Canada eyes blockchain to track cannabis market

July 27, 2018
Chris Wheal

Canada is reviewing the possible deployment of blockchain technology to track the flow of legal product in Canada’s marijuana market without compromising the privacy of its customers, reports CBC News.

Cannabis leaf

Canada will legalise the sale and use of cannabis from October: Shutterstock

The Cannabis Act authorises Health Canada to implement a national tracking system for marijuana — following the journey from seed to sale — to protect the integrity of the legal market.

The report suggests that blockchain could be valuable to the cannabis industry in Canada ahead of October 17, the date on which it will be made legal for recreational use. Prime minister Justin Trudeau announced last month that the country would follow Uruguay in dropping restrictions on its citizens buying and using cannabis.

The industry is interested in blockchain because of its ability to keep stored information confidential in an age of widespread hacking. The various stages of verification and the encryption employed make it almost impossible for a single user to alter, hack or remove information.

A host of questions

As C-45, the Canadian government’s marijuana legalisation bill, slowly progressed through the two chambers of Parliament, questions arose over the drug’s regulation and how sales would be monitored.

The government requires record-keeping to “help prevent diversion of cannabis; that is, the movement of both legal cannabis to the illegal market and illegal cannabis to the legal market,” a spokesperson for Health Canada confirmed.

Any company authorised to operate in the cannabis industry, whether provincially or federally, will be required to file a monthly report detailing how much marijuana it grew, harvested, sold, destroyed, used for research purposes or lost to theft.

“Relevant security measures have been taken and requisite precautions have been implemented to safeguard cannabis-related data,” the Health Canada spokesperson said, Individual employees will receive specific training and will only be given the level of access to the database required for their positions.

Tool for the future?

According to Health Canada: “Blockchain was considered, along with several other options, as a potential solution to track movements of cannabis throughout the supply chain.”

However, the tracking system won’t be launched on blockchain initially. Health Canada said the technology could be a tool for the future, once there is a more established government standard for using blockchain.


Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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