Over the past decade, there has been a significant shift in the regulatory landscape regarding medical cannabis. Several countries and states have enacted laws allowing for the use of marijuana in medicine, which has contributed to the growth of the market. However, in parallel, adulteration with synthetic cannabinoids that may be harmful to patients increases entailing more stringent supply chain transparency regulatory requirements placed by the governments. In this article, we show how medical marijuana manufacturers and suppliers can address raising compliance challenges and save the lives of end consumers with PharmaTrace solutions.
Medical cannabis, also known as medical marijuana, refers to the use of the Cannabis indica and Cannabis sativa, or their chemical compounds for medical purposes. The plants contain over 100 different cannabinoids, the most well-known being tetrahydrocannabinol (THC) and cannabidiol (CBD). They interact with the body's endocannabinoid system, which plays a role in regulating various physiological processes.
In the US, it was California that passed the first statewide laws allowing the use of marijuana in medicine in 1996. As of June 2023, medical cannabis is legal in 38 states, four out of five permanently inhabited U.S. territories, and the District of Columbia.
In Europe, it is the member state governments who are to pass their national drug laws, although all of them are parties to the UN Single Convention. The Netherlands tracks the longest history of allowing medical cannabis. Dutch doctors have been prescribing preparations based on marijuana for more than 10 years. In Germany, the Federal Institute for Drugs and Medical Devices authorized the medicinal use of cannabis for special cases, in 2005. Thanks to this, more than 300 German people with severe medical conditions can buy marijuana-based products at pharmacies. Italy legalized the therapeutic use of cannabis in 2007, but only in 2014 it became freely available for patients. Medical marijuana has also been allowed in other EU member states, most recently in France, Romania, and the Czech Republic.
Further liberalization of the weed seems very likely. According to Gallup, 58 percent of Americans now favor legalizing marijuana, despite the majority having been voting against it since 1969 when the company launched the poll.
According to Fortune's business insights, the global cannabis industry will reach $197.74 billion by 2028 with a CAGR of 32.04% from 2021 to 2028. And medical marijuana will constitute its biggest part.
The demand for medical cannabis has been driven by patients seeking alternative treatment options, especially for conditions where conventional pharmaceuticals have limited effectiveness or significant side effects.
In nowadays medicine, potential therapeutic applications of marijuana include the following:
Pain management: Cannabis can help relieve chronic pain associated with conditions such as arthritis, multiple sclerosis, neuropathy, and fibromyalgia.
Nausea and vomiting: It can be used to alleviate nausea and vomiting induced by chemotherapy, radiation therapy, or certain medications.
Appetite stimulation: Medical cannabis can help increase appetite in conditions like HIV/AIDS or cancer, where appetite loss and weight loss are common.
Muscle spasms and spasticity: It may help reduce muscle spasms and spasticity in conditions like multiple sclerosis and spinal cord injuries.
Epilepsy: Certain forms of medical cannabis, such as CBD, have shown promise in reducing seizures in some forms of epilepsy, such as Dravet syndrome and Lennox-Gastaut syndrome.
Mental health conditions: Medical cannabis may be used to manage symptoms associated with conditions like anxiety, depression, post-traumatic stress disorder (PTSD), and insomnia.
Neurological disorders: It can be beneficial in conditions such as Parkinson's disease, Huntington's disease, and Tourette syndrome.
Glaucoma: Some studies suggest that cannabis can help reduce intraocular pressure, which is beneficial for individuals with glaucoma.
Inflammatory bowel diseases: Cannabis may help alleviate symptoms of inflammatory bowel diseases like Crohn's disease and ulcerative colitis.
Medical cannabis includes cultivars of the two major strains of the plant, Cannabis indica and Cannabis sativa, as well as potions, baked goods, and candies made from its extracts.
As a rule, patients need to see an authorized doctor to be issued a card that allows them to shop for marijuana-based medications at a dispensary or order from delivery services.
Production of marijuana-based products for therapeutic use includes 5 main steps: cultivation of herbs, extraction of cannabinoids, testing, distribution, and retailing. All of them require manufacturers and their partners to follow a number of administrative, regulatory, and logistical requirements. However, the supply chain poses the biggest number of risks and challenges.
