White Paper The first blockchain voucher for CBD utilising the power of Ethereum (ETH) - CBDoken
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White Paper The first blockchain voucher for CBD utilising the power of Ethereum (ETH). Early Draft Version 0.9 — Subject to Change Last Updated 01.08.2018
Abstract CBD Oil has been observed to deliver health benefits and is widely used in lifestyle and medicine. With the purchase, sale and possession of CBD legal in most countries, CBDoken finally solves the problem of: ● high pricing for CBD Oil; ● massive fluctuations in terms of quality; ● and premium CBD on demand - worldwide! With cryptocurrencies being extremely volatile with virtually no price stability and the existence of too many poorly conceived tokens with no actual product, CBDoken leverages the power of blockchain: Developed for the sale of a real physical product, CBDoken leverages distributed ledger technology to bring transparent, user-generated pricing on the Blockchain, such that one (CBDF) Token corresponds to an underlying voucher for a 10ml bottle of CBD Full Spectrum Oil. All physical assets are stored in dedicated vaults at our manufacture, storage and logistic center. They are audited for quantity, quality and the highest laboratory grade standards. Developed for implementation via Blockchain, (CBDF) forms a contract between CBDoken and token holders, the first CBD crypto voucher. This voucher is redeemable at CBDoken. This works by triggering a so called ‘Token-Burn’ on our website. As any other voucher, it is tradable on any open market, including crypto-exchanges. 1
To ensure that every consumer get the benefits of CBDokens community-defined pricing all products will be offered by CBDoken on a fiat-based webshop. The supply for the webshop is restocked from orders purchased via the same transparent blockchain. 2
Chapter I, Introduction 2 1.1 What is CBD? 2 1.1.1 Legal Status 3 1.2 About CBDoken 4 Asset Backed Coin 4 1 x CBDoken = 1 x CBD Retail Product 4 -60% Cheaper CBD 4 Chapter II, The Problem 5 2.1 Problem with Cryptocurrencies 5 2.2 Problem with CBD Trading 5 Chapter III, CBDoken 6 3.1 CBD Tokenization, Value of the CBDoken: Why Should You Invest 6 3.2 Asset Backed 6 3.2.1 Quality of Assets 6 3.2.2 Storage 7 3.2.3 Third Party Audited 7 3.3 Blockchain Technology 7 CBDoken Blockchain 9 3.4 Distribution of CBD 0 3.4.1 Claiming 10 3.4.2 Shipment & Delivery 12 3.5 Market Stability 12 3.5.1 Doken Reference Index (DRI) 13 3.5.2 Doken Factor 14 3.5.3 Euro Linked Index 14 3.6 Trading Volume 14 3.6.1 CBDoken Shop 15 Chapter IV, The Business Opportunity 16 4.1 CBD Market Place: Effective CBD trading 16 4.1.1 Value Proposition for Consumers 16 4.1.2 Value Proposition for Investors 17 4.2 Market Overview 18 Target Market 20 4.3 Challenges 20 4.3.1 The Objectives 20 4.3.2 Barriers to Entry 21 4.3.3 Threats 21 Chapter V, Full Spectrum Oil (CBDF) 22 5.1 What is a CBD Full Spectrum Oil? 22 5.2 Token Sale Process (CBDF) 23 5.3 Timeline (CBDF) 25 Chapter VI, The Roadmap 2018 - 2019 25 Chapter VII, About CBDoken 26 7.1 Background 26 7.1.1 The Team 26 7.1.2 Advisors 27 7.1.3 Corporate Structure and Key Information 27 7.2 Closing Words 28 3
Chapter I, Introduction 1.1 What is CBD? Until recently, the most well-known compound in cannabis was delta-9 tetrahydrocannabinol (THC). This is the most active ingredient in marijuana. The plant actually contains both THC and CBD, but the compounds have different effects. THC is well-known for the mind-altering "high" it produces when broken down by heat and introduced into the body, such as when smoking the plant or cooking it into foods. Unlike THC, CBD is not psychoactive. This means that it does not change the state of mind of the person who uses it. However, research indicates it does appear to produce significant changes in the body and has been found to have medical benefits. Chemical composition of Cannabinol (CBD, C 21H26O2) 4
As one of the many useful compounds in the marijuana plant, CBD has been used to treat ailments for millennia. However, the individual compounds in cannabis remained unidentified until Dr. Raphael Mechoulam revealed the structure of THC and CBD in the early 1960s. By the 1980s, medical researchers had began measuring the positive impact of CBD on pain along with the endocannabinoid system (ECS). Today, an increasing body of medical research supports the use of CBD for a variety of ailments including anxiety disorders, chronic pain, and neurodegenerative conditions. As a consequence, CBD market size has grown at an incredible rate in the last years. Financial and CBD industry experts believe it is only the beginning. Nowadays, it is the most widely available component of the hemp plant and is increasingly moving into the forefront of public interest and found wide recognition in medicine, lifestyle and pop-culture. Consumers no longer have to revert to smoking dried leaves mixed with tobacco or some other ineffective and potential harmful form of consumption, because a select few manufacturers are now using sophisticated equipment to produce CBD products in the form of wax, drops or oils of medical quality. 