The back pain was killing him – clearly, the time had come to seek treatment.
But instead of prescription drugs, Todd Guillion opted for medical marijuana.
Why not? The Orange County, California native figured it had to be safer than pharmaceuticals.
But shortly after beginning his cannabis regimen, he began suffering terrible numbness in his arms, hands and feet.
Had the legal weed poisoned him?
He took it to a nationally known lab to find out.
Result – his medical cannabis was shown to have been contaminated with high levels of myclobutanil, a toxic fungicide.
According to Anthony Torres, a senior researcher at Steep Hill Labs in Berkeley, California, it’s especially toxic when inhaled.
"Upon combustion, myclobutanil forms cyanide gas,” he said, “which can make it into your bloodstream…"
Unfortunately, the dangerous fungicide isn’t the only contaminant that can be found in California’s legal pot supply.
In a series of Steep Hill tests, 41 of 44 California pot products tested positive for 16 different pesticides.
Right now, the only way marijuana users from California – or anywhere else – can ensure their product is pure is through lab testing.
Obviously, this isn’t a convenient solution for casual users.
But help is on the way thanks to blockchain technology.
As you undoubtedly know, blockchain is the technology that gave birth to bitcoin, litecoin and ethereum – three of the cryptocurrencies turning the world of financial transactions on its head.
But the blockchain is impacting far more than the world of money.
In fact, blockchain can track, authenticate or verify any process, including the process of marijuana production and testing.
That’s where the “BLOCKStrain™” comes in.
BLOCKStrain (TSX-V:DNAX) is a proprietary software platform, which utilizes blockchain, that an innovative Canadian software company is unleashing on the marijuana industry.
It also happens to be the name of the company itself, BLOCKStrain Technology Corp.
BLOCKStrain is the brainchild of Tommy Stephenson, company CTO, Cameron Chell, the company Chairman and Robert Galarza, CEO.
They formed BLOCKStrain after seeing the need for a more efficient marijuana industry verification system.
“We are tackling one of the biggest issues in the cannabis industry,” Galarza said, “which is verification and visibility of inventory and product for consumers, producers and government. “
One of the biggest challenges the wave of cannabis legalization is creating is satisfying consumer demand – far more people want to buy legal marijuana than governments had anticipated.
This problem was highlighted in Nevada last summer, when three months’ worth of inventory sold out in two weeks after the state legitimized recreational cannabis.
All that demand revealed current verification methods for ensuring genetic purity and product safety are administratively cumbersome and unacceptably time-consuming.
BLOCKStrain’s technology aims to change all that.
“We developed a platform that allows us to streamline and automate the entire testing process for genetic testing, microbial pesticides – all aspects of testing,” Galarza said. “So that enables labs to move product through their systems quicker.”
BLOCKStrain (TSX-V:DNAX) also utilizes genetic testing to create a unique “fingerprint” that’s recorded on the blockchain, and then associated to an individual QR code which is then embedded into a comprehensive tracking process.
This makes the tracking and testing available on the blockchain viewable in a completely transparent way.
“So if you are looking at markets where people are looking for a product,” Galarza said, “with our system you can not only find the product, you can be sure that product is exactly what it says it is and that it is pesticide-free.”
The nuts and bolts of this system were created by Stephenson, the former CTO of California based Ghost Group which created the largest tech player in the cannabis space, Weedmaps.
Weedmaps is an online community of legal marijuana enthusiasts who review and discuss cannabis strains and local dispensaries.
Investors are beginning to see immense potential for BLOCKStrain Technology Corp. (TSX.V: DNAX), as evidenced by their having poured $10 million into the company in a private placement offering that was closed in March.
That’s nearly three times more than the $3.5 million the company had originally sought.
A big reason we believe the placement was so successful is not only BLOCKStrain’s ability to protect the intellectual property (IP) of growers’ varietals and strains, including those under development, but also the complementary suite of software products the company is developing in order to maximize efficiency in this developing industry.
Early adopters of Blockchain include WeedMD, Inc., a Canadian licensed producer of medical marijuana that has invested in the company and plans to integrate BLOCKStrain’s technology into its platform.
Derek Pedro, a design, cultivation and production partner at WeedMD, said the ability of BLOCKStrain to protect its many marijuana varietals was the key reason it signed on with the company.
“After conducting an extensive review of the blockchain technologies being proposed for and utilized in the cannabis sector,” he said, “we believe that BLOCKStrain is best positioned to protect our intellectual property by further validating and securing our best-in-class genetics.”
The importance of BLOCKStrain’s ability to protect cannabis industry IP cannot be overstated.
“The biggest issue in the marketplace is that there is no practical intellectual property protection for cannabis strains,” Galarza explained.
“There was a case recently where a licensed producer sold a mothering plant for over $1 million dollars” he added, “but the secondary producer said that it died in transit.”
Yet somehow a product the secondary producer began selling shortly afterward was “eerily” similar to the original licensed product.
Galarza believes the secondary producer could have developed a hybrid from genetics the original licensed producer had supplied.
“Essentially (that’s) bypassing the license,” he said, adding that this could have been prevented if BLOCKStrain (TSX.V: DNAX) had been in use because the genetic “fingerprint” would have been evidence showing that the secondary producer pirated the licensed product.
In addition to WeedMD, several other licensed producers are expressing interest in signing on with BLOCKStrain.
While these clients will obviously generate revenue, the company won’t be relying exclusively on large enterprise clients for it.
That’s because its revenue model is built largely on volume and incremental usage.
