Ron Strider
Well-Known Member
Whatever your view of cannabis, it's been with us for a long, long time – as far back as the third millennium BC. And for much of that time, attitudes to its use were – no pun intended – pretty relaxed. In fact as recently as the late 19th century even the generally unamused Queen Victoria was reportedly partial to a glass of tonic wine fortified with marijuana.
But by the early 20th century, governments began changing tack. The 1925 International Opium Convention put the drug firmly on the wrong side of the law in a wide range of countries around the globe. In the U.S., the first Drug Czar, Harry Anslinger, spearheaded legislation like the Uniform State Narcotic Drug Act of 1934 to criminalize marijuana. Successive White House administrations have enforced anti-cannabis legislation at a federal level through its Office of National Drug Control Policy.
However nothing remains static forever and in recent years we've begun to see the pendulum swing back in cannabis' favor. As of January 2017 a long list of nations including Australia, The Netherlands, Canada, Chile, Czech Republic, India and Spain have decriminalized use of the drug, while many more have authorized it for medicinal purposes. And in the U.S., while it is still illegal under federal law, eight states have voted to legalize recreational consumption. Medicinal use is permitted in 29 states, as well as the U.S. territories of Guam, Puerto Rico ... and its capital, Washington DC.
Colorado Leads The Way
As researchers from three different business schools, we visited Colorado to investigate the new cannabis markets. This state voted in the legalized and recreational use of cannabis in 2000 and 2012, respectively – despite the fact it remains classified by federal law as a schedule I narcotic alongside heroin and LSD.
Despite Colorado's unique position in the U.S., we were struck by the extent and sophistication of commercialization. Brightly colored marijuana dispensaries line many streets in downtown Denver. Inside these shops you are confronted with a dizzying array of products from the flower or bud itself to oils, resins, infused drinks and candies and even topicals such as patches and creams. Often very helpful and professional 'Budtenders' will help walk you through some of the variety on offer.
The large-scale cultivation facilities which are gobbling up Denver's instructional warehouse space, are equally impressive. There, you find the trappings of any other industrialized agricultural commodity: hundreds or thousands of plants under industrial lights, powerful fans, and complex irrigation systems, as well as staff moving plants between rooms and states of maturity, trimming, packaging, and labeling.
You also quickly notice the distinct mark of regulators across the industry. Particularly the radio-frequency identification (RFID) tags and labels that are attached to every plant and package of harvested material.
Generating A Multi-Billion Dollar Industry
This harnessing of an information technology to track the cannabis market is key to Colorado's forceful march towards creating a thriving legal marijuana industry. Crucially, the state's ability to use tracking and Big Data could provide a reference point for other jurisdictions interested in the regulatory potential offered by tracking. After all, this is a sector many are predicting will generate over 250,000 jobs by 2020 with legal marijuana sales projected by SiliconValley.com at $24 billion by 2025. Intriguingly, the tracking technology used in Colorado shares some similarities with technology used to monitor other controversial commodities such as weapons, precious gems like diamonds and pharmaceuticals.
Let us explain. Given the inherent conflict between Colorado and federal law over the drug, the state's regulator, the Marijuana Enforcement Division (MED), needs to show federal government that it is preventing the spread of cannabis into other states and to vulnerable groups such as minors. It accomplishes this at present by tagging every plant that is grown and insisting that every commercial facility growing and processing cannabis uploads daily reports to the MED's online database. Since the system – Marijuana Enforcement Tracking Reporting Compliance or METRC for short – was introduced in 2013 over 20,000 users have registered and over 5 million plants logged. This 'closed loop' 'seed to sale' inventory tracking system embodies a 'full traceability' mode of governance thanks its knowledge of the supply chain. It is only applied to the growth of marijuana for commercial purposes. Coloradans can grow non-commercial marijuana for their own consumption without the need to involve METRC.
