The tech giant will work with a start-up called KIND Financial to create the service that will help to track the drug.
This is a milestone for the legal pot business, with Microsoft becoming the first company to look at the sale of the drug. Marijuana is still illegal; however in the US there are some states that have legalized it for medical use. In the UK there have been several campaigns to try and kick start the drug being made available for people who need it for health reasons.
Now with KIND's partnership, the software could make a huge difference in furthering the work to make the drug more available in different countries.
KIND is a California-based company and uses software called Agrisoft, which tracks the sale of weed, from the seed onwards. This ensures that the marijuana business stays in line with trade regulations.
For KIND, this partnership with Microsoft will help to develop the companies' resources and will enable each organization to utilize knowledge and expertise in their respective areas.
"The goal of this relationship is to leverage each company's resources to provide State, County, and Municipalities with purpose built solutions for track and trace ('seed to sale' in the cannabis industry) technology," KIND said in its statement.
The new government-facing software will use Azure, Microsoft's cloud business.
"The Microsoft Cloud for Government supports government missions to regulate and monitor controlled substances and items, from the Department of Justice regulating tobacco and firearms to a state regulating legal cannabis," a Microsoft spokesman told Business Insider.
"KIND Financial is building solutions on Microsoft's cloud platform to help government agencies act in their governmental capacity."
As the debate around legalization of the drug continues, it appears that using software such as this could help pave the way for further developments and also enable more countries to think about making the drug available for medical use.