Are You Aware of the Looping and Smurfing Schemes in the Cannabis Industry?

The cannabis market is notoriously under-regulated, making it difficult for some businesses to stay afloat. But there’s a new technology that has the potential to revolutionize the industry, and it’s so simple that anyone could use it: Blockchain. In short, Blockchain is a secure digital ledger of transactions. It records data in immutable blocks that are mutually verified and cryptographically sealed, with each block containing its hash (or fingerprint) to ensure the integrity of its contents. The Blockchain will detect and reject any changes made to a block (such as adding a new transaction). The open-source technology is a decentralized database that can track inventory, manage the supply chain and even verify provenance for products like cannabis.

Looping and Smurfing

One of the biggest problems with the cannabis market is that it often suffers from widespread illicit activity, including an array of practices known as “looping” and “smurfing.” Loopers work in groups to buy a large quantity of cheap cannabis, which they then re-sell at a high price. Their method is most effective in places where high prices are the norm, and there are no closely regulated markets where people can sell legal marijuana at a premium. Smurfing involves individuals purchasing frequent small amounts of cannabis, so they don’t have to pay the total price. Both methods allow users to avoid paying taxes on these transactions by claiming they were gifts or whatever else you want them to say.

The crackdown of profiles

The realities of cannabis prohibition make it challenging to regulate prices and prevent black market activity. Still, the industry can take some promising steps forward with the help of new technology. Blockchain can be the solution to looping and smurfing. People can use blockchain technology to create a decentralized network of cannabis users who are all registered on a single ledger.

It means that each time someone buys cannabis or another product from a seller like CannaLyft for marijuana, a unique log is created that tracks the transaction and is secured by transacting parties themselves rather than being managed by third-party record keepers. Using this method, a transaction can be notarized and placed on the Blockchain at any time, providing transparency and authenticity to anyone wanting to do business in the cannabis market. Simply put, blockchain technology can solve the biggest problems that exist in today’s cannabis industry: fraudulent transactions and unregulated markets.

How can Blockchain help

Smurfing is the process of buying small amounts of cannabis to avoid paying taxes and other fees. Of course, those caught smurfing will have to pay the total tax on all their purchases, so it may sound like an excellent way to get free cannabis. But it’s risky because most cannabis suppliers require payment upfront. There are many cases where people are ripped off when buying from an illegal trading platform or a weed dealer, sometimes getting a subpar pot and sometimes getting nothing. Once the Blockchain is established as the official ledger for buying and selling cannabis, there will be no more fear of being scammed by a dubious dealer.


Blockchain offers a way forward to solve the problems of the global cannabis industry by creating a safe and secure ecosystem that anyone can enter. An industry built on the Blockchain will create more jobs and generate government revenue. It will better ensure that medical patients get high-quality medications without having to deal with sketchy dealers.