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DMG Blockchain Solutions, a Vancouver-based cryptocurrency business, has announced the development of a blockchain-powered supply chain protocol for the legal cannabis industry in Canada, as per a press release on October 17, 2018.
The company revealed the project shortly after Canada legalized recreational use of marijuana use on October 17, as reported by national public news service CBC. Previously, the country’s acceptance of the medicinal plant extended to medical use only.
As per Health Canada, only 120 cannabis producers are licensed to grow the crop – equalling one producer per 300,000 citizens. Top cannabis producers believe legalization will cause an influx of demand, but the limited number of producers means supply chain issues and substantial labor shortages could quickly lead to scarcity of the product.
DMG’s cannabis supply chain-centric blockchain looks to solve such widespread scarcity and quality assurance issues. The firm is reportedly negotiating with quality assurance labs, industry players, marijuana distributors, and holding talks with regulators to ensure its technological solution remains compliant with industry-specific and local regulations. DMG is believed to be working upon several planned capabilities of the blockchain platform but cites interoperability with legal mechanisms, onboarding of new participants, and product recall as its most significant outlooks.
Dan Reitzik, the CEO of DMG, noted a robust blockchain solution is the “most logical choice” for the growing cannabis industry as the latter demands strict product management after legalization.
“The first use of blockchain was Bitcoin (BTC), but the perfect use is supply chain management for controlled products such as cannabis.”
The cannabis industry is a mammoth $23 billion market in Canada which includes 13 million recreational customers producing $6 billion in revenue each year, as per statistics provided by DMG.
Recently, supply chain giants, agricultural businesses, and retailers dependent on far-off producers have pursued blockchain solutions. Technology giant IBM is leading development in this regard, with the launch of its Food Trust platform and onboarding of Walmart, Carrefour, and 3M as clients.
As reported by BNN, the blockchain-based food tracking network is a cloud computing system that uploads data from each transit point to a database accessible by privileged parties. In case of a product defect, users of the platform can scan QR codes of a “bad” shipment to pinpoint the exact producer who supplied the goods. Using blockchain technology brings the investigation process down to a few seconds, in stark contrast to several days in currently-used systems.