Embracing new technology for a new cannabis industry

With Bill C-45, Canada’s cannabis legalization bill, moving through the Senate, politicians and pundits have furiously debated our best path forward. Reduction of youth consumption, decriminalization of adult possession, and the eradication of black-market profits are shared objectives between government and industry that have driven legalization discussions to date. While these priorities are often discussed through a regulatory or enforcement lens, limited attention has been paid to the technology-driven solutions that will be required to ensure they are achieved. Legislators, industry stakeholders, and regulators will need to track cannabis from cultivation to point of sale to ensure accountability and customer safety. Just as Canadians expect to be provided critical information about their food safety, history, and ingredients, they are entitled to this same information about legal recreational cannabis. The current methods deployed by Health Canada to track product under Access to Cannabis for Medical Purposes Regulations fall short of using the robust and technology-driven solutions available. Innovative platforms are needed to help the government to create an equitable, safe, and transparent marketplace. Prime Minister Justin Trudeau and his cabinet seem to understand this and have positioned themselves to work with innovators in the industry. The commitment to legalize, a pillar of Trudeau’s governing platform, positioned him as a different kind of leader, willing to listen, change, and evolve to meet the needs of Canadians. As the targeted legalization date approaches, the government’s resolve will be put to the test. Bill C-45 sets the stage for the success of the industry and opens the door for a technology-driven solution to be introduced. As recommended by the Task Force on Cannabis Legalization and Regulation, the Cannabis Act calls for the implementation of a seed-to-sale tracking system to prevent diversion and enable product recalls. Amercanex International Exchange chose to establish operations in Canada because of our desire to contribute to a safe, equitable, and compliant market. As the world’s first fully electronic commodity marketplace for cannabis, we have the proven ability to track products, support consumer safety initiatives, and facilitate the identification and collection of taxes, all in a low-cost, efficient, user-friendly, and transparent manner. We have considerable knowledge to draw from our experiences in Colorado and, more recently, California. If every-day Canadians have not yet thought about specific software services, they will certainly have a more vested interest in the immediate implications of getting this technology right. Product quality cannot be controlled, nor can our health and safety objectives be achieved if cannabis is not tracked from throughout the supply chain. With Canada’s relatively small medicinal cannabis marketplace, Health Canada has already had to recall a number of cannabis products. And with the cannabis industry expanding rapidly, there can be every expectation that we’ll see a growing pool of entrants and more segmentation. The Canadian cannabis industry will only grow in complexity. The regulations and the methods for verifying their efficacy must leverage all available innovations and technology to meet the massive task. With many Canadians inherently skeptical of the cannabis industry, a messy recalls process will be immeasurably damaging for the government, licensed producers, and all market stakeholders who have worked so diligently to make legalization a reality. Understanding, tracking, and actively monitoring the various segments of the supply and distribution chain must be the starting point of any decisions regarding accountability. And with a new industry like recreational cannabis, there’s only one chance to get it right. Canadian concerns about quality and accountability are normal for any new industry and should not be seen as a problem, but rather as an opportunity for our regulators and industry participants to grow and innovate. A complex and challenging task awaits our regulators who must quickly deliver a dynamic and robust national tracking system that can enable the government to begin the process of stifling black-market profits, protect youth from harm, and generate the revenue necessary to support the new enforcement challenges in the era of legalization. Dennis Garces is the president of Americanex International Exchange Canada, a software company working with the cannabis industry. The Hill Times