Why are Cannabis Businesses Focusing More on Blockchain Technology?

Why Are Cannabis Businesses Focusing More on Blockchain Technology

Cannabis and cryptocurrencies are the top growing industries over the past years. These industries have created a wave by providing investors with high returns. Cryptocurrencies have created technological disruptions whereas the cannabis has created new opportunities for the investors after legalization in 33 US states for medical purposes.

Over time, companies have learned that both the industries are putting a strong impact on their stock performance. Leafbuyer is one such company, which has continued to grow in both cannabis and cryptocurrency sectors.

The company share price has skyrocketed—gone up by more than 150%. Their traded volumes have also grown to 4 million shares from about 500,000.

Recently, Leafbuyer announced through the release that it’s using blockchain, which ensured that the marijuana market would be of transparency.

Blockchain is a new digital technology in which transaction made through cryptocurrencies are recorded transparently. Investors take it as a part of the digital infrastructure, which allows Bitcoin and other cryptocurrencies to exist whereas many computer programmers think that it’s not 100% safe.

However, more cannabis companies are implementing blockchain, but many are puzzled about what exactly the technology is and how it is going to impact the growth and other parameters.

“Blockchain is a new technology. People claiming to do it, I’m not really sure how they’re doing and what’s going on,” says Rama Mayo, the co-founder of Green Street.

The history of the blockchain technology is related to the ideas date back to 1970s. Ralph Merkle invented a method to monitor the transactions that show that every transaction links with the previous transaction. These lists are easy to store, and the information is public—anyone can access it. That’s the idea on which the concept of blockchain is based— a secure way to monitor transactions.

To understand this, let’s take an example. Suppose, you’re making purchases from an online site, which use blockchain for monitoring sales and shipping. If you buy a shirt for $50, the site would record that notifying the seller and handling the package to the courier service provider.

Many don’t understand the difference between cryptocurrencies and blockchain. Blockchain provides a safe way to monitor transactions worth huge amounts. Cryptocurrencies can’t work without blockchain—like if cryptocurrency is the bus, then blockchain is the road—a technology on which people trust to keep track of their digital payments.

However, blockchain offers more than just tracking transactions. Anything that enters into the series of transactions will be recorded. Finance, immigration, and cannabis industries are using blockchain in their own ways to simplify the difficult processes.

A pot startup Paragon launched its cryptocurrency named Paragon Coin (PRG), which is based on the blockchain technology. The company also started a new coworking space named ParagonSpace.

By using blockchain, the company is helping cannabis businesses make transactions. This makes sense as in the real world where it’s not easy for the cannabis companies to find banks to work with as marijuana is still illegal as per the Federal law in the United States.

Paragon explained that they have planned to use blockchain to encourage investors to use PRG to market marijuana and make transactions surpassing the obstacles created by traditional banks. The company’s initial offering of PRG in October 2017 generated sales of about $12 million worth of tokens to investors worldwide.

Paragon confirmed that its main objective for using blockchain is to create a secure system to ensure the growth and shipping of medical marijuana. The “seed-to-sale tracking” verifies that the strain you’re purchasing is verified by a farmer or lab, and it has been kept tracked along the way. Many cannabis companies are implementing the seed-to-sale system.

Blockchain is helping cannabis companies ease their processes and store transactions. This may work as a catalyst to legalize cannabis at the federal level, thus helping the patients to manage their conditions.

Talk to a cannabis doctor in Los Angeles to get legal access to medical marijuana.