Michael Rose is a consulting partner at Deloitte Canada
Try to visualize a Canadian cannabis producer standing at a whiteboard connecting the dots to link the genetic strains and chemical attributes of their cannabis product to targeted outcomes; the end result being a surefire way to attract new customers. A medicinal producer may look to prove that their specific cannabis product offers superior pain relief, or eases muscle spasms more effectively than a competitor. This linkage between targeted outcomes and the composition of a cannabis product is the basis for a producer’s intellectual property – and its continued success over its competitors.
Data and data science will be crucial to the innovation that will build these linkages in the cannabis industry. Analytics, artificial intelligence and machine learning will power the connection between cannabis’ genetic and chemical attributes, and targeted medicinal or recreational outcomes. The exploration of dosage and ingestion methods combined with thousands of chemical composition and genetic strain variations creates an Everest-sized mountain of data to analyze. Medical researchers will scrutinize this data as they assess the effectiveness of treatments and producers will examine the data as they design recreational products.
With global competitors bearing down on Canada’s leadership position in the cannabis industry, the sector must embrace homegrown technological advancements now to distance itself from the pack.
Canada is already considered a global leader in data analytics, artificial intelligence and machine learning. Building on the global leadership of AI and machine learning pioneers such as Yoshua Bengio and George Hinton, Toronto and Montreal have emerged as leading data hubs. Global behemoths Microsoft, Facebook, and Google have all established AI and machine learning research centres in Montreal.
Canada also has a head start to use its legalized cannabis industry as the laboratory to test new technologies to solve important industry challenges. Trusted and transparent cannabis supply chains are needed to drive effective regulation, secure the supply of cannabis used in medical research, and to provide an auditable record for instances where a recall is required. Without legitimacy and control of cannabis supply, innovation will be undermined or abandoned. And if innovation takes a back seat, so will Canada’s leadership in the cannabis industry.
Open data standards will be essential to effectively link multiple producers, processors, distributors, and retailers into seamless track and trace solutions. In order to contribute data to global supply chains, cannabis producers will require protection of their IP. New solutions are needed to solve these problems.
Blockchain-based solutions can be used to help solve cannabis’ supply chain challenges. While much of the blockchain buzz is focused on cryptocurrencies, blockchain technology is being used to develop enterprise solutions to solve legacy challenges in new ways. In a blockchain solution, supply chain data is stored on distributed databases, or ledgers, so that no one participant has control over the data. Sensitive chemical or genetic information can be masked to protect IP. The data is also unalterable – an important feature of blockchain for trust and transparency. Think of the supply chain data being stored in an impenetrable vault made of clear and unbreakable glass. Canada’s vibrant blockchain community has already developed new blockchain-based solutions to serve the track and trace needs of the industry.
Standardized supply chain solutions built on top of blockchain will allow the cannabis industry to solve this challenge once, instead of solving this challenge separately for regulators, retailers, and partners.
While the United States and China dominate lists of technology unicorns (privately held startups valued at more than $1-billion), Canada has proven many times over that it can incubate, grow, and export technology globally. OpenText, Shopify, Slack, and Kira Systems are but a few examples of Canadian companies at different stages of maturity that attracted capital, talent, and exported their technology to global customers. Canadian cannabis tech should follow this playbook.
Canada has the ingredients in place to continue to lead: globally respected university researchers, a dynamic ecosystem of data-focused startups, and a talented and well-trained work force that punches far above its weight. Training these sizeable assets in this space can make Canada the go-to provider of cannabis insight – a valuable position to hold in a technology enabled intellectual property industry.
Time is of the essence. Canada’s legalization advantage could wane. Other climates will prove less costly to cultivate flower. This country’s best chance to continue leading will be to develop and export cannabis solutions powered by Canada’s existing technology strengths.