<?xml version="1.0" encoding="us-ascii"?><InstanceReport xmlns:xsd="http://www.w3.org/2001/XMLSchema" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance"><Version>2.4.0.8</Version><ReportLongName>0010 - Disclosure - 4. DEVELOPMENT OF CHROMAID(TM) TECHNOLOGY</ReportLongName><DisplayLabelColumn>true</DisplayLabelColumn><ShowElementNames>false</ShowElementNames><RoundingOption /><HasEmbeddedReports>false</HasEmbeddedReports><Columns><Column FlagID="0"><Id>1</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><CurrencyCode /><FootnoteIndexer /><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios><MCU><KeyName /><CurrencySymbol /><contextRef><ContextID>From2012-10-01to2013-03-31</ContextID><EntitySchema>http://www.sec.gov/CIK</EntitySchema><EntityValue>0001074828</EntityValue><PeriodDisplayName /><PeriodType>duration</PeriodType><PeriodStartDate>2012-10-01T00:00:00</PeriodStartDate><PeriodEndDate>2013-03-31T00:00:00</PeriodEndDate><Segments /><Scenarios /></contextRef><UPS /><CurrencyCode /><OriginalCurrencyCode /></MCU><CurrencySymbol /><Labels><Label Key="CalendarSupplement" Id="0" Label="6 Months Ended" /><Label Key="Calendar" Id="1" Label="Mar. 31, 2013" /></Labels></Column></Columns><Rows><Row FlagID="0"><Id>1</Id><IsAbstractGroupTitle>true</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>1</Level><ElementName>VSUL_NotesToFinancialStatementsAbstract</ElementName><ElementPrefix>VSUL_</ElementPrefix><IsBaseElement>false</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText /><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>xbrli:stringItemType</ElementDataType><SimpleDataType>string</SimpleDataType><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Notes to Financial Statements</Label></Row><Row FlagID="0"><Id>2</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>2</Level><ElementName>us-gaap_InProcessResearchAndDevelopmentPolicy</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="From2012-10-01to2013-03-31" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0pt"&gt;&lt;/p&gt;

&lt;table cellspacing="0" cellpadding="0" style="font-size: 10pt; width: 100%"&gt;
&lt;tr style="vertical-align: top"&gt;
    &lt;td style="width: 8%; text-align: left; text-indent: 0pt"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;&lt;b&gt;4.&lt;/b&gt;&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 79%; text-align: left; padding-left: 36pt; text-indent: -36pt"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;&lt;b&gt;DEVELOPMENT
    OF CHROMAID&amp;#153; TECHNOLOGY&lt;/b&gt;&lt;/font&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;/table&gt;
&lt;p style="margin: 0"&gt;&lt;/p&gt;



