Blockchain Traceability for Legal Cannabis

Blockchain Traceability for Legal Cannabis

How can you trust Marijuana Suppliers?

Cannabis. It is a big deal – especially in the US – one of the biggest markets for Cannabis. California, Colorado, Nevada, Oregon, Washington, and many other states (a total of 19) legalize Cannabis in the US. The strict legalities make Cannabis coveted by users for recreational use, skyrocketing its demand along with the need to improve trust and product traceability right from the farms to the shelves. In 2019, North American Cannabis clocked a whopping market value of $US12.9 billion.

Cannabis as a medicine in the USA and Canada

Polemics aside, medicinal Cannabis therapy has certainly reaped colossal attention lately. All the attention can be ascribed to the infamy of Cannabis as the most commonly cultivated and trafficked drug in the world. In states, legalized use of hemp is primarily for medicinal purposes, marijuana and its extracts are extensively used to treat several disorders such as seizures, especially in children. The Drug Enforcement Administration (DEA) makes it binding for Cannabis medicine manufacturers to obtain a license and get medicines approved by the Food and Drug Administration (FDA) before releasing it for public use.

While in Canada, Cannabis has been legalized across the country for both recreational and medicinal use by the Cannabis Act, in effect, from October 2018. After Uruguay, the act has made Canada the second country that grants liberty to consume and cultivate Cannabis and its by-products. Canadian Cannabis cultivators are, too, obliged to acquire a license by Access to Cannabis for Medical Purposes Regulations (ACMPR) before putting anything out in the markets and onto the shelves.

Blockchain solutions for challenges faced by the Cannabis Industry

The cannabis industry faces copious security challenges, such as restricting juvenile Cannabis consumption, illegal trade, and merchandise adulteration. These challenges, if not truncated, could well impede the progression of the Cannabis industry. There is quite a modern solution to nearly every security concern the Cannabis industry could face – Blockchain technology. It is a technology that enables growers, retailers, and consumers to track Cannabis throughout the supply chain, all the way from seed to shelf.

Blockchain Traceability for Legal Cannabis

With Blockchain implementation, growers or corporations could find information about shipped orders, product quality, test reports, yield cycles, and more. Furthermore, retailers or inventory managers can know how long before they receive the placed order, restock to minimize spoilage, and much more. With a scan of a barcode or any other interactive technology, consumers could know which farm the Cannabis came from, its ‘best before’ date, and much more. Consumers can browse through the test reports, transportation and storage information, chain of custody, and much more about the product they are looking to buy.

When it comes to security, Blockchain enabled traceability is an impeccable solution as it not only boosts supply chain efficiency but also strengthens trust among traders and consumers. The US Cannabis market is expected to be worth a colossal $US 22 billion by Q4 of 2022. Such demand makes it imperative for growers to grow ethically, have certifications in place, track each milligram of hemp, and deliver prime quality Cannabis, which is made possible with sufficient security across the supply chain. Besides security, the Cannabis industry could use a comprehensive value chain digitization to ensure data organization in case of audits or recalls, staying informed with the latest government norms and evading shutdowns or license revocations, and plan cultivation and operational practices to surpass minimum Goods Manufacturing Practice (GMP) requirements.

How using Cryptography helps Digital Supply Chains

Keeping the data of the movement of marijuana safe and secure is essential especially when changing custody, or when there is a need to guard transactional privacy. Cryptography does just that by implementing engineering, computer science, physics, mathematics in encrypting and decrypting the data before it changes hands. This is suited for Over the Counter (OTC) selling Cannabis for medicinal purposes, as there is complete transparency of the movement right from farm to the consumer. Also prescriptions can be easily matched digitally with available and sold stock. It solves a lot of time for any malicious and illegal intent, as every milligram of this potent medicinal drug is flawlessly traceable.


The cannabis industry is just getting started. There will be multitudinous challenges for the industry to overcome in the coming years. Implementing Traceability and Blockchain technology will ensure supply chain efficiency, policy regulations, and high product quality; in terms of security, stock storage, transportation logs, and more could be of significant help for the traders. While there may be other challenges that need attention in the Cannabis industry, Blockchain technology is certainly a solution to a horde of concerns; it will enable traders to focus more on significant challenges such as production issues, sales and marketing, and more. For consumers, the product’s traceability will enlighten them about the product they are looking to buy. When consumers know what they are buying, their trust levels increase, making them loyal to the brand, thus benefiting traders. Blockchain implementation is certainly a win-win for all.

About SourceTrace

SourceTrace is a SaaS (Software As A Service) company that focuses on sustainable agriculture and empowerment of farmers.

SourceTrace's advanced technology platform DATAGREEN provides comprehensive solutions to manage all aspects of the agricultural value chain.


Presenting YourStory's 100 Digital Influencers of 2020



Impact of Digital Technologies on Food Trade in Southeast Asia

+ Download Now

Case Study

Case Study
Here’s the story of how SourceTrace’s solutions, deployed by Fruitmaster Agro Fresh Pvt.Ltd.


© SourceTrace. All rights Reserved
Food and Beverage Technology Review

Today, at SourceTrace we’re happy to share our moment of pride and fulfillment, having made it as the cover story in the Food and Beverage Tech Review.

Read full article


Download our new whitepaper
'Traceability in 2020: Global Scenario with a focus on India'