Overcoming Legal Challenges
The instigation of an industry regulated through this type of monitoring therefore presents two types of opportunities for entrepreneurs. The creation and deployment of effective technology in the sector is obviously as much of a market in itself as the invention and sale of a smartphone or a CRM. Better tracking technology can also help to properly legitimize the cannabis industry itself and turn it into an industry where serious commercial entities can thrive and grow in the future.
Sure, the system faces some challenges. For example, the system has no oversight once the product reaches the end consumer, who may not use it – either accidentally or deliberately - in a safe and responsible way. Then there are the legal conundrums. Many entrepreneurs face challenges with banking, financing and advertising because of cannabis' illegal status at a Federal level. Some of the Ubuesque challenges the business community is facing were recently at the heart of John Oliver's masterclass on the U.S. legal marijuana industry in Last Week Tonight.
So, given the obstacles involved, is this market destined to remain little more than a 'cottage industry'?
Perhaps not. The commercialization of cannabis is proceeding with full force. Facing regulatory constraints, moreover, canna-entrepreneurs are undertaking radical experiments with business models, product innovation, consumer engagement, etc. Recent activities by Dixie Brands to enter other jurisdictions provide a good example of such experimentation. As we have argued elsewhere: these radical innovations may transform ancillary and wider markets – even commerce more generally.
Notwithstanding these and other challenges, the use of tracking as a regulatory device is expanding, operating in Oregon, Maryland and Alaska. There are other cannabis tracking companies such as MJ Freeway operating in Nevada and BioTrackTHC in Washington, New Mexico, Illinois, New York and Hawaii.
After all, tracking is part of day to day life. We track parcels and Uber drivers with our phones while retailers track us through those pesky cookies on our computers. Whatever the context, whether it is a regulator or us doing the tracking or whether it is marijuana or us being tracked, the technology is an essential part of contemporary commercial and regulatory life.
News Moderator: Ron Strider 420 MAGAZINE ®
Full Article: Tracking America's Cannabis Industry Through Big Data
Author: Daniel Martinez, Dane Pflueger, Tommaso Palermo and Daniel Brown
Contact: Contact Information
Photo Credit: Shutterstock
Website: {{meta.title}}
But by the early 20th century, governments began changing tack. The 1925 International Opium Convention put the drug firmly on the wrong side of the law in a wide range of countries around the globe. In the U.S., the first Drug Czar, Harry Anslinger, spearheaded legislation like the Uniform State Narcotic Drug Act of 1934 to criminalize marijuana. Successive White House administrations have enforced anti-cannabis legislation at a federal level through its Office of National Drug Control Policy.
However nothing remains static forever and in recent years we've begun to see the pendulum swing back in cannabis' favor. As of January 2017 a long list of nations including Australia, The Netherlands, Canada, Chile, Czech Republic, India and Spain have decriminalized use of the drug, while many more have authorized it for medicinal purposes. And in the U.S., while it is still illegal under federal law, eight states have voted to legalize recreational consumption. Medicinal use is permitted in 29 states, as well as the U.S. territories of Guam, Puerto Rico ... and its capital, Washington DC.
Colorado Leads The Way
As researchers from three different business schools, we visited Colorado to investigate the new cannabis markets. This state voted in the legalized and recreational use of cannabis in 2000 and 2012, respectively – despite the fact it remains classified by federal law as a schedule I narcotic alongside heroin and LSD.
Despite Colorado's unique position in the U.S., we were struck by the extent and sophistication of commercialization. Brightly colored marijuana dispensaries line many streets in downtown Denver. Inside these shops you are confronted with a dizzying array of products from the flower or bud itself to oils, resins, infused drinks and candies and even topicals such as patches and creams. Often very helpful and professional 'Budtenders' will help walk you through some of the variety on offer.
The large-scale cultivation facilities which are gobbling up Denver's instructional warehouse space, are equally impressive. There, you find the trappings of any other industrialized agricultural commodity: hundreds or thousands of plants under industrial lights, powerful fans, and complex irrigation systems, as well as staff moving plants between rooms and states of maturity, trimming, packaging, and labeling.
