Blockchain is a system that records information, assigning each piece of information with a non-alterable identifier which is logged into a public ledger. While blockchain has until recently been primarily used for cryptocurrencies, the same system can also be applied to DNA to trace the genetic makeup, grower, and even the origins of cannabis strains.

Molecular tagging is a process where DNA is used to label physical objects, similar to how a barcode label is printed onto the packaging of purchasable goods. The same method can be applied to cannabis in combination with blockchain technology.

HOW EFFECTIVE IS THIS TECHNOLOGY APPLICATION? 

The regulatory scrutiny that has burdened the cannabis industry along its legalization journey is finding a more positive use. The extreme measures – including weighing, measuring, and waste management – which are enforced by law may make it easier for producers to implement and adopt these technologies. But what need is there to do so?

The cannabis industry’s growth in the medical space is strained at best. While cannabis is frequently recognized as an effective treatment option for a wide variety of illnesses, cannabis-based products are still relatively niche. This is due primarily to the difficulties of ensuring and reproducing stable cannabinoid profiles and quality from one batch to the next. Furthermore, the pharmaceutical industry has yet to identify and isolate each cannabinoid compound for synthesis, effectively maintaining agriculturally derived cannabis as the standard for medical applications. 

Molecular tagging offers an alternative quality assurance of medically used cannabis on small-scale blockchains. When implemented early in the supply chain during or after harvest, the blockchain can measure and log the chemical profile and quality from seed to sale, providing scientists and medical providers with the data needed to select and prescribe the best cannabis-derived product for treating their patients’ specific conditions.

Using molecular tagging and blockchain technology works at a micro and macro level. Consumers, regulators, and even law enforcement can employ tracking technology to trace the source of a certain marketed product or strain back to the grower and either corroborate or contradict the authenticity of a specific batch’s supply chain. On a molecular level, pharmaceutical companies can ensure that a particular product or strain is a viable option for treating a specific disease with a readily-available cannabinoid and concentration report.

IS THIS TECHNOLOGY READY FOR MARKET?

While molecular tagging and blockchain technology has been around for a few years, their joint participation in the cannabis market is limited. However, some players are developing and implementing these technologies for a growing number of cannabis clients.

Trutrace Technologies is a SaaS focused on product verification. The company offers clients a cloud-based blockchain software platform that connects product testing throughout the plant’s manufacturing cycle. The company’s potential to track and verify intellectual property provides a unique edge in the budding market, especially for niche growers and manufacturers looking to stand out among the competition for medical use. And with diversified pricing options for cultivators, distributors, and labs, the technology is start-up and UX friendly, boasting an attractive online monitoring system.

Applied DNA is another player that has recently entered the cannabis market. This company has been providing this technology-based service for years for goods, including high-end leather and wines. The company experienced a growth boom during the COVID-19 crisis when it became a staple provider of diagnostic PCR tests and virus prevalence services for various institutions. The company uses that same technology to verify its clients’ cannabis products. Additionally, the company’s proven track record within the medical industry lends it a competitive authority.

PITFALLS TO NEW TECH

While the need and potential for this new technology are undeniable, there are substantial barriers to implementation.

The market is small and young. Within the next few years, emerging players will not only need to produce service solutions that are advanced enough to keep up with the growing demand for medical cannabis, but they will also have to create systems that serve future state-by-state and possibly federal-level legislation.

Perhaps the most concerning barrier are that the molecular tagging infrastructure within the cannabis industry is fractured. Each company’s blockchain exists within its ecosystem and cannot be shared across competing or similar blockchains. There is no centralized, comprehensive system or process available on a wide scale.

States, including Colorado and New York, are eyeing the prospect of molecular tagging legislation as demand for medical cannabis continues to grow. This industry has space for more security, product authentication, and controlled systems management.

The medical cannabis space depends on this emerging tech to push cannabis further into the medical landscape. And ultimately, cannabis companies that can employ this technology are better poised to meet the demand needs of the medical cannabis space.