&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0pt"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;&amp;#160;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;The
Company has developed a unique patented technology which directs structured light onto a physical substance to capture a ChromaID&amp;#153;
Profile. When matched against existing databases, the ChromaID Profile can be used to identify, detect, or diagnose markers invisible
to the human eye. ChromaID scanners can be integrated into a variety of mobile or fixed-mount form factors, making it possible
to effectively conduct analyses in the field that could only previously be performed by large and expensive lab-based tests.&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 12pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;&amp;#160;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;Visualant&amp;#146;s
ChromaID technology was developed over an eight-year period by Professor Tom Furness and Dr. Brian&amp;#160;Schowengerdt of RATLab
LLC under contract to Visualant. Visualant owns five relevant patents and a&amp;#160;&amp;#160;number of&amp;#160;&amp;#160;trademarks, for which
the Company has applied for registered trademark status in the United States and elsewhere. The technology is now being transferred
into products and a ScanHead module. Visualant has partnered with Sumitomo Precision Products to manufacture the ScanHead and
reduce the technology to a reliable and cost effective form. The first demonstration of this is the Cyclops6 ChromaID Scanner,
which was demonstrated at the Japanese Instrumentation Manufacturing Association trade show in Tokyo in October 2012. The Cyclops6
ChromaID Scanner can be used to evaluate the technology for flat surface applications and has sensitivity from 350nm to 1450nm.&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;&amp;#160;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;Visualant
is pursuing an aggressive patent strategy to expand our unique intellectual property in the United States and Japan. The following
patents have been issued to date:&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;&amp;#160;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;On
September 6, 2011, the Company announced that it was issued US Patent No. 7,996,173, entitled &amp;#147;Method, Apparatus and Article
to Facilitate Distributed Evaluation of Objects Using Electromagnetic Energy,&amp;#148; by the United States Office of Patents and
Trademarks.&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;&amp;#160;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;On
January 19, 2012, the Company announced that it was issued US Patent No. 8,081,304, entitled &amp;#147;Method, Apparatus and Article
to Facilitate Evaluation of Objects Using Electromagnetic Energy&amp;#148; by the United States Office of Patents and Trademarks.&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;&amp;#160;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;On
March 20, 2012, the Company announced that it was issued US Patent No. 8,076,630, entitled &amp;#147;System and Method of Evaluating
an Object Using Electromagnetic Energy&amp;#148; by the United States Office of Patents and Trademarks.&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;&amp;#160;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;On
November 1, 2012, the Company announced that it was issued US Patent No. 8,285,510 entitled &amp;#147;System and Method of Evaluating
an Object Using Electromagnetic Energy&amp;#148; by the United States Office of Patents and Trademarks.&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;&amp;#160;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;On
April 1, 2013, the Company announced that it was issued US Patent No. 8,368,878 B2 and is entitled &amp;#147;Method, Apparatus and
Article To Facilitate Evaluation of Object Using Electromagnetic Energy by the United States Office of Patents and Trademarks.&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;&amp;#160;&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;On
February 6, 2013, the Company&amp;#146;s ChromaID technology won the Green Photonics section of the 2013 Annual Prism Awards at SPIE
Photonics West 2013. The award honors solutions that generate or conserve energy, cut emissions, reduce pollution, and yield sustainable
outputs.&lt;/font&gt;&lt;/p&gt;

&lt;p style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"&gt;&lt;font style="font: 8pt Times New Roman, Times, Serif"&gt;&amp;#160;&lt;/font&gt;&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>Disclosure of accounting policy for costs assigned to identifiable tangible and intangible assets of an acquired entity to be used in the research and development activities of the combined enterprise. An entity also may disclose the appraisal method or significant assumptions used to value acquired research and development assets.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 235

 -SubTopic 10

 -Section 50

 -Paragraph 3

 -URI http://asc.fasb.org/extlink&amp;oid=6367646&amp;loc=d3e18780-107790



Reference 2: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 210

 -SubTopic 10

 -Section S99

 -Paragraph 1

 -Subparagraph (SX 210.5-02.15)

 -URI http://asc.fasb.org/extlink&amp;oid=6877327&amp;loc=d3e13212-122682



Reference 3: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 730

 -SubTopic 10

 -URI http://asc.fasb.org/subtopic&amp;trid=2127266



Reference 4: http://www.xbrl.org/2003/role/presentationRef

 -Publisher SEC

 -Name Regulation S-X (SX)

 -Number 210

 -Section 02

 -Paragraph 15

 -Article 5



Reference 5: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name FASB Interpretation (FIN)

 -Number 4

 -Paragraph 4, 5

 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009.  This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



</ElementReferences><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>4. DEVELOPMENT OF CHROMAID(TM) TECHNOLOGY</Label></Row></Rows><Footnotes /><IsEquityReport>false</IsEquityReport><ReportName>4. DEVELOPMENT OF CHROMAID(TM) TECHNOLOGY</ReportName><MonetaryRoundingLevel>UnKnown</MonetaryRoundingLevel><SharesRoundingLevel>UnKnown</SharesRoundingLevel><PerShareRoundingLevel>UnKnown</PerShareRoundingLevel><ExchangeRateRoundingLevel>UnKnown</ExchangeRateRoundingLevel><HasCustomUnits>true</HasCustomUnits><IsEmbedReport>false</IsEmbedReport><IsMultiCurrency>false</IsMultiCurrency><ReportType>Sheet</ReportType><RoleURI>http://visualant.net/role/DevelopmentOfChromaidtmTechnology</RoleURI><NumberOfCols>1</NumberOfCols><NumberOfRows>2</NumberOfRows></InstanceReport>
