Blog Description

Is Blockchain Going to Regulate the Marijuana Sales?

Global Blockchain Market

ICT | Nov, 2017

The Bitcoin doesn’t require the third-party interference and is far more efficient than traditional banking solutions. It is safe to do the payments for marijuana, what else these cannabis companies are looking for?

Marijuana business need to work with huge amount of cash payments as they have no ability to get to banks, to do card payments, or use cheque payment method. That is a constant security threat to the business. With financial institutions evading the marijuana business, cannabis producers are swinging to the world's most famous advanced money bitcoin to offload heaps of green bills.

Let’s understand how the stuff works?

The very basic step- decide which marijuana product you want to buy, after selecting the product an employee asked to buyer whether he wants to use cash or digital currency. If the buyer opts for digital currency than the Trove employee asks customer to use a credit card to buy bitcoin through a POSaBIT kiosk, with a $2 transaction fee tacked on.

The customer, who might now possess bitcoin equivalent to the estimation of the buy, would then be able to recover the cash in the store. Or, then again, the purchaser can keep their bitcoin and utilize it anywhere else that acknowledges the cash. Now when the customer finishes the purchase, POSaBIT, the wallet with transaction fee, sends the payment in U.S. dollars to Trove's bank account.

Cannabis companies are turning to today’s most popular digital currency

Yes, Bitcoin is helping the cannabis companies to get over this banking problem. As, Bitcoin is an encrypted virtual currency which uses the Blockchain technology to perform financial transactions. During the financial crises in 2008, Bitcoin was developed as an alternative to traditional currencies to reduce effect of market fluctuations and inflation along with the motive to enable trust between unknown parties transacting.

Bitcoins don’t have actual physical existence, but the can be used as currency. The number of vendors accepting bitcoins are increasing with the increase in awareness about the cryptocurrency. Once the block of transactions is verified by a consensus of miners, it is added to a publicly available ‘distributed ledger’ in chronological order, and cannot be reversed or changed and is immutable.

Canada is planning to legalize marijuana

Next year in 2018, Canada is planning to legalise marijuana sales and leaving it up to county governments to regulate its sale and distribution. Blockchain technology could provide a secure way to track the legal sale of cannabis in Canada. The transaction which takes place two parties undergoes verification process will done by ‘miners’, which ensures that the transaction is between existing accounts of the parties on the network. So that there is no case of fraud.

Canada officially introduced the Cannabis Act – a bill that aims to make non-medical uses of cannabis legal by regulating the production and distribution chain across the country – earlier this year in April. Since then, the government has been focused on working out viable ways to regulate the market.

Hence, Canada will become the first large industrialized nation with a broad system permitting recreational as well as medical use of marijuana.

How Blockchain technology is helping the marijuana business to grow?

About $7 billion weed industry is developing, the conflicts between federal marijuana prohibition and state laws approving medicinal and recreational marijuana makes it practically unthinkable for some cannabis organizations to have bank accounts or credit cards.

Presently, many start-ups are utilizing blockchain technology to encourage business exchanges in the cannabis business. With advanced money, they want to focus on the about 75 percent of all cannabis businesses that operate only in cash and without bank accounts.

To track marijuana sales IBM announced purpose to use blockchain technology

According to IBM, the technology is an ideal mechanization in which through the entire supply chain, the blockchain can clearly capture the history of cannabis, which ensures the consumer safety from seed to sale. Blockchain is a highly effective trust mechanism which uses a cryptography. IBM is going to help the British Colombia government to track the sales of marijuana and maintain the prices, sources and distribution network. This type of transparency will bring a control to the supply chain within British Columbia.

IBM is expanding its blockchain technology platform by doing tie-ups with government and big food giants like Walmart, Unilever and Nestle to provide food safety. It seems like blockchain is becoming a IBM’s right hand.

Remarkably, can we make a NOTE here? The two-booming markets are intersecting with each other

In developed countries like United States, legal sale of marijuana and bitcoins market is intersecting with each other. In 2016, legal marijuana market was estimated around $ 6.8 Billion in sales and on the other hand the value of bit coin has reached $966.58 as of December 2016.

Bitcoins have a high acceptance rate, especially in the US. Moreover, ATMs and wallets are available for the purchase and sale of bitcoins, and the currency can also be changed. Growing number of start-ups working on blockchain-based solutions is one of the major contributing factor to the growth of United States blockchain market.

According to the recently published report by TechSci Research, “Global Blockchain Market by Type, By Application by Enterprise, by End User, Competition Forecast & Opportunities, 2012 – 2022”, the market of blockchain is expected to grow at a robust CAGR of 43% by 2022 on account of widespread implementation across numerous areas such as Internet of Things (IoT), banking & financial institutions, healthcare, media & entertainment, energy, retail, etc.  

According to Techsci Research, the global blockchain market based on application type, the Non-financial application is growing at a CAGR of over 84%.


                                                                                          Source: Techsci Research


Conclusion: With so much buzz about blockchain and so many projects underway now, we need to find out whether the technology is the real thing or not. But no doubt it seems faithful.

 

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