With compliance and security concerns specific to the cannabis industry, artificial intelligence may be the key to improved cybersecurity strategies.

In the modern era, each industry seems to grow with the technology that supports it. Looking to the cannabis business of today, it’s amazing to see how sophisticated and modernized this once grassroots and obscure industry has become. To this end, the cannabis industry of 2019 is beginning to mirror more mainstream businesses, as well as share in the technological advancements that support them. Of the novel technologies being entertained in the cannabis space, artificial intelligence shows some promising potential on the cybersecurity front.   

In any U.S. state with a legal cannabis market, compliance and security are some of the most integral features of successful business operations. In fact, if one is even interested in pursuing a cannabis business license in a state like Colorado, they must have functional security and compliance measures already in place. This is important because many of these measures – such as seed-to-sale tracking – are entirely dependent on technology. Therefore, the same digital platforms that make cannabis businesses compliant can also make them vulnerable to the downfalls of said supporting tech. Of these challenges, cyberattacks have raised concerns across the industry, especially with leading seed-to-sale tracking companies like MJ Freeway falling victim to such attacks.

Current forms of cybersecurity technology are only as effective as the tasks that they are programmed to complete. While computers are quite effective for such mundane tasks as cataloguing data, they lack effective decision-making capabilities. This is where AI really stands apart from more established forms of security technology. Through a process known as “machine learning,” some feel that AI can be beneficial to cybersecurity programs because it can “learn” to detect anomalies in cyber activity as they arise. For those who have suffered from cyberattacks, it is precisely these anomalies, or previously unknown hacking avenues, that manage to breach security protocols. To help detect these anomalies, and in a process akin to human rationality, machine learning allows computers to grow more intelligent by way of experience. This adaptive learning allows computers to make real-time decisions independent of human programmers, potentially preventing cyberattacks on the spot.

If one is to understand how AI could be beneficial in protecting cannabis businesses from cyberattacks, it is vital to understand what is at stake. In the society of today, knowledge is power. Looking to the business world, vital information on such things as consumer behavior and purchasing patterns can be the difference between success and failure. Concerning the cannabis space, intellectual property related to cultivation technique, business operations, and product development grows increasingly valuable with the advancement of the industry. Similarly, cannabis dispensaries are a storehouse for vital information on their customers, including data that is critical in identity theft. This information includes customer names, addresses, emails, phone numbers, and financial records.

Of the cybersecurity breaches seen in the cannabis industry, the MJ Freeway hacks are the most publicized. As an ROI-driven cannabis seed-to-sale tracking software company, MJ Freeway has access to a business’ most vital information, including operations statistics and consumer behavior. In both January and June 2017, the company experienced cyberattacks where both personal customer information and source code were taken. As the state-mandated, seed-to-sale tracking software for both Pennsylvania and Washington State, MJ Freeway put both businesses and consumers at risk when they were breached. The question now is, “What sort of steps could MJ Freeway have taken to prevent such incidents?” As the literal “gatekeepers” of the bulk of industry business intelligence, seed-to-sale companies like MJ Freeway, BioTrackTHC, and METRC are charged with staying ahead of the curve in cybersecurity.

There are a few ways that new advancements in AI technology can be applied to cybersecurity measures in the cannabis space, with the end goal of protecting both businesses and consumers. A Forbes article, titled “How Will Artificial Intelligence and Machine Learning Impact Cyber Security?” recently stated, “Organizations are already beginning to use AI to bolster cybersecurity and offer more protections against sophisticated hackers. AI helps by automating complex processes for detecting attacks and reacting to breaches.” Yet, this notion does not represent a wholesale departure from human intervention in cybersecurity scenarios. The article continues: “When you combine very smart security personnel with adaptive technology that continues to change and become smarter over time, this provides a competitive edge to defenders that have primarily been absent from most cybersecurity technologies to date.”

Therefore, the cybersecurity force of the future represents a blending of human ingenuity with machine learning, where both elements are on alert for anomalies that could lead to information breaches. Looking back to cannabis, whether these “defenders” will come in the way of large database companies like MJ Freeway, or smaller individual producers like dispensaries or grow operations, remains to be seen.