You also quickly notice the distinct mark of regulators across the industry. Particularly the radio-frequency identification (RFID) tags and labels that are attached to every plant and package of harvested material.
Generating A Multi-Billion Dollar Industry
This harnessing of an information technology to track the cannabis market is key to Colorado's forceful march towards creating a thriving legal marijuana industry. Crucially, the state's ability to use tracking and Big Data could provide a reference point for other jurisdictions interested in the regulatory potential offered by tracking. After all, this is a sector many are predicting will generate over 250,000 jobs by 2020 with legal marijuana sales projected by SiliconValley.com at $24 billion by 2025. Intriguingly, the tracking technology used in Colorado shares some similarities with technology used to monitor other controversial commodities such as weapons, precious gems like diamonds and pharmaceuticals.
Let us explain. Given the inherent conflict between Colorado and federal law over the drug, the state's regulator, the Marijuana Enforcement Division (MED), needs to show federal government that it is preventing the spread of cannabis into other states and to vulnerable groups such as minors. It accomplishes this at present by tagging every plant that is grown and insisting that every commercial facility growing and processing cannabis uploads daily reports to the MED's online database. Since the system – Marijuana Enforcement Tracking Reporting Compliance or METRC for short – was introduced in 2013 over 20,000 users have registered and over 5 million plants logged. This 'closed loop' 'seed to sale' inventory tracking system embodies a 'full traceability' mode of governance thanks its knowledge of the supply chain. It is only applied to the growth of marijuana for commercial purposes. Coloradans can grow non-commercial marijuana for their own consumption without the need to involve METRC.
Overcoming Legal Challenges
The instigation of an industry regulated through this type of monitoring therefore presents two types of opportunities for entrepreneurs. The creation and deployment of effective technology in the sector is obviously as much of a market in itself as the invention and sale of a smartphone or a CRM. Better tracking technology can also help to properly legitimize the cannabis industry itself and turn it into an industry where serious commercial entities can thrive and grow in the future.
Sure, the system faces some challenges. For example, the system has no oversight once the product reaches the end consumer, who may not use it – either accidentally or deliberately - in a safe and responsible way. Then there are the legal conundrums. Many entrepreneurs face challenges with banking, financing and advertising because of cannabis' illegal status at a Federal level. Some of the Ubuesque challenges the business community is facing were recently at the heart of John Oliver's masterclass on the U.S. legal marijuana industry in Last Week Tonight.
So, given the obstacles involved, is this market destined to remain little more than a 'cottage industry'?
Perhaps not. The commercialization of cannabis is proceeding with full force. Facing regulatory constraints, moreover, canna-entrepreneurs are undertaking radical experiments with business models, product innovation, consumer engagement, etc. Recent activities by Dixie Brands to enter other jurisdictions provide a good example of such experimentation. As we have argued elsewhere: these radical innovations may transform ancillary and wider markets – even commerce more generally.
Notwithstanding these and other challenges, the use of tracking as a regulatory device is expanding, operating in Oregon, Maryland and Alaska. There are other cannabis tracking companies such as MJ Freeway operating in Nevada and BioTrackTHC in Washington, New Mexico, Illinois, New York and Hawaii.
After all, tracking is part of day to day life. We track parcels and Uber drivers with our phones while retailers track us through those pesky cookies on our computers. Whatever the context, whether it is a regulator or us doing the tracking or whether it is marijuana or us being tracked, the technology is an essential part of contemporary commercial and regulatory life.
News Moderator: Ron Strider 420 MAGAZINE ®
Full Article: Tracking America's Cannabis Industry Through Big Data
Author: Daniel Martinez, Dane Pflueger, Tommaso Palermo and Daniel Brown
Contact: Contact Information
Photo Credit: Shutterstock
Website: {{meta.title}}
