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This is the fifth part of a five-part series dealing with the rescission by U.S. Attorney General Jeff Sessions of the Obama-era policy that discouraged federal prosecutors from bringing charges in all but the most serious marijuana cases.

This article focuses on the back-end leakage in the state’s obligation to control both the physical flows of legalized marijuana, as well as the related fiscal flows (the proceeds of legalized marijuana sales). These flows intersect dramatically in retail-level frauds.

There are very few new proposals on how to solve the physical flow problems with consumer re-sales into the black market. Traditional enforcement is universally applied. It is highly indirect. There is however, one high tech proposal is being advanced by 420 Blockchain.Based in Boca Raton, Florida, 420 Blockchain is beta-testing (in Rhode Island and California) a blockchain solution. It is based on Augusta High Tech’s Framework HyperLedger, running on the Google platform.

A second proposal follows the EU’s VATCoin proposals and suggests that States that have legalized marijuana could do the same with a limited purpose crypto-tax-currency. They would mandate the token would be the only currency allowed to be exchanged for marijuana. For example, in California this digital currency might be called CALCoin.

CALCoin lends itself naturally to blockchain. Each digital transfer of CALCoin would be recorded, registered with the California Treasury. The resulting distributive ledger will be a public, not a private blockchain (unlike the blockchain proposed in part 3 for the main commercial chain). The consensus mechanism for the CALCoin blockchain proposed for public ledgers by MIT Professor Silvio Micali (Algorand) seems ideal for the CALCoin application.

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