In a somewhat ironic twist of fate, it is by becoming more adaptable like human beings that AI is becoming relevant in cybersecurity. This idea stands in stark contradiction to the mechanistic analyzation that is accepted in cybersecurity measures today. Whether in the cannabis industry or beyond, cybersecurity experts, according to DOPE Magazine, recommend that businesses always remain on the cutting-edge of technology. For many, this dedication to innovation is the only surefire way to stay ahead of malicious interests and protect vital information. As the cannabis business continues to grow and mature, AI will inevitably become a part of cybersecurity protocol, just as it has in other industries. Looking at both compliance and security, perhaps AI is the missing piece that streamlines operations in an adaptive and practical fashion.

For all cannabis legalization’s progress, and all the excitement drug-policy reform and a booming CBD and cannabis market make, much of the United States remains outwardly hostile to marijuana — in some cases, outwardly so.

Against this backdrop, a few states stand out for soldiering on with the drug war.

In Mississippi, where CBD oil was legal even prior to the Farm Bill-sparked CBD craze, an Oregon man was sentenced to 12 years in prison for simple possession — a draconian punishment that was, in fact, a re-negotiated sentence that was meant to be kind. And in Oklahoma, which may be the most marijuana entrepreneur-friendly state in the country, a shipment of what was supposedly hemp was seized by authorities, who as of earlier this month remained hellbent on proving that what Mitch McConnell said was a legal commodity is grounds for imprisonment. With some notable exceptions, the entire American South has been a last bastion of cannabis prohibition and the drug war status quo.

But these are not the worst offenders. These are not quite as bad as Idaho, Nebraska, and South Dakota. In these three states, there is no medical marijuana access of any kind. Outliers, last redoubts of a failed idea, clinging desperately to a lost cause, these are the only three states in the Union with no cannabis reform laws on the books at all, according to NORML.

What “progress” there is here borders on an ironic joke. About the best there is to report from any of these legal cannabis-free zones is what the. Marijuana Policy Project called the “most restrictive and limited of any state law that acknowledges some form of cannabis’s medical value.” A 2017 law that says South Dakota residents can access CBD-only oil, but only if and when CBD products receive official federal Food and Drug Administration approval, a process that is likely to take years.

The good news is that all three states allow for citizen-driven ballot initiatives. And activists in all three states are trying to put substantive medical cannabis measures on the 2020 ballot. But even if they succeed, access could be years away and, in the meantime, state residents must contend with some of the country’s strictest possession laws.

Idaho

Idaho is in the West, where legal cannabis made its first and most lasting stand. Idaho also abuts several legal states. Ad Idaho, stubborn and obstinate, refuses to play the game and, in fact, joins states like California and Colorado in openly flouting federal law, but in favor of making cannabis more illegal than even the Controlled Substances Act calls for.

Simple possession of 3 ounces or less is a misdemeanor punishable by a $1,000 fine or a year in jail; more than 3 ounces is a felony. If you’re growing at home, as you can do across the border in Washington, you’re playing with a felony charge punishable by up to 15 years in prison, if authorities argue the cultivation is for sale.

Idaho is also where state police decided that the Farm Bill signed into law by Donald Trump last December doesn’t apply. Though federal law now says that cannabis sativa with 0.3 percent of less of THC is hemp and legal to possess, Idaho state law declares THC of any amount verboten and so hemp shipments here are subject to seizure, in open defiance of federal authorities who insist that hemp is OK.

After yet another session in the state Legislature ended with no reform, activists will try for the 2020 ballot. If they can collect 55,000 signatures from registered voters by the end of April 2020, voters will have the chance to bring the state “up to speed with states like Oklahoma, Arkansas, and West Virginia,” as campaign spokesman Bill Esbensen recently told reporters. That might not seem like much of a benchmark — West Virginia’s program is not yet operational and it took Arkansas, governed by a former DEA chief, several years to get a voter-approved measure off the ground — but deliberately comparing Idaho to other conservative states who are far ahead is a wise move.

Nebraska

Of the three medical-less states, Nebraska may offer the safest harbor, but lurking behind every slight crack in the prohibitionist facade is nuclear-level punishment.

The maximum penalty for possessing small amounts of cannabis is $300, though sales of “any amount” can be punished with a mandatory minimum of one year in prison. Possessing cannabis concentrates — like a vape-oil cartridge — can land you in state prison for five years.

