain Efficiency

Labour expenses are a major headache among cultivation facilities and retail outlets. Blockchain can rationalize time-consuming cannabis supply chain activities. These include tracking, reporting, and auditing. 

Ultimately, this reduces the need for personnel and oversight associated with those functions. Moreover, supply chain stakeholders don’t need to hire, compensate, and trust a third-party company. Of course, implementing blockchain technology requires an initial outlay. But in the long run, canna-businesses will likely realize significant cost savings.

Product Validation and Standardization

Blockchain’s ledgers hold transaction details. This helps promote standardization. It also minimizes the potential for intentional manipulation of past information.

Another key benefit of blockchain’s distributed ledger is access to genetic information. For a long time, cannabis has been identified largely by street names. However, blockchain tracking enables the collection, registration, testing, and publication of genetic cultivar information. This is possible via the secure decentralized database architecture. 

Blockchain technology also enables cannabis retailers to confirm their inventor’s lab reports and other undeniable records. Ultimately, they can be sure of the purity and potency of the products they’re receiving.


Server disruptions in centralized databases would halt the processing activities. But if a single blockchain node fails, the rest of the blockchain nodes continue to carry out transactions unperturbed.

Blockchain also does not have a central point of failure. This is because all participants will have a copy of the ledger. Thus, distributed ledgers are more robust than a centralized system. Equally, blockchain systems allow the addition of several other nodes to the network. This allows you to scale up your database framework quickly.


Consumer Confidence

Blockchain technology provides consumers with access to authentic, verified product information. This is excellent from a quality assurance standpoint.

To prove your business’s competitive edge, you can show customers how your cannabis products are superior to others, from seed to sale. Presenting claims authenticated by a blockchain can drive consumer confidence and brand loyalty.

From a consumer perspective, they must know beforehand the type of product they’re getting and the type of ingredients used. The majority of cannabis consumers cite product transparency as an important factor influencing their purchase. They expect cannabis manufacturers and retailers to provide the relevant product information. 

By scanning the QR code on the product, end-market users can learn a lot about the product they intend to buy, including:

  • Which farm does the cannabis product come from
  • The list of product ingredients
  • Its best before date
  • Lab test reports
  • Transportation information
  • Storage information
  • Chain of custody

For growers and retailers, blockchain implementation helps you find details about yield cycles, shipped orders, test reports, product quality, and more. Moreover, you can find out how long before you get the ordered item. And when to restock to meet customer demand.

Reduce Product Counterfeit

Counterfeit products account for billions in trade every year. They affect many different industries, including the marijuana marketplace. Some of the counterfeits may even lead to deaths and significant losses in revenue for canna businesses.

Nonetheless, blockchain’s immutability allows for traceability of cannabis products from the manufacturer to the consumer. This helps to pinpoint where the supply chain breaks down. There is an opportunity to reduce the billions in annual losses. Moreover, it prevents the health hazards of counterfeit cannabis products.

Safeguarding Transactional Privacy

Securing data on the movement of cannabis is important. This is especially vital when you need to protect the transactional privacy of the end-user. Blockchain uses cryptography to encrypt and decrypt the data before it changes custody. 

Every time the cannabis product passes from one hand to another, the digital marker moves in the supply chain. The real-world chain of custody is also reflected by a series of transactions on the blockchain. This works well for selling over-the-counter cannabis for medical purposes. It brings full transparency to the product movement from the farm to the end-user.

Moreover, you can easily match prescriptions digitally with existing and sold inventory. This mitigates any malicious or criminal intent, as each milligram of cannabis is seamlessly traceable.

Safeguarding Transactional Privacy

Streamline Administrative Processes and Derive Valuable Insights

Blockchain can make administrative processes more efficient. It can also cut expenses by supporting an effective audit of supply chain data. Typically, manual checks for credit or compliance reasons can take several weeks. However, the blockchain’s distributed ledger network presents all the relevant information at once. So, this accelerates organizational processes.

Artificial intelligence models require quality training datasets to generate valuable insights. With all the data accessible in blockchain tracking, AI models can improve business decisions. You can gain valuable insights such as:

  • The type of cannabis product that is in high demand
  • When to stock products.
  • The cost of transferring the product to the consumer from one location to another during a specific time.
  • How to improve yields

Clinical Trials

The global market for marijuana-related clinical trials is mushrooming. Manufacturers and distributors need researchers to conduct clinical trials for the various products they intend to introduce to the market. The essence of clinical experiments is to ensure the products are safe and effective from the consumer’s health perspective. 

Blockchain technology can help with these trials. Blockchain’s transparency makes it possible to validate test findings and confirm consistency across multiple studies. The ledger’s unmatched security and immutability means clinical findings can be substantiated and free from meddling or user error.

Test results can easily be standardized and reproduced throughout an entire system with the distribution of the blockchain’s ledgers. This novel technology allows researchers to make up lost time by discovering what cannabis can do for human well-being. 

The Bottom Line

Blockchain is an emerging technology with breakthrough potential. It is particularly useful for tracking and tracing the cannabis supply chain. 

Blockchain promotes the transparency and traceability of products from the farm to the end-user. Crucially, this helps solve transparency challenges that have bedevilled the cannabis supply chain for years. This has a knock-on effect on various aspects. These include streamlining supply chain operations, eliminating fraud and authenticating against counterfeit products, data integrity, and guaranteeing high-quality products. 

More importantly, the product’s traceability will inform consumers about the product they are purchasing. Thus, when end-users know what they are purchasing, their confidence in the brand increases. Thus, this benefits cannabis dispensaries. It is, therefore, safe to conclude that blockchain implementation is a win-win for all stakeholders in the cannabis supply chain.