IBM is pitching blockchain technology to British Columbia's government as a tool for tracking cannabis through its supply chain as the province develops regulations for legal marijuana sales. In docu
IBM is pitching blockchain technology to British Columbia's government as a tool for tracking cannabis through its supply chain as the province develops regulations for legal marijuana sales.
In documents submitted to authorities, IBM argues that blockchain offers the transparency and control regulators need for the emerging market. "IBM suggests blockchain is an ideal mechanism in which BC can transparently capture the history of cannabis through the entire supply chain, ultimately ensuring consumer safety while exerting regulatory control – from seed to sale," the company writes.
The technology's main strengths, IBM contends, are that it's distributed, immutable and transparent. The company points to how blockchain works in other industries. "Its relevance to regulating cannabis is similar to its many chain of custody applications in areas such as pharmaceutical distribution and food chains," IBM notes. "The core to those supply chains is the same, assuring health and safety of consumers, preventing fraud and counterfeiting while creating a foundation of transparency upon which to base regulation."
IBM sees potential value for the province. The company argues that blockchain could help BC "take control of sourcing, selling and pricing of products," while also "reduce or eliminate black market sales completely."
The cannabis proposal reflects IBM's growing blockchain ambitions. In October, the company announced a partnership with startup Stellar and payment firm Kickex to build a blockchain-based banking system aimed at lowering transaction costs and speeding up cross-border payments for businesses and consumers.
IBM expanded its blockchain infrastructure in July, unveiling IBM Z, a data encryption system designed to prevent breaches. The timing reflects a security crisis across the tech industry. In 2016, hackers compromised over four billion data records, a 556 percent increase from 2015. Of the nine billion records stolen or lost over the past five years, only four percent were encrypted. IBM deployed IBM Z on its cloud platform as both an encryption engine for cloud services and a foundation for running blockchain applications. According to the company, IBM Z was created to become the "platform of choice for blockchain."
In August, IBM signed a memorandum of understanding with shipping company Pacific International Lines and Singapore's Port Authority. The three organizations plan to explore and test blockchain-based supply chain systems.
