- Joe Biden’s policy on the decriminalisation of marijuana use differs from the views of the previous administration.
- Industry players explain how the new legislation may affect the operations of block-chain cannabis projects.
- Braden Perry, a regulatory and enforcement lawyer, says that blockchaining in the marijuana industry is still in its infancy.
With the Biden administration planning to decriminalise certain controlled substances, BeInCrypto has taken a closer look at how the planned legislation may impact the operations of blockchain startups focused on the cannabis industry.
As elected President of the United States, Joe Biden’s policy on decriminalising marijuana use differs from the views of the previous administration. Biden said during the election campaign that under his administration he would pursue the decriminalisation of marijuana and the deportation of people with previous criminal cannabis convictions.
He favours the legalization of medical cannabis and reschedules marijuana under federal law, allowing individual states to set their own local policies without federal intervention.
During the election campaign at a mayoral event in October, Biden said:
„I don’t believe that anyone should have to go to jail for drug use. We should decriminalise marijuana. Erase the record so that you can really say, in all honesty, „Have you ever been arrested for anything? „You can say „no“ because we are going to pass a law saying that there is no context to disclose about marijuana use.“
He also added, as an alternative to incarceration, that people with drug addiction problems should instead enter „mandatory rehabilitation“.
Requirements for cannabis growers and implementation of the blockade
The variety of applications in this new era of innovation and technological progress with blockchain technology seems to have almost unlimited potential.
As with the essential nature of the blockchain, cannabis pharmacies benefit from the usefulness of the blockchain in ensuring the traceability of medical cannabis. This includes identification, seed sales, strain, genetic information on cultivars, among other things. In other words, it is fully compatible with supply chain management.
In addition, consumers need protection from unlicensed growers and distributors who end up stealing market share by undermining the integrity of the legalised drug market, while government regulators are trying to adjust to the new demand in the medical cannabis market.
Let’s put this into perspective. One of the reasons the cannabis industry is moving towards blockchain integration is because of the intelligent contracting aspect of blockchain technology, which is responsible for controlling how information is recorded and received in the public ledger.
All components associated with the automated intelligent contract system collect digital signatures, capture time stamps, track shipping and deliveries, trigger payments between the parties, and any other actions required in this process. It ostensibly enables accurate transactions, which also negates the possibility of human error that plagues systems involving paper and manual workers.
Like traditional biotech and pharmaceutical companies, cannabis producers are required to follow strict manufacturing policies to ensure safety and quality. The advantages of the blockchain in this sector are paramount, as it offers proof of standard operating procedures (SOPs).
Certain health precautions must be taken into consideration. These include the controlled use of pesticides, meticulously measured nutrient solutions, temperature-controlled storage and sanitation procedures. They must be respected in order to operate within the parameters of the manufacturing guidelines.
A specific example of how all of this comes together is, for example, that the manager of a factory and horticultural facility should check and document a nutrient solution recipe, or the measurement of the amount of pesticide used. This is necessary because the process of growing cannabis is very delicate and tedious, and relies on great consistency and diligent feeding.
Therefore, the blockchain allows growers to validate the SOP process as it happens, allowing them to monitor the care of the plant at all stages of its life cycle in order to accurately verify the result and authenticity of the plant.
Market growth, a healthier economy and new jobs for people
To explore the issue further, BeInCrypto spoke to a source in the industry involved in the integration of the cannabis blockchain, which allows consumers to buy and sell cannabis products anonymously.
They explained that the blockchain is the best way to ensure that consumers get exactly the products they want. By attaching information such as certificates of authenticity, Terpine information and other necessary product information, the industry can better understand what people consume and why.
This data also enables producers, distributors and dispensaries to provide a platform for more direct feedback to their markets.
However, the company for which the source works has not yet launched its initiatives on the blockchain, simply because the blockchain is still very new to the general public and the companies that have deployed the technology have not seen much progress so far. Nevertheless, they predict that next year there will be massive changes for both the company and the industry as a whole.
BeInCrypto also asked what difficulties blockchain startups may encounter when adding other drugs to their product list. The source explained how companies will have to adapt to the changes and acclimatise to the new way of doing business, which includes absolute transparency regarding their products, as long as these products are legal.
Talking about the changes in the cannabis market that their team expects with the enactment of the law on the decriminalisation of drugs, they suggested that this will affect the economy and create jobs. They expect to see many kraft producers dedicated to the products they produce, stressing that it is the companies they want to support and empower.
According to the source, once the law is enacted, they see the possibility of new opportunities for business, with the ability to evolve as new perspectives change the landscape of the industry.
In addition, they believe in transparency and the digital transformation of the industry, which includes data documentation, empowerment of small business, consumer education, and honest and legitimate studies on health benefits.
As with the advent and subsequent growth of the legalized cannabis industry, they predicted that the industry would diversify to accommodate other legalized drugs.
