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August 14, 2020updated 20 Aug 2020 12:32pm

Blockchain technology can help legitimize cannabinoid industry

By GlobalData Consumer

The Cannabinoid Association of the Netherlands (CAN), a consortium of Dutch CBD producers, launched a new web tool harnessing blockchain technology.

This promises to allow consumers to trace a CBD product from seed to shelf, with a 360 transparent view of every step of the supply and production process. This is particularly important considering the dubious legality, or ‘grey area’, where CBD resides. This situtation has left many manufacturers unaccountable to the same rigorous processes and rules applied to other industries, a worry to prospective consumers.

Whilst previous debates about the use of blockchain for this particular application had been stymied by the huge focus on blockchain as a (often turbulent) replacement for currency and slow performance, it seems that technological innovation is beginning to close the gap between decentralized platforms like blockchain and their centralized counterparts.

This will only narrow, with proposals for a cross-chain blockchain network structure, supporting message transmission between chains, decreasing time to load. This ensures that consumers can receive information in a timely manner, helping boost its use case, uptake and as a result, improved scalability.

The use of blockchain technology to track the production chains of cannabis related products is not new

Only last month, MediPharm Labs Corp, a Canadian Cannabis pharmaceutical company, announced a project aimed at tracing medicinal cannabis using blockchain technology. This is to be in partnership with University Health Network and Medical Cannabis by Shoppers Inc.

This is especially important; as medicinal cannabis consumers need to be sure that the product they purchase is produced as marketed, ultimately having the desired medicinal effect on the user, and has not instead come from the enduring black market.

Ultimately, for both CBD and Cannabis, blockchain technology provides legitimacy to the industry, allowing companies and consumers alike to ensure that they buy from reputable manufacturers, weeding out manufacturers that misrepresent their production processes for the sake of profit.

Moreover, as speed and performance improves, so too will the adoption of blockchain technology for supply chain transparency across industries and markets.

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