TRUSTT has secured €400,000 in pre-seed funding to finance its ambitious blockchain tracing platform, which it believes will allow it to become a leading voice in the regulation of the European cannabis market.
The young Polish startup, officially launched in November 2021, plans to introduce the blockchain tracing technology commonly used in the North American cannabis market across its rapidly expanding European counterpart.
According to Trustt the funding will allow it to complete its proprietary Trustt Trace platform and begin testing the technology with leading cultivators in the UK, Ireland, Malta, Poland, Denmark and Uganda in spring this year.
When it’s complete, Trustt says its ‘blockchain technology’ will track each individual step of a product’s lifecycle, from the cultivation of seeds to the packaging of the final product, producing a digital ledger consisting of hundreds of data points.
Compliant And Profitable
In the future, and with some collaboration with regulators, Trustt Co-Founder Mike Sikorski says this could not only allow producers to raise their prices, but could significantly shorten the compliance process helping reduce the time it takes for companies to bring products to market.
Mr Sikorski says completion of the platform will enable it to ‘realise our vision of making cannabis products safer to consumers while helping producers to stay compliant and more profitable.’
“If adopted, it would decrease cost and make compliance checks easy, which in effect would stimulate market growth and further increase consumer safety.”
Alongside its blockchain tech, Trustt is building its own standardised system of checks and balances, including lab testing methodologies, alongside its own B2B retail platform where the products which meet these specifications will be listed.
Blockchain Technology
Blockchain technology has come to prominence over the last decade in tandem with cryptocurrency, for which it is used to verify and secure digital transactions.
In a nutshell, it creates a digital ledger of a transaction or datapoint, copies this and distributes it to every computer in a given network. This creates an immutable digital signature that is unable to be tampered with or disguised.
While it has been an integral part of the meteoric rise of cryptocurrencies since it first started being used in 2009, blockchain’s ability to ensure immutable traceability has seen it adopted by a raft of industries including everything from healthcare to retail in recent years.
It is especially well suited to the cannabis industry, not only allowing medical professionals to be 100% sure of the specific strain they are prescribing, but also allowing customers to fully trace where their product has come from and what it contains.
This has seen blockchain used widely across North America’s more mature cannabis industry, but according to Mr Sikorski, not yet so widely in Europe.
“The idea of what we’re doing came to us, obviously, from North America and from solutions that are being used there.
“Looking at Europe, we were very surprised that there was none of those solutions here. It’s the first time ever I’ve seen almost zero transfer of technology between the regions.”
Mr Sikorski added that while his company was not ‘reinventing the wheel’ when it came to blockchain, there is an untapped potential to ‘optimise every aspect’ of the supply chain.
Furthermore he said that producers usings Trustt’s technology will be ‘able to increase the price per gramme achieved.’
“So that’s a very important part, we know from other industries, and from what happens in North America, that traced products can achieve up to 10-15% more per kg.”
Trustt’s Technology
The Trustt Trace platform will require producers at every level of the supply chain to record vital data points to a ‘distributed ledger’.
For example, the seed supplier will record the seed characteristics alongside certificates and compliance checks, then the cultivator will record everything from growth stages to pesticides and drying techniques used as well as their licences, certifications, laboratory tests, and so on…
In theory this entire ledger will be accessible via Trustt’s platform to both producers further down the supply chain and customers at the end of the product’s lifecycle.
Through a ‘close partnership’ with GS1, the international organization developing and maintaining standards for electronic barcodes, Trustt says the product’s entire life cycle will be accessible by scanning a QR code printed on the product.
In its preliminary ‘module’ focusing solely on the cultivation process,which will begin pilot testing in spring 2022 covering the cultivation process, Mr Sikorski says there could be more than 100 data points recorded in this step alone.
“Our developers are finalising the cultivation module at the moment, which has around 120 basic events. And this is without data points related to, for example, integration of IoT which also feeds in data to the systems like temperature and humidity which allow cultivators to maintain consistency yield to yield.”
The Costs Of Digital Tracing
While this sounds foolproof in theory, the costs associated with storing hundreds of data points for each individual product onto a blockchain soon stack up, potentially making these products very expensive.
Whenever a ‘transaction’ is made, such as adding a data point to the blockchain, a fee must be paid to process and validate it into the digital ecosystem, referred to as a ‘gas fee’.
To save on costs, Mr Sikorski says that ‘not all of the (data points) are saved within the blockchain’, but only ‘things which are important from the perspective of the quality and the safety of that product’, like lab tests, licences, certificates, seed and strains, alongside drying, storing and distribution conditions.
Trustt will also give producers using its technology the ability to control exactly what is visible in the blockchain, in an effort to protect ‘trade secrets’.
“Producers are able to keep those elements kind of private. This is also why we anonymize records before they are published by the producer.”
Trustt will also not be using a public blockchain, but rather a private blockchain, meaning the ‘cost of the technology shouldn’t be that high’.
This cost is being factored in as part of the price of using Trustt’s technology, and will reportedly not ‘impact the price that much for the user’, with costs comparable to similar solutions in North America.
“With the kind of average production size, we’re looking at probably between one to two cents average incremental cost per gramme.”
Main Image: L to R: Tomasz Rachwał and Mike Sikorski, founders of TRUSTT
