IBM Corp. is urging the B.C. government to use blockchain to track marijuana sales throughout the entire supply chain once recreational cannabis is legal next year.

The U.S. technology giant said blockchain could help the government limit or eliminate black market sales by tracking where and how cannabis is sourced, sold and priced, from seed to sale.

IBM (IBM.N) made these comments in its submission as part of the B.C. government's public consultation on cannabis regulation, ahead of Ottawa's July 2018 deadline to make recreational marijuana legal.

"Blockchain is an ideal mechanism in which B.C. can transparently capture the history of cannabis through the entire supply chain, ultimately ensuring consumer safety while exerting regulatory control," IBM said in the Nov. 1 document, posted on the provincial government's website.

The B.C. government solicited input from various stakeholders as it prepares to lay out its plan for how recreational marijuana will be handled in the province. Ontario was the first province to announce its detailed marijuana plan in October, which includes the sale of the drug in up to 150 stores run by the Liquor Control Board of Ontario.

Meanwhile, IBM has invested heavily in blockchain, a technology which creates a shared digital ledger where records or transactions can be tracked and shared in real time, and in a secure and transparent manner. The technology, which powers cryptocurrencies such as Bitcoin and Ethereum, is akin to a global bulletin board.

The U.S. company said in its three-page submission to the  B.C. government that blockchain could be used to track supply and demand, and manage inventory. It will also be easier in a blockchain-powered system to control quality and track down the source of poor-quality product, IBM added.

"This type of transparency would bring a new level of visibility and control to the provincial regulators and provide assurance to the multitude of cautious stakeholders regarding the way the management of a cannabis supply chain is rolled out within British Columbia," IBM said.