IBM has put forward a plan to use blockchain technology to support the supply chain for cannabis and cannabis by-products in British Columbia.
The drug will be legal across Canada by July 2018, putting the onus the provinces to regulate certain aspects like distribution, retail and a range of other matters – as they do for tobacco and liquor.
In a submission to the government of British Columbia, IBM highlighted the use of Blockchain as a technology to enhance the overall chain of custody.
IBM suggests blockchain is an ideal mechanism in which BC can transparently capture the history of cannabis through the entire supply chain, ultimately ensuring consumer safety while exerting regulatory control – from seed to sale.
In its submission, IBM said: “Blockchain is a highly effective trust mechanism which uses a cryptographically – secure shared ledger to irrefutably track complex transactions among many known parties. Its key attributes:
- It is distributed: no central system brokers transactions, instead each party in the business network is provided its own ledger copy showing all transactions, so truth is shared by design;
- It is immutable: cryptography ensures that transactions (blocks) once entered into the ledger (chained) can never be altered, so transactions are secure; and
- It is transparent: all shared ledgers across the business network hold all transactions of all parties within the network, ensuring consensus.
“Blockchain is rapidly becoming a world leading technology enabling the assured exchange of value in both digital and tangible assets, while protecting privacy and eliminating fraud. Its relevance to regulating cannabis is similar to its many chain of custody applications in areas such as pharmaceutical distribution and food chains.”
IBM highlights three key benefits:
- Blockchain can help the Provincial Government take control of sourcing, selling and pricing of products, therefore can reduce or eliminate black market sales completely.
- Blockchain can assist producers with real – time inventory management, greater projections of supply and demand, and also elicit trends of consumption through data analytics.
- Although the Government of BC hasn’t confirmed its what end user distribution model will be used, IBM anticipates that it is likely that government itself will play a role in that process. An interconnected Blockchain network can assist retailers identify supply/demand gaps ways to mitigate those gaps, providing feedback mechanisms to producers, and use data to create predictive insights