Two years after the Australian government loosened controls on medicinal cannabis to improve access to the drug, an Australian-listed blockchain innovator will use the technology to lock down the supply chain and guarantee the drug’s provenance and packaging.

The partnership with Australian medicinal cannabis company CliniCann will use chemical tagging technology – pioneered by Israeli firm Security Matters and tied to a blockchain-based software-as-a-service (SaaS) offering – to track and guarantee the authenticity of secure packing for the drug as it proceeds through its supply chain.

CliniCann was formed from the amalgamation of AusCann Group, Zelda Therapeutics and CannPal Animal Therapeutics.

It is targeting medicinal cannabis opportunities in the UK, Australia, New Zealand, South Korea, Thailand, and South America – geographies where it has secured distribution rights from German producer HAPA Medical.

Demonstrable supply-chain integrity is key to building brand strength and trust in medicinal-cannabis producers, CliniCann chairman David Wheeler told Information Age.

The Security Matters technology “will provide customers and regulators with a degree of comfort that what we are attempting to do is something quite serious,” he said.

“The fact that we can deal not just with provenance, but with packaging and multiple aspects of the supply chain using the one technology, is particularly advantageous.”

“For various countries and regulators to accept the role of medicinal cannabis as a pharmaceutical product, these kinds of standards should be applied and hopefully will become commonplace.”

Australian health minister Greg Hunt asserted the importance of supply-chain integrity in February 2017, when legislative changes were announced to “provide an import process which will allow us to have an interim national supply” of cannabis for medical use.

The national stockpile of medicinal cannabis would be stored in a “strictly controlled, legally approved supply regime, and it would only be imported where the importer has been pre-approved and has met all of the legal and… medical requirements.”

CliniCann will use the Security Matters technology to track HAPA Medical’s products from production to distribution – allowing it to demonstrate that individual packages of product are authentic and haven’t been tampered with.

“Making sure this is being done properly is going to be important not just from a supply, distribution and marketing point of view,” Wheeler said, “but also to keep the whole thing working so regulators aren’t dealing with issues of poor product control, substitution, or a whole range of things that can potentially happen in these markets as they become more valuable.”

The non-repudiable nature of the blockchain record, used to track tagged stock and packaging that will be chemically tagged in multiple locations, will provide “a higher level of physical security, and protecting the supply chain with different layers,” Security Matters founder and CEO Haggai Alon said.

The Security Matters technology has rapidly gained attention within supply chain-heavy industries abroad and in Australia, Alon said, adding that “Australia didn’t only give us a house and a financial structure, but is becoming a real home for our brand.”

Security Matters listed on the ASX last October with an eye to capitalising the rollout of its blockchain-based technology into global supply chains of all types.

Its shares tripled within a fortnight of its listing, but are now trading relatively steady at a 50 percent premium to its original price.