That’s all bad. A bill that would legalize medical marijuana stalled out in the state Legislature earlier this year and during debate, a crowd of protesters assembled outside the state house to demand that prohibition be kept in place.

To understand why, perhaps it’s helpful to peek into some Nebraskans’ mindsets. Lincoln resident Margaret Wall described herself to Omaha.com as a “pot refugee,” who specifically moved to Nebraska because it was one of the Last Three states without any marijuana reform laws on the books — and that opposing even a limited medical-cannabis bill is necessary to keep the state from slipping towards legalization. Wall and all of her friends may have to repeat the performance next year if advocates are successful in putting a measure on the ballot.

South Dakota

This may be the final frontier for cannabis reform in America.

It wasn’t always this way: South Dakota actually decriminalized cannabis in 1977, but experienced a severe case of reformers’ remorse and “almost immediately” repealed the law, as the Marijuana Policy Project notes. But in the decades since, South Dakotans have consistently shown they’re not interested: medical-cannabis ballot initiatives were voted down in 2006 and 2010 by increasingly wide margins — the last effort lost by nearly two-to-one — and a proposed initiative last year did not qualify.

It seems likely that cannabis reform here may hinge on federal action in Congress, which shows you how entrenched prohibition remains in the minds and in the law books of a select few Americans.

North America’s legal cannabis industry could be worth more than $47.3 (€43.23~) billion annually by 2024.

The North American Cannabis Report finds that despite Canada becoming the first G7 country to legalise adult-use cannabis, US cannabis market growth will greatly exceed its North American neighbour. Currently the most profitable industry in the world, the US, is expected to enjoy triple-digit growth by 2024, despite not having legalised cannabis on a federal scale.

The cannabis market report, published by Prohibition Partners, includes detailed market value forecasts, regulatory timeline analysis, consumption data, healthcare analyses and commercial opportunities across North America.

The report

The report found that although the US is currently the most profitable cannabis industry in the world, the model is imperfect. The lack of legislative clarity at the federal level is disrupting a market that could be worth $44 (€40.20~) billion within the next five years

It also showed that in the US, medicinal cannabis is legal in 33 states, while adult-use cannabis is legal in 11 (and Washington DC). In the near-term, data suggests that value sales of medicinal cannabis will dwarf the recreational market, although this will fall to just over half of value sales by 2024.

Conflicting adult-use laws in the US are sending business out of state and regulators are keen to protect tax revenue are accelerating legislative change. As western countries experience a long-term decline in smoking and stagnation in alcohol consumption, big tobacco and drinks businesses are looking to boost growth by investing in the sector as exemplified by deals from Constellation Brands and Altria.

Other key findings in the cannabis market report showed that the North American cannabis consumer goods market is the most advanced in the world and 2019/20 will see an unprecedented expansion of CBD lifestyle products. Also, as European countries such as Luxembourg look set to legalise adult-use cannabis, North American brands are best-placed to take advantage of the potential of the untapped European market.

The cannabis market

Ahead of the launch of the report, Daragh Anglim, Managing Director at Prohibition Partners, said: “Although North America’s legal cannabis industry could be worth more than $47.3 billion within the next five years, the true value of the cannabis market is likely to be much larger than current estimates. This is because, contrary to the hopes of regulators, legalisation is unlikely to eradicate black market sales, particularly in Canada.

“In the US, the model is imperfect. The legal disconnect between federal and state, and between states themselves, presents significant challenges for businesses looking to mature a market with significant potential. Moreover, conflicting adult-use laws in the US are forcing businesses to move to neighbouring states. On a positive note this is fuelling momentum behind legislation as state regulators look to generate and protect tax revenues

“From an international perspective, in many ways the regulatory frameworks across Europe mirror the patchwork of legislation across the US. Europe, and indeed the world, will continue to monitor developments in North America closely”.

Russia and few countries like Canada are at loggerheads over the issue of cannabis and hold conflicting views on drug related legislation. As per the United Nations Office on Drugs and Crime’s (UNODC’s) World Drug Report 2019, Russia along with the US and China was one of the three countries that together accounted for 43% of injected drug use globally.