The way it works is every user of the system will pay reasonable fees based on what parts of the blockchain they want to access, or which of its features they want to implement.
These include craft growers who want IP protection, individuals who want to make sure the product they’re buying is pesticide free, dispensaries that want to track where a product is in the testing cycle, and government agencies that want to verify the completion of tests.
“We base our fees on transaction volume,” Galarza said. “So instead of paying thousands of dollars a month for no reason, we create reasonable maintenance fees and then for each and every product you want to see tracked, we would tag that cost into the system.”
“We want to grow with the customer so there won’t be burdensome up-front fees,” he explained. “(It’s) a revenue model that’s strong and is built on volume. We grow as the industry grows”
In an industry where one strain can be worth millions of dollars, the potential earnings for a company that protects these strains could stand to earn big.
“And as a technology company we can scale as global markets open up,” he said. “It’s a system that we aim to integrate worldwide.”
BLOCKStrain (TSX.V: DNAX) is rolling out its technology in stages, with the first wave coming out in June.
This version will feature its automated testing component, where growers can use the system to book their product for testing and track it to and from facilities and labs.
The second phase will be rolled out later this year and feature more comprehensive tracking distribution channels. For example, a grower will be able to track the delivery route of his product and how it’s split amongst stores along that route.
That there is a demonstrated need for BLOCKStrain’s technology is obvious, but it’s hardly the only reason forward-looking investors should consider it for their portfolios.
Here are four more:
1. The company is getting a huge jump on potential competitors.
“There is nobody with a product like this in the market and we anticipate being ahead of everyone else,” Galarza said, adding that the only potential near-term competitor has stated that they will begin development in November. “Apart from that we haven’t seen anything quite like this.”
As a result, BLOCKStrain appears to have a first-mover advantage.
2. Canada is expected to legalize recreational marijuana this summer.
Last year legal marijuana sales hit $9.7 billion in North America. They could be on track to explode to $24.5 billion by 2021 – a figure that could go even higher with legal Canadian cannabis on the horizon.
As a Canadian company, BLOCKStrain (TSX-V:DNAX) will be in terrific position to not only capture revenue from the country’s booming recreational market, but also from the regulatory bodies in Canada that could use BLOCKStrain to ensure cannabis testing is done as required.
3. The worldwide marijuana market will skyrocket as more countries legalize pot…and BLOCKStrain could be positioned to get a piece of that action.
Across the world, more than 50 countries are legalizing or decriminalizing cannabis. This is a big reason the global legal cannabis market is projected to grow from $14.3 billion in 2016 to $63 billion by 2024.
This growth will create a huge demand for BLOCKStrain’s technology, as it ensures a safe and legal inventory of a product that up until now has only been available illegally for recreational purposes.
4. BLOCKStrain’s platform has other potential applications besides the marijuana industry.
Chief amongst these are the $3.2 trillion food industry.
For example, if you take one type of banana and send it for testing to show that it was grown in a certain part of the world and done so organically, that could all be verified by BLOCKStrain.
These are just a few reasons why investors should keep an eye on BLOCKStrain Technology Corp. (TSX-V: DNAX).
However, as is often the case with disruptive technology companies, time is of the essence.
Other companies trying to capitalize on technology and cannabis:
THC Biomed International (CSE: THC)
THC Biomed International Ltd operates as a licensed producer under Canada's Marihuana for Medical Purposes Regulations. It is also engaged in the research & development of the products and services to medical marijuana.
THC’s share price bounced back in November after the company announced the creation of THC2Go dispensaries – a fully owned subsidiary, focused on retail cannabis products – in the province of Manitoba.
iAnthus Capital Holdings (CSE: IAN) is a U.S. based cannabis company listed in Canada. The company has recently taken an interest in cannabis-based businesses in four U.S. states. This interest saw its stock price jump at the end of 2017 from below $2 up to its current price of over $5. It recently completed its acquisition of Pilgrim Rock Management, LLC, a management and services company that provides intellectual property licensing, professional and management services, real estate and equipment leasing, and certain other services to Mayflower Medicinals, Inc.
Mogo Finance Technology Inc. (TSX:MOGO): This is a new spin on unsecured credit, which is a burgeoning sub-segment of FinTech. Providing loan management, the ability to track spending, stress-free mortgages, and even credit score tracking, Mogo is at the forefront of an online movement to assist users with their financial needs.
Mogo’s software analyzes borrowers instantly and greatly reduces the traditionally cumbersome underwriting process for loans. It’s online only, so there’s very low overhead and a ton of cash to spend on marketing. Labeled as “the Uber of finance” by CNBC, Mogo is definitely turning heads.
EXFO Inc (TSX:EXF): EXFO isn’t new to the Canadian tech sector. The company was founded in 1985 in Quebec City, and its original products were portable testing products for optical networks. Since then, the company has acquired and built 3G, LTE, protocol, copper/xDSL, IMS, and VoIP test and service assurance products.
Recent developments from EXFO are promising for long term growth potential. The new baseband unit emulation technology which is sure to be adopted on a large scale, as the tech offers operators a reduction of costs and a faster revenue stream.
Pure Technologies Ltd: Pure technologies is all about critical infrastructure including water and wastewater pipelines, oil and gas pipelines, and bridges and structures. One of Pure Tech’s biggest achievements in this space is its SoundPrint acoustic monitoring technology, which could potentially revolutionize the industry.
Investors are watching Pure Technologies closely and the company could be a valuable addition to numerous portfolios going forward.
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