Data Privacy Concerns Unavoidable as Cannabis Becomes a High-Tech Industry

by | Jan 27, 2021

Written by Jeff Baerwalde

The cannabis industry has exploded in the last decade. As this burgeoning industry targets a shifting customer base, innovation and cutting-edge tech approaches are vital for a company’s success. Cannabis companies that utilize data-driven marketing in a virtual world are able to gain a competitive edge, and big data is big business for cannabis.

But as data-driven technology moves the cannabis industry forward, there is an increase in vulnerability. Various apps and startups are already vying for access to patient information, which is necessary to improve research and development.

This article will explore how new technology has expanded the possibilities presented by the cannabis industry.

High Tech High

Technological innovations in the cannabis industry address issues at every stage of the business, from growing to selling and beyond. Wildly innovative new approaches include DNA sequencing techniques that allow growers to produce plants that contain zero THC or CBD, focusing instead on growing plants rich in rarer cannabinoids. These developers aim to eventually use this genetic sequence to implant rare cannabinoids into bacteria and yeast, creating industrial-scale production of natural plant chemicals without growing any plants at all.

One subset of the broader cannabis industry, the cannabis-infused beverage industry, has been stumped by a particular issue: CBD extract is most frequently produced as an oil, making it hard to dissolve in liquids. Researchers now are investigating nanoencapsulation methods that increase the bioavailability of CBD and make for a more water-soluble extraction.

Any cannabis farmer can attest to the fact that these plants love light, and they consume a lot of it, which means that they also consume a lot of electricity. To solve this environmentally and financially taxing situation, growers are beginning to use custom LED lights in lieu of the traditional high-intensity bulbs. NASA first developed this approach as they experimented with growing plants in space.

While tech innovations like LED lighting and condensed encapsulation techniques may not evoke immediate data privacy vulnerabilities, there are plenty of high-tech innovations geared towards consumers that should elicit a cautious and proactive security approach.

What Data is at Risk?

To best match customers with the specific cannabis cultivars and products that will fit their needs, companies like CannabisDNA offer a highly personalized service that enables customers to discover their specific genetic profiles. Based on a DNA swab test, the company will analyze individual genetic markers to match customers with specific cannabinoid guidance that will most accurately match their cannabinoid responses.

While this highly personalized service has great potential for allowing retailers to tailor their products to customers’ specific biological needs, it also presents a high risk for cannabis data privacy. If the genetic database for these customers was breached, sensitive health information could be distributed to interested parties on the dark web or even be used to blackmail prospective customers.

Since medicinal cannabis is now legal in 33 states, the industry has also altered its appearance to simultaneously appeal to many different demographics. Most cannabis dispensaries offer a clean, seamless retail experience, with integrated digital tools to help make the purchasing process easy. Apps like Eaze and Budly provide customers with door-to-door cannabis delivery service options, making the cannabis purchasing experience as smooth as possible.

But the more digital information generated, the more likely it is that private data is at risk. New apps pose problems for stored cannabis consumer data, including sensitive financial information, health records, transaction histories, and home addresses. Online databases could prove valuable for prospective hackers looking to glean insider information or gain access to possible targets.

High Tech Security Solutions and Breaches

The newly legalized cannabis industry faces complex regulations and requirements that can make data protection uniquely tricky. Cannabis licensing rules in many states require cannabis retailers and growers to maintain vast records. These enormous data stores present an enticing opportunity for hackers and a complex challenge for security companies. Security companies are rising to the bait, offering advanced solutions to help create secure in-person and digital protections.  

Cannabusiness security providers present enhanced real-time surveillance of marijuana retail locations and cannabis processing facilities. Sophisticated tech tools include sensors that can analyze residue after a firearm has been engaged. Meanwhile, mobile surveillance companies utilize geolocation transponders to keep video records of deliveries and in-person interactions, preventing access to unwanted visitors. At some cannabis processing plants, employees and visitors must pass a recognition test administered by a biometric access control system, allowing restricted access to the entire facility or specific areas.

Still, the industry’s overall security needs strengthening. A point-of-sale database system that was compromised in 2020 exposed the private data of almost 30,000 employees and customers linked to the cannabis industry. In 2016, databases connected to Nevada’s Medical Marijuana Program were exposed, revealing the private data of more than 11,000 people. The breach created unprotected access to sensitive information, including names, social security numbers, home addresses, and race.

Profitability and Privacy Security

As the cannabis business evolves to increasingly rely upon new tech solutions, it must meet the heightened demand for privacy security. Cannabis businesses face the difficult challenge of maintaining adequate outwardly facing cannabis data security measures while complying with the regulatory requirements of local and state agencies.

Navigating these often-opposing needs will likely continue to vex cannabis companies, but it is imperative that they try to find solutions to these challenges. The security of their customers and their ongoing profitability will depend on it.

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