They said that real growth would begin and that the industry needed to start from an honest and transparent environment in order to prosper fully. And while they and many people are not out of touch with other people’s feelings about their personal choices in a legal grey area, there are many who are.
They expect to see more consumption as demand increases, and this will give rise to many new businesses. Their job as an open source tool is to help these businesses grow while promoting knowledge sharing and education.
The source added that in all these fledgling industries, they believe that the first companies like Bitcoin Machine that sign up for this inevitable change will experience significant growth. As they have seen in other markets, shareholders will appreciate their innovation, transparency, dedication to their customers and being among the very first to be at the forefront of a healthier economy.
BeInCrypto asked the source for its opinion on the legalization of drugs in the United States such as small quantities of substances like heroin, cocaine, methamphetamine or LSD in Oregon.
They said that people need to teach young people to be more balanced and responsible with their minds and bodies. Chemicals can be used as a tool. However, tools can be both destructive and productive. It all comes down to education and use.
The situation from the perspective of regulatory and enforcement lawyers
BeInCrypto also spoke with Braden Perry, a regulatory and enforcement lawyer and a Digital Currency Board certified professional. Perry is involved in a number of areas encompassing new and emerging technologies, and his firm also advises clients on legal marijuana operations.
Currently, Perry is involved in helping companies implement technology, including blockchaining, and he represents individuals or entities before a wide variety of federal and state government agencies. „I focus solely on marijuana and will stay away from other drugs because they are still illegal today,“ said Perry.
Similar to the remarks made by the source mentioned above, Perry said that the blockchain in the marijuana industry, like the blockchain itself, is still in its infancy, „but at the peak of rapid expansion“. He went on to say
„Legal marijuana companies that see the potential and are proactive in its adoption are likely to be the pioneers of innovation and ahead of the curve when the benefits are fully realised. There is an opportunity for efficiency gains in terms of transparency and cost reduction, and some leading applications are developing. As the regulatory landscape evolves with the technology, other marijuana companies are likely to follow. »
With the entry into force of the Drug Decriminalisation Act and the laws already passed in five states at state level, Perry offered a prediction that he based on current trends. He said:
„Solutions and supply chain monitoring are likely to be the biggest trends in the block. The solutions will be able to make the tedious tracking from the field plant to the supplier efficient and much less cumbersome. It will also help to verify brands and quality. In addition, the use of private blockchains within organisations will change the way companies manage logistics“.
But the adoption of the blockchain faces a challenge because of uncertainty about how regulators will deal with these policy changes, coupled with technology and virtual currency. Perry explained that all the federal regulatory agencies seem to have something to say about the blockchain and its problems, but none has taken a leading role in the matter.
„For example, the Internal Revenue Service has classified virtual currency as property, and the Commodity Futures Trading Commission has declared it to be a commodity. The Securities and Exchange Commission has put in place a securities structure surrounding ICOs, and no agency has classified virtual currency as real currency. That’s true with the blockchain. Until the regulatory structure is clear, many companies will be reluctant to use technology to innovate their business processes,“ said Perry.
BeInCrypto asked what he thought about whether or not the cannabis industry would change once the new law comes into force. Perry explained that „most marijuana companies would benefit from some aspect of blockchain technology, product supply, fair prices, efficient supply and better product tracking. He added:
„This will also allow marijuana growers to manage their production and storage in real time. From seed supply to harvesting to selling, it is possible to record on a blockchain, which helps producers and consumers to quantify, monitor and control the farming process“.
In his final reflections, Perry stressed that the potential of the blockchain to offer is vast and that the legal cannabis industry that seeks to innovate and take a proactive stance in its uses is likely to reap benefits that may transcend the scope of the imagination.
„As the regulatory framework evolves with innovation, business will benefit. But this regulatory framework is likely to delay innovation and frustrate those who are ready to adopt new technologies,“ said Perry.
Cannabis projects‘ actions soar after elections
This has been painful for investors trying to profit from the cannabis sector. However, with Biden’s new drug decriminalisation policies on the approach, this feeling is about to change as new potentials develop.
While presidential elections were underway on 3 November, five states passed new laws legalising cannabis and defining the scope of decriminalisation. These states included Mississippi, South Dakota, Montana, Arizona and New Jersey.
This means that the Biden administration does not plan to stand in the way of states that wish to independently expand their cannabis laws. This comes at an opportune time, as states need taxes.
At the end of the elections, the shares of Canopy Growth and Tilray increased by 20% and 50% respectively, while Aurora Cannabis soared to 128%. And all three still maintained significant increases after the elections, at the time of the press.
According to the Palm Beach Research Group, cannabis sales and tax revenues have reached unprecedented levels. For example, sales in California averaged 53 percent higher than the previous year, and Oregon reported a 58 percent increase in sales over last year. Colorado, on the other hand, is expected to see sales reach an all-time high of $2 billion in revenue, four years ahead of schedule.
Incredible as these numbers are, it seems like only the beginning. A report published by Prohibition Partners predicts that the global cannabis market will explode to $103.9 billion by 2024.