A company which develops medical marijuana products has seen its stock soar after announcing that it will begin using blockchain technology.
India Globalization Capital is a Maryland, USA-based company that deals in commodity trading, heavy construction equipment leasing, and real estate management. In 2013 it began developing cannabis-based pharmaceuticals. Its main product is Hyalolex, a treatment for secondary symptoms of Alzheimer’s disease. The treatment is to be released to the market in 2018, “subject to adequate funding”.
Medical marijuana is currently legal in 29 US states. According to a company press release, a study from the Journal of the American Medical Association showed that over 70% of cannabis products sold online are either over- or under-labelled. IGC plans to use blockchain technology to create a more transparent and reliable marketplace:
“We understand the unique challenges facing the cannabis industry and believe that our team has the expertise to be the first to create meaningful solutions to address these issues using distributed ledgers inherent in blockchain technology. As we work to develop blockchain in the rollout of Hyalolex, our goal would be to establish a universal cannabis platform applicable to solving multiple industry challenges facing dispensaries and consumers. This would include addressing issues such as transactional difficulties, inadequate product labeling, product identification assurance (PIA) and product origin assurance,” said CEO Ram Mukunda.
After announcing this news, its stock soared by 135%, according to marketwatch.
There are plenty of examples of companies seeing their stock rise after making such an announcement.
Just last week, a soft drink manufacturer called Long Island Iced Tea Corp. saw its shares rise by 289% after it changed its name to Long Blockchain Corp. In that particular case the change was purely cosmetic, as the company has no current agreements with any blockchain firm and does not guarantee that it will ever enter into one, according to a report in Bloomberg.
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