Here are some of them:
Counterfeit and adulteration: Counterfeiting has been a tradition in the weed industry, but it’s reaching new heights amidst newly adopted legalization with synthetic cannabinoids being the main threat. They can have significantly different pharmacological properties compared to natural cannabinoids. Synthetic cannabinoids may have higher potency, different effects, and an increased risk of adverse reactions including altered mental status, seizures, confusion, loss of consciousness, and hallucinations. In some cases, they have been associated even with hospitalizations and fatalities.
Regulatory Compliance: Compliance with regulations related to cultivation, processing, packaging, labeling, testing, and distribution can be challenging, as they vary by country and jurisdiction. However, in most cases, provenance and seed-to-sale supply chain transparency are required from the manufacturers and their partners. This means appropriate technologies and practices have to be implemented to ensure secure transport and tracking, maintain product integrity during transit, ensure proper storage conditions, and meet delivery deadlines.
Recall Management: From time to time it happens that medical cannabis products need to be recalled from the market due to safety concerns, quality issues, or regulatory non-compliance. Effective recall management is crucial for ensuring patient safety, maintaining public trust, and complying with regulatory requirements. However, it can be challenging and requires reliable traceability systems, communication protocols, regulatory compliance, patient support, and coordination with regulatory authorities.
Supply and Demand Imbalances: Balancing supply and demand can be difficult in a rapidly growing market. Fluctuations in patient demand, regulatory changes, and production limitations can lead to supply shortages or surpluses. These imbalances can impact patients' access to medical cannabis and create challenges for businesses in managing their inventory and forecasting.
Obviously, to address the above-mentioned challenges, involved businesses need to ensure end-to-end supply chain traceability and data exchange. However, it’s easier to say than to implement in practice. With the solutions addressing only the above-mentioned problems, you will probably not reach the goal, and new challenges will continue to appear.
What is needed as well as to integrate the whole system, add all your partners to your supply chain network, ensure a secure and efficient exchange of data and notifications among all the stakeholders, including the governments that are involved, and, finally, automate processes to avoid human-made mistakes. Not to mention you should still stay competitive in the market and within your allocated budget.
Is mission impossible? We don’t think so. New technologies and the latest innovations come in handy in this case.
At PharmaTrace we use Blockchain and AI/ML technologies to provide our customers with the most comprehensive, scalable yet less costly solutions to address any serialization and track and trace issues they might face.
Here are some of the tools that will make the life of medical cannabis manufacturers, distributors, and dispensaries easier:
Serialization module: Our solution combines the benefits of blockchain technology with product serialization to create a robust and transparent system for tracking and tracing medical cannabis products throughout the supply chain. Serialization provides a unique identifier for each unit or package. And, Blockchain provides a decentralized and immutable ledger where serialized information can be recorded. Besides a serial number, each unit of medical cannabis can be assigned its relevant data, such as cultivation details, testing results, and distribution history. This creates a transparent and tamper-proof record of the product's journey, accessible to authorized stakeholders. By scanning the serialized identifier, stakeholders can verify the authenticity of the product and confirm its integrity, minimizing the risk of counterfeit or substandard products reaching the market.
Track and Trace module: Blockchain enables transparent tracking of the entire supply chain, from cultivation to distribution and sale. Every transaction and movement of medical cannabis products can be recorded and verified on the blockchain, providing stakeholders with a comprehensive view of the product's journey. Smart contracts, which are self-executing agreements on the blockchain, can be utilized to automate and enforce product verification, quality, and/or compliance rules. This transparency enables stakeholders to identify inefficiencies, bottlenecks, and potential areas for improvement and foster trust and accountability throughout the supply chain.
Product Recall: In the event of a product recall or investigation, serialization enables targeted and efficient actions. By having a unique identifier for each unit, it becomes easier to identify the affected products and trace their distribution to specific locations or customers. With serialized data recorded on the blockchain, locating affected products becomes faster and more precise. This accelerates the recall process, minimizes the impact on patient safety, and allows for targeted actions instead of broad, blanket recalls.
Product Shortages: By recording each transaction and movement on the blockchain, it also becomes less complicated to monitor inventory levels, and predict potential shortages. For instance, smart contracts can be used to automate the replenishment process. Predefined rules and triggers can be set based on inventory levels or other parameters. When inventory reaches a certain threshold, the smart contract can automatically initiate notifications to all the stakeholders or even purchase orders or production requests, ensuring timely replenishment to address the shortage.
