How Blockchain Can Benefit the Cannabis Supply Chain


Blockchain technology is useful for highly-regulated supply chains, especially for a largely cash-based industry like cannabis. Blockchain’s immutability makes it easy to automatically report transactions to the proper regulatory authorities. The transparency of blockchain would benefit cannabis supply chain by ensuring honesty from seed to consumer. Some companies and cannabis advocacy groups have also mentioned cryptocurrency as a way to digitize the massively underbanked $55 billion US retail cannabis market. BBHQ examined the blockchain technologies currently in various stages of implementation by the cannabis industry.

DMG Blockchain

DMG Blockchain is a Canadian-based diversified blockchain company who released a press release outlining their intentions to create a blockchain solution for the cannabis industry. Subsequently, DMG Blockchain has partnered with IBM to create Wazabi, “a global blockchain platform for regulated products [like cannabis].”

DMG Blockchain focus on building industry partnerships and plans to release the technology in Canada. Later it has a goal of rolling out the technology to the rest of the world. The reported use cases for the blockchain includes label verification, automated reporting to regulatory authorities, and supply chain transparency from grower to consumer.

In contrast to other blockchain contenders in the cannabis scene, DMG Blockchain has not released an initial coin offering (ICO). They currently have no public plans for a cryptocurrency. Their other projects include Blockseer, a law enforcement tool for catching blockchain criminals. Walletscore is their application for a credit-score and anti-money laundering tool for exchanges, financial institutions, and crypto wallets. They also manage the largest Bitcoin mining facility in Canada.


Nezly is a cannabis supply chain solution that utilizes the Stellar blockchain as part of, “an entire ecosystem built on blockchain for cannabis.” They are reported to have partnered with over 150 licensed cannabis farmers in the United States and Canada, totaling over $500 million in total revenue from cannabis.

Nezly’s cannabis marketplace exchange platform, CannaX, intends to use the latest in blockchain technology. They are placing an emphasis on security and transparency. As reported in the Nezly whitepaper, an integral piece of the CannaX cannabis marketplace is a gamification reward, called the Nezly token (NEZ). Performing transactions on the CannaX platform in NEZ represents Nezly’s fee for service.

Currently, the Nezly website is just a landing page and gives no further information. The company has largely gone dark on social media since their February 2018 ICO.

Paragon Coin

Paragon Coin made history by being among the SEC’s first case of, “imposing civil penalties solely for ICO securities violations.” Paragon Coin has subsequently come to a settlement with the SEC. In Paragon Coin’s case, their ICO raised $12 million. More on the scandal and Paragon Coin’s shady dealings can be found here.

Paragon Coin planned to use blockchain technology (called “Paragon Chain” on their website) for seed to sale tracking, product verification, quality assurance, and more. The cannabis advocacy company also has a platform in development meant to connect, “…every member in the Paragon ecosystem including cultivators, distributors, testing labs…”

Paragon Coin has not responded to BBHQ for comment.


Blockchain seems to be disrupting a lot of industries and has influences beyond the world of cannabis. However, the security, transparency, and ease of transaction validation makes pairing blockchain with highly regulated economies like cannabis an interesting environment for application.


Peter Buffo is a tech and culture journalist who has worked for various publications since 2016. He currently attends Loyola University New Orleans on a full ride scholarship.

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