As the legal weed business goes mainstream, entrepreneurs are rushing to roll out support services tailored to the trade. For instance, recent entries have included specialized e-commerce platforms and dedicated transportation and warehousing services. But the nascent industry still faces some challenges, particularly when it comes to regulatory compliance and banking.
That may be about to change. Word has it that several startups are working on ways to use blockchain—the digital ledger technology that some say will revolutionize the banking and financial services industries—to fill the marijuana tracking and documentation gap. These entrepreneurs include Toronto-based software developer Blox Labs Inc. and Vancouver-based weed distributor Liberty Leaf Holdings Ltd., which are developing a blockchain-based "smart contract" supply chain management platform for the legalized cannabis industry. The "cannaBLOX" platform will help ease logistical bottlenecks, ensure product safety, minimize fraud, and assist with taxation and regulatory compliance, according to the joint partners.
Another technology provider, Newport Beach, Calif.-based Budbo, is also applying blockchain to the marijuana marketplace. Budbo's software application will use the technology to standardize interactions between cannabis users, dispensaries, and couriers, tracking marijuana movements "from seed to sale," the firm says. Budbo is funding its product development by launching a token sale, a fundraising strategy in which a company sells virtual coins representing shares in a cryptocurrency.