Security Matters Develops Blockchain System for Cannabis Supply Chain Tracking
Security Matters has developed a blockchain-based system to track cannabis supply chains. All important data about cannabis will be stored on the blockchain. According to their patent application, the method involves labeling cannabis with a barcode that contains information about the plant’s chemical composition. The company has created a technology for generating a chemical fingerprint for any material—solid, liquid, or gas. This technology can be used to authenticate both raw plant materials and finished products.
After scanning the barcode, users gain access to information stored on the blockchain. Security Matters ensures the security of the network. The company’s founder, Haggai Alon, stated that their software allows tracking the entire supply chain, from seed to cannabis product. He emphasized that the chemical analysis does not affect product quality and does not require comprehensive genetic testing.
Blockchain-Based Payment System for Cannabis Businesses
In early August 2019, Arizona state authorities announced plans to test a blockchain payment system developed by the firm Alta. The platform aims to solve the problem of cannabis businesses’ access to banking services. In the United States, both medical and recreational cannabis remain federally prohibited, so banks refuse to work with the cannabis industry due to fears of sanctions from the Department of the Treasury.
Alta plans to launch a stablecoin backed by the US dollar at a 1:1 ratio. Arizona companies will be able to conduct financial transactions on the blockchain and use the stablecoin for money transfers. Alta co-founder Sara Wessel stated that the annual cannabis turnover in Arizona reaches $350 million. Farmers and retailers are forced to deal in cash, which puts the safety of employees and funds at risk, as large sums attract the attention of robbers.
In February 2019, California lawmakers proposed an interesting initiative: allowing cannabis businesses to pay taxes in cryptocurrency, eliminating the need to transport cash or use armored car services. However, the bill has not yet been submitted to the Senate for consideration.