Organizing and Catalyzing the Cannabis Industry

Budbo is an online platform that relies on blockchain and cryptocurrency to offer features and services intended to organize as well as catalyze the global cannabis industry. The British Virgin Islands-based company views itself as potentially the focal point of a community of medical professionals, researchers, farmers, patients, businesses, as well as government agencies operating in an industry that is fractured and fragmented but has huge potential for growth and opportunity.

The challenge arises from the almost revolutionary speed with which the cannabis landscape has changed. Governments at all levels, and worldwide, have gone from complex laws and regulations on cannabis and a plant component, cannabidiol (CBD), with stringent enforcement of compliance, to legalization (in whatever shape) and even encouragement. That has unleashed a burgeoning industry from seed to sale. That industry includes growers and their seed suppliers, global shipping, product dispensaries, delivery systems, a mini-boom in medical and product-development research, and, of course, the market of recreational and medical users. In fact, the legal cannabis market in the United States may reach $43 billion by 2025.

Explosive growth has come with problems including uncertainty about the origin, type of cultivation, and chemistry of many products. This has also affected their predicted effects when ingested or inhaled by users of different ages and states of health. Government regulation differs by jurisdiction (state-to-state in the United States) and in what it tries to control and how. These problems stem from a lack of research on plant strains and products as well as gaps in knowledge of the supply chain of a given product from seed production to commercial preparation, including manufacturing of CBD products.

After a well-publicized beginning about five years ago, with half-a-dozen founders–and adoption of blockchain and cryptocurrency–Budbo collapsed into legal struggles. Its long-awaited return with a new website came in 2020.  Since then, it has created and refined what appears to be its flagship product: version #2 of its platform, a mobile app for finding, learning about, comparing, as well as ordering cannabis strains and products (Project Phoenix).

Budbo Features and Services Based on Blockchain

Quality Assurance

For consumers, the platform offers a “find” or “match” feature for thousands of products locally available to the searcher. Budbo uses blockchain to track and verify the supply chain of cannabis breeds and strains from seed to sale. This includes seeds, cultivation, curing, shipping, preparation for retail, as well as other steps. This could also address problems of unknown or misrepresented sources and handling of cannabis and CBD products.  

Tokenomics 

The platform enables placing an order to pick up at a given supplier, usually a dispensary, or to be delivered. A Budbo-integrated wallet is used for safety and simplicity in purchasing. The Budbo Token ID is BUBO and the token standard is ERC20. Budbo Tokens will be the digital utilities providing access to the Budbo platform and its services and support transactions within the Budbo community.

The Budbo protocol layer is Ethereum, the second-most-valuable cryptocurrency blockchain after bitcoin. It generally received praises for its programmable smart contracts. Its challenges in scaling up, such as slow transaction speeds and high costs, may not trouble Budbo while it remains a start-up. The consensus mechanism is proof of work. The Budbo Token, introduced about four years ago, stopped trading when the company became embroiled in legal struggles; it was re-introduced about two years ago. It has spiked almost as high as $10 but now trades near a low of $0.02.

Chain of Custody

Supported by blockchain, Budbo’s tracking applications are advertised as giving unprecedented visibility to precious cargo. Shipment tracking will include all stages from the farm warehouse to the manufacturer or a fleet of retail delivery drivers. To accomplish this, mobile and electronic onboard recorders will be integrated with blockchain-powered telematic solutions.

Clinical Research 

By 2025, some 5.5 million Americans–2.4% of adults–will have registered as patients in medical cannabis states. Budbo will use blockchain to provide an immutable ledger for research findings related to the chemistry of cannabis and CBD products, dosages and their effects, clinical studies of health impacts of use, as well as the efficacy and side effects in medical use. Entry to the platform will include access to this blockchain database. Using the BUBO as its universal API key, Budbo ancillary cannabis industry services like testing labs and facilities will be able to store sensitive data on Budbo’s immutable ledger.

Fraud Prevention

Patient identification verification on the Budbo platform has an impressive potential to support prescribers and users of medical cannabis products. The U.S. Food and Drug Administration (FDA) has approved cannabinoids for the alleviation of such conditions. This includes severe epilepsy, nausea, vomiting caused by cancer chemotherapy, and anorexia associated with weight loss in people with AIDS. And there are other examples. Physician prescriptions enable patients to obtain these products reimbursed by health insurance. Recreational users purchase the same products often at a significant cost.

The potential for fraudulently obtaining products can become countered in different ways as individual states enact legislation. To take but one example, the California Department of Public Health has created a Medical Marijuana Identification Card Program system to issue a state-authorized Medical Marijuana Identification Card–and to mount an online system of verification. The state systems enable law enforcement and the public to verify that a patient or primary caregiver has the approval to “possess, grow, transport, and/or use medical marijuana in California.”

Each state that legalizes “adult use” of cannabis and its derivatives has a different approach to compliance. With a blockchain ledger for transactions from purchaser identification, to verification of credentials, to a record of purchase and delivery, Budbo offers prescribers of medical marijuana–and state compliance agencies–a potentially centralized site with high security against insurance fraud, including such omnipresent problems as use of an identification card beyond its expiration date.

Another potential of Budbo’s blockchain ledger that could serve prescribers of medical marijuana and its products is verified information on a product’s chemical composition, dosage impact, as well as other research database input to physician decisions about changing a patient’s prescription or authorizing reordering.    

For Budbo, There is a “Wild West” to Win

The sheer speed and scale of the cannabis industry growth as well as the change in the United States alone (and Budbo’s ambitions are global) argue for the potential of Budbo’s application of blockchain technology. Players on the legalized cannabis scene—dispensaries, producers, shippers—have come into existence with little “organic” organization or self-policing systems. Much of the legalized cannabis scene is experimental.

But it is the black market for cannabis and CBD products that may drive the growth of Budbo and its blockchain and cryptocurrency mediated services and features. A widely referenced report states that 141 million American adults live in 18 states that permit “adult use” of cannabis. This is roughly half of the annual U.S. cannabis demand being met by legal purchases in regulated marketplaces. That leaves, however, a huge black market with annual cannabis demand and consumption estimated at $65 billion. Both the legalized and illegal markets show exponential growth. 

This is the “ecosystem” that Budbo has set out to tame. Secure online purchases, verified pickup and drop-off of deliveries, authenticated product event lifecycle, the urgent issues of medical patient identity verification, as well as a robust database of relevant research—all supported by blockchain technology—give Budbo its edge.

Thus far, the only vehicle for investing in Budbo’s future is the BUBO Token. It has proven its volatility, to say the least. The markets have started offering it again.

Budbo’s founders seem impassioned about their mission in this market. They fought hard to regain legal control of their essential ideas and technology. Their matching of blockchain and cryptocurrencies with the challenges of legal and illegal cannabis markets seems a promising marriage.

Takeaway

It is a small startup in a high-potential field, with powerful technology. However, investing now requires accepting the volatility and risks of the cryptocurrency market. The alternative is to watch this new enterprise—far out on the technology curve in its field—and decide when it reaches the sweet spot for investment.   

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