Custom Tools: As far as the cannabis preparations and marketing are quite specific and differ from all other medical products, you may need additional tools and solutions to enhance productivity, make your operations more cost-effective, minimize downtimes, and enhance partner and customer loyalty. These may include IoT devices to ensure quality from cultivation and manufacturing to the dispensaries, or apps for end consumers allowing them to trace the origin of their preparations and exchange other data with manufacturers, pharmacies, and doctors.
Web 3.0 ID management: Web 3.0 ID management leverages decentralized identity solutions based on unique identifiers associated with individuals, organizations, or devices. Each participant, such as cultivators, processors, distributors, and regulators, can have their own digital ID, ensuring their digital identity is under their control. Web 3.0 ID management utilizes cryptographic mechanisms to ensure the integrity and authenticity of identity-related data. Digital signatures and verifiable credentials can be employed to establish trust between participants and enable tamper-proof verification of identity attributes. This enhances the security of the network, mitigates the risk of identity fraud, and ensures that only authorized and trustworthy entities participate in the network.
Collaborative platform: All our customers independent of their products can have access to our blockchain-based healthcare ecosystem powered by our utility token. Such collaboration can bring additional benefits by incentivizing participation, facilitating transactions, and promoting shared interests among stakeholders. For example, it can be used for data exchange or sharing useful insights across participants engaged in varying activities. We are also about to launch a sales platform that will give you even more visibility on the market.
Except for vital needs, solutions based on the Blockchain and AI/ML will bring some other valuable benefits to the players in the medical cannabis industry. Some of them include the following:
Regulatory compliance: The medical cannabis industry operates within a highly regulated environment in many jurisdictions. Traceability systems facilitate compliance with regulatory requirements by providing transparent and auditable records. The blockchain records provide a comprehensive and auditable trail of the product's history, including cultivation practices, testing results, and distribution information. It helps companies meet reporting obligations, demonstrate adherence to cultivation and manufacturing standards, and provide accurate labeling and product information. By maintaining compliance, businesses can avoid penalties, legal issues, and reputational damage.
Secure data sharing and access control: Blockchain allows for secure data sharing among authorized parties. With blockchain's cryptographic algorithms, sensitive information can be encrypted and shared selectively, ensuring privacy and data protection. Access to the serialized and any other sensitive data can be controlled through permissioned blockchain networks, where only authorized participants can view and update the information, further enhancing data security.
Consumer confidence and brand reputation: Blockchain-backed traceability promotes transparency and accountability, enhancing consumer confidence in the medical cannabis industry. You can choose to provide patients access to information about the product's origin, cultivation methods, testing results, and other relevant data. This transparency fosters trust by allowing consumers to make informed decisions about the products they use and ensuring they receive the quality and safety standards they expect. This also allows medical cannabis companies to differentiate their products based on quality, safety, and other factors, and distinguish themselves in a competitive market.
Data analytics and insights: Data collected throughout the product journey can be leveraged for data analytics and insights. And with the further use of AI/ML, companies can gain valuable insights into their supply chain, product performance, consumer preferences, and market trends. If you opt to keep a record of detailed product information, including genetic data, cultivation practices, and testing results, it may even support your scientific studies, strain development, and the exploration of potential therapeutic applications.
Integration with other systems: Blockchain allows us to integrate our tools with other existing systems, such as inventory management, quality control, and customer relationship management platforms. This integration allows for seamless data exchange and synchronization, improving operational efficiency and data accuracy across different functions within the supply chain.
Cost efficiency: Blockchain enables the automation of supply chain processes, reducing the need for manual documentation and reconciliation. For example, regulatory compliance can be ensured through smart contracts that automate compliance checks and trigger alerts for non-compliance. This reduces the costs associated with manual audits, inspections, and regulatory penalties. What is more, by reducing the risk of counterfeit products, fraud, and other supply chain disruptions, businesses can avoid costly legal issues, reputational damage, and loss of customer trust. And with a better understanding of the supply chain, they can streamline operations, reduce inventory holding costs, and improve overall supply chain performance.
The industry of marijuana for therapeutic use is dynamic, but there is a number of challenges that should be addressed by the involved companies if they wish to stay competitive in the market, grow their profitability, and optimize logistics and other operational costs.
Serialization as well as tracking and tracing of products is a crucial aspect of the medical cannabis supply chain management, regulatory compliance, and patient safety. It enables transparency, and authentication while providing valuable data for analysis and optimization. Implementing serialization systems based on Blockchain and other modern technologies with further integrating them into the broader supply chain infrastructure is essential for harnessing these benefits effectively.