1.1.1 Legal Status Purchase, sale and possession of CBD Hemp Seed Oil, which is not considered as novel in food, is legal in most countries and available on prescription in many. Extracts of Canabis sativa L in which cannabidiol (CBD) levels are higher than the CBD levels in the source Canabis sativa L are novel in food. Cannabidiol (CBD) is one of the cannabinoids in Cannabis sativa plant. - E uropean Union 5
1.2 About CBDoken CBDoken is an innovative Company with unique features. It handles the sale of CBD Full Spectrum Oil and represents a voucher for a consumption-ready CBD Oil on the Blockchain, to make it’s purchasing and trading cheap, safe and transparent. Voucher Token (CBDF) are Token that are created for CBD Full Spectrum Oil. Each CBDoken represents a redeemable and tradable voucher for a bottle of 10ml 3% CBD Full Spectrum Oil. 1 x CBDoken = 1 x CBD Retail Product1 If there are 1 000 (CBDF) Token in circulation, there are 1 000 bottles of CBD Full Spectrum Oil in storage. You can redeem your product at any time through our website. -60% Cheaper CBD By cutting down the distribution chain and selling directly to the consumer, CBDoken is able to undercut the competition by a huge margin and reduce the purchasing price of finished CBD products for consumers and resellers up to a factor of three during the Token Sale to initiate a fairly priced market. 1 Varying on the final product - ml or gr 6
Chapter II, The Problem 2.1 Problem in crypto The whole crypto space is highly volatile. On any given day, it is common to see a volatility of 10-20% and there is virtually no price stability since there are too many poorly conceived Tokens with no actual product on the market. CBDoken solves this problem by creating a Voucher Token, bringing a real world usecase on the blockchain. 2.1 Problem in CBD trading A growing number of companies are now producing and moving CBD products around the globe. These cater not only to accelerating consumer demand but also account for medical cannabis derivatives for medical purposes and studies, with significant markets and producers in the Americas, Europe and Asia. However, the global trade of CBD Oil has been hampered by a lack of transparency, a missing market place and a coherent pricing model which lead to a distorted market and excessive consumer prices. This legal yet largely unregulated CBD market suffers from similar problems as the mostly forbidden cannabis (THC) market. Bad quality, poor supply and over-priced products are the result. ❖ QC/QA is difficult, which results in poor quality products ❖ it is difficult to divide truth and marketing, which results in scamming ❖ extraordinary pricing through too many intermediaries and ❖ Fragmented Global Delivery and Distribution for premium CBD Full Spectrum Oil 7
Chapter III, CBDoken 3.1 CBD Voucher Token, Value of the CBDoken: Why Should You Buy CBDoken creates Vouchers for a range of CBD products, offering a transparent and open community-defined pricing. As the market for CBD continues to develop so will the offered products. Subsequent Token sales provide interested individuals and customers the ability to purchase various CBD products at wholesale prices and claim or trade them digitally or in traditional retail. Thanks to streamlined value chain management excess costs are removed which otherwise burden the retail price and bottom line. 3.2 Voucher Assurance Every Token represents a voucher for a physically existing CBD product sitting in designated custodial storage. The provenance of the CBD product is audited and immutable. 3.2.1 Quality of Assets CBD-derived products vary widely in terms of quality and for many, quality assurance is challenging; CBD products were found not to contain CBD, or contaminated with pesticides and bacteria. Therefore, we work exclusively with our trusted partner Arge-Canna, who invented a ‘seal of approval’ for high quality CBD products under strict quality criteria, working hard to ensure our products remain free of pesticides, fertilisers and other impurities. Our CBD Oil is made from 100% naturally grown 8
hemp and constantly tested for purity and quality in redundant and independent dedicated laboratories. Check the QR on the bottle! 3.2.2 Storage CBD Products are stored in a secured and audited warehouse. Products can only be withdrawn with the notification for shipping by the burn contract automated process. Independent audits are carried out on a quarterly basis and published on our website to give our customers confidence that their assets are stored securely. CBDoken works with an existing distribution network. Different shipping options will be available depending on size. 3.2.3 Third Party Audited An established auditor provides quarterly audits of our inventory and quality commitment. To meet our high quality standards, we collaborate with the most qualified and,best-equipped analytical laboratories that test and monitor every stage of our production and the final product. All our products undergo continuous and rigorous quality assurance with verification as well as short – and long – term stability checks. This ensures the consistency of our products because we believe in transparency and publish all test results. 3.3 Blockchain Technology Relies on participating users to power the network by confirming transactions utilising a general consensus mechanism. The ‘blocks’ of information are transparently stored chronologically on every full node. 9
CBDokens are CBD (Cannabidiol) Vouchers on Ethereum. We leverage the Distributed Ledger for its immutability, transparency and auditability by applying it to physical assets currently lacking such digital representation. CBDoken Blockchain 10
Explication 1. Burns CBDoken against product claim 2. Sends ETH to purchase CBDoken Vouchers 3. Sends CBDoken once ETH has been received 4. Triggers withdrawal and shipping 5. Receives funds from token sale 6. Initiates and manages token sale 7. Produces CBD Oil for Voucher Tokens 8. Sends Quarterly Audit reports 9. Sends Shipping information and withdrawal amount 10. Stores CBD Products 11. Audits storage 12. Withdraws CBD Product from secure storage 13. Ships to Customer 3.4 Distribution of CBD Oil Investor CBDoken CBD Vendor ❖ Sends ETH to Smart ❖ Provides ❖ Receives % of ETH Contract Infrastructure sent to Smart ❖ Receives CBDF2 ❖ Receives % of ETH Contract Token sent to Smart Contract ❖ Handles Shipping ❖ Handles CBDF ❖ Warehouse and Distribution Storage ❖ Burns Token 2 * (= 1 Bottle of CBD Full Spectrum Oil)) to Wallet (e.g. myetherwallet.com) 11
3.4.1 Claiming The CBDoken Full Spectrum Oil can at any point be claimed, once it has matured, which happens after a set time following its Token sale. This process is called the Token Burn, an incredibly smart move that initiates the shipping of the underlying product. In the crypto world, there are a finite number of specific Tokens available; when a proportion of these are purchased by consumers and resellers, the total number of Token available on the market decreases and, as a consequence, the value of each individual Token may increase. Within CBDoken, however, the impact is limited or non-existent, as each Token is always a voucher for a real CBD product. If there are less Tokens, there is also less CBD Oil, the ratio stays the same and the value of the Token remains unaffected. The blow graph illustrates in detail how a Token holder can convert their digital Token into the underlying physical asset. 12
Explication 1. Send token to be burned 2. Fill out shipping information 3. Validates Information 4. Trigger withdrawal and shipping process 5. Transfers CBD product for shipping 13
3.4.2 Shipment & Delivery CBDoken shipment is handled by a third-party and uses a 1 Euro flat rate for packaging and shipments to all countries which are calculated and added at Checkout according to the address region and a small extra shipping fee. There is no minimum shipping amount. CBDoken will do it’s best to ensure the best and cheapest possible shipping, still due to the nature of the product and the diversity of customs regulations it can happen, that a package gets delayed or denied. In this cases we have a customer friendly process for information, but unfortunately we cannot guarantee delivery at this time in every place of the world. On dispatch you will receive your shipping code, please make sure to stay in contact with the shipping company for updates regarding your package. CBDoken cannot guarantee that the package will make it, and international ordering is done at the risk of the customer. All shipments are sent via DHL for International Shipping. Customers are responsible for checking their shipment for damage at time of delivery. Claims for product damaged during shipping must be made within 72 hours of receipt of package. 3.5 Activation of a Free Market Our company's goal is to create transparent pricing by leveraging blockchain technology for CBD Full Spectrum Oil. Therefore we plan to activate the market at the wholesale price and let the community set the future pricing of CBD oil. Tokens that are redeemed are replaced every first Monday of a month. Read more about the Free Market through the Blockchain on H ackernoon 14
3.5.3 Euro Linked Index Currently, due to the nature of business, stability and product we bind the Doken Market Analysis to Euro and the European Market realities. In the future, this can be changed to a more global reference. 3.6 Trading Volume To have a working market, a minimum of trading volume is necessary to avoid increased price volatility. Therefore CBDoken actively works with wholesalers, shops and customers to have a stable trading volume on the Market and it’s exchanges. This is achieved by actively participating in the market through the purchasing and sale of Tokens via our webshop platform as well as the distribution of additional Tokens and products. 3.6.1 CBDoken Shop An online shop will be set up by CBDoken to further simplify purchasing our CBD products. These products can be bought for the actual current trading price directly with traditional currencies such as EUR. This is done by purchasing CBDoken Voucher Tokens at market price. CBDoken will then burn these Tokens and trigger the claiming/shipping process. This has the positive side effect of contributing to the market dynamics on the exchanges. All burned Token will be reinstated at the beginning of each month, depending on market demand. 15
Chapter IV, The Business Opportunity 4.1:Digital CBD Oil distribution Status Quo ❖ Intransparent Market & High Prices ❖ Fragmented Distribution Network ❖ Lack of product quality Goals and Opportunities ❖ Create a Blockchain Voucher for CBD products ❖ Offer CBD Oil at significantly reduced prices to customers and investors ❖ Analysing the market to ensure a community-defined product pricing 4.1.1 Value Proposition for Consumers Currently, consumers of CBD Oil pay an incredibly high price with crazy profit margins for the resellers. By skipping a large part of the distribution chain and going directly to the customer, CBDoken is able to sell CBD at a price vastly below the retail market price. Typically what you can expect is that every product purchased via CBDoken would have costed at least three times as much if bought elsewhere. ❖ Hugely discounted prices up to 60% below market rate will have implications for the global prices of CBD Oil - ideally, CBDoken aims to lower the price for all CBD products. ❖ The transparent market for the purchase of CBD Oil removes many of the hurdles and variables when purchasing CBD products online. 16
❖ A guaranteed and continuously tested high quality provides consumer safety and allows for a more relaxing purchasing experience. ❖ Global shipment and delivery to wherever you are legally allowed to order CBD products further provides security and ease of mind. 4.1.2 Value Proposition for Reseller CBDoken allows holders to trade CBD product vouchers or to claim the underlying product and sell it in traditional retail. This will eliminate some of the inefficiencies of the current CBD market model. By reducing middlemen and eliminating costs for customers and resellers a user-defined pricing for each CBD product based on market analysis is provided. Every Token corresponds to an underlying CBD product, which means the voucher guarantees the buyer the ownership of a physical product without the need of storing or transporting the product itself. ❖ CBDoken offers resellers a digital, transferable and claimable CBD voucher token. ❖ Token Price is significantly below retail value, which allows to trade, transfer or resell the underlying product or the voucher itself ❖ Our CBD stockpile is audited on a regular basis by a renowned auditing firm, providing investors with the highest level of security and the knowledge that their digital assets have real world value. ❖ Through CBDoken’s global supplier network all Tokens can be exchanged to the underlying product at any time. ❖ Exchanged Tokens will be destroyed, making fraud exceedingly difficult. ❖ CBDoken takes active measurements to establish a fair market price 17
Secure ❖ All Tokens Stored on the Ethereum Blockchain ❖ Fully Audited CBD Storage Voucher Token ❖ corresponds to redeemable CBD Full Spectrum Oil ❖ Transparent Pricing ❖ Stable Supply Transferable ❖ Global Trading ❖ Fast Transactions ❖ No Intermediary 4.2 Market Overview The global CBD market is currently estimated at around 220 million USD. It is expected to grow by 700% to over 2.1 billion USD by the year 2020. CBDoken aims to capture a significant share of the entire consumer and small retail market by disrupting the existing production and distribution chain and selling CBD Products directly to the customer at a price that is about 80% below the competition. Using blockchain technology allows CBDoken to create a unique distribution that offers transparent, user-generated pricing. This allows every token holder to sell and trade his CBD-backed tokens, offering small retailers to sell CBD oil not only in store, but also on the blockchain. CBD products for CBDoken’s webshop are bought directly over the blockchain and sold at crypto-exchange price. 18
Source: Hemp Business Journal and Vote Hemp estimates ($ million, consumer sales) The use of CBD based products globally is increasing however determining exact figures is near impossible due to the fragmented nature of the market. This is where CBDoken aims to gain market share as we can facilitate the trading of CBD oil through the Tokenization process. Through enabling the trading on crypto exchanges a true market price will be determined. This digitization process allows CBDoken to be traded without the need to physically move the underlying asset. 19
Source: Ackrell Capital estimates. See Chapter IV: U.S. Cannabis Market Estimates Target Market We have identified the following segments as the primary target market for our products and services: ● Crypto ● CBD Retailers ● Use Cases as a Investors ● Traders reliable currency ● CBD User 4.3 Challenges 4.3.1 The Objectives ● Create a global medium of distribution for CBD oil. ● Offer CBD oil at significantly reduced prices to our customers and investors. ● Increased transparency for suppliers, retailers, and end users by establishing a fair and global marketplace. 20
4.3.2 Barriers to Entry As a CBD and cryptocurrency company we face the following barriers of entry: ● High start-up costs. ● The need for high quality reliable suppliers of CBD. ● A shifting legal landscape for cannabis derived products. ● Brand recognition challenges. 4.3.3 Threats The main threats facing CBDoken are: ● CBD oil being banned in certain countries restricting the luristdictions CBD products can shipped to. ● Technology safety risks such as exploits pertaining to blockchain technology. ● CBD being regulated overly strict - e.g. as a medical substance and available by prescription only. 21
Chapter V, Full Spectrum Oil (CBDF) 5.1 What is a CBD Full Spectrum Oil? (CBDF)-Token are 100% backed by CBD Full Spectrum Oil. Full Spectrum Oil has been proved to be tremendously potent and effective due its wide variety of Cannabinoids. The oil is purified of waxes and pigments, contains more than 4% of natural cannabinoids with THC level below 0.10% and CBD concentration of 3%. Organic hemp material used for extraction is grown and cultivated without herbicides and pesticides within the European Union. Third-party testing of cannabinoid ratio, heavy metals, pesticides and microbiological contamination provided. Name CBDoken Full Spectrum Oil Type Hemp Seed Oil Symbol (CBDF) CBD > 3% Neutral Cannabinoids > 1% THC < 0.1% 22
Price / Gram incl. Taxes Average Retail Price 28.00 € CBDoken Exclusive Offer 12,50 € 5.2 Token Sale Process (CBDF) Three Funding Rounds, each Distribution Round lasts one month. Token left will be distributed in continuing Distribution-Rounds. Our first Token Sale is backed by CBD Full Spectrum Oil with a total Token-Value around 10.5 Million Euros. Forthcoming Distribution Rounds will be released after Portfolio-Increase at Token Market Price. Private Sale Pre-Token Sale Token Sale Token Supply 15.000 CBDF 235.000 CBDF 500.000 CBDF Token Price: 12.50€ 13.50€ 15.00€ Release Date June - August 2018 September 2018 Oct. - Nov. 2018 23
5.3 Timeline (CBDF) 24
Chapter VII, About CBDoken 7.1 Background 7.1.1 The Team The CBDoken team first took hold when Alex Lacina, who spent the past couple of years working in the cannabis business, as instance as executive assistant with the Bushplanet leadership team - one of Europe’s largest legal hemp related companies - and witnessed first hand the inefficiencies of the global CBD trade, the difficulties in quality control and lack of transparent pricing. Furthermore, Alex has a deep and emotional personal connection to the topic following his mom’s terminal cancer prognosis five years ago and her CBD-based therapy, which helped her tremendously but cut deep into her pockets. Following this realisation, he approached his former classmate Leo, whose background as a serial entrepreneur made him uniquely qualified to turn this idea into reality. With the help of our founding partners, Christoph, who has himself built multiple successful companies and is now overseeing most of the day to day operations, Florian, whose background in blockchain applications and finance and Alex, a legal expert, this project became increasingly tangible. Karina Streng, a serial-entrepreneur by her own, and Mel Merio, a popular austrian TV-Host, DJane and CBD-Ambassador, joined CBDoken to push our marketing to the limit! 25
Alexander Lacina Leo Razumovsky, MBA Co-Founder & Chairman Co-Founder & Board Member › Prior Executive Assistant at Bushplanet › Deployment Strategist at Palantir Technologies › Cannabis Industry Expert › Co-Founder and former COO at Grape › Crypto-Enthusiast › MBA at University of Applied Sciences, Burgenland Christoph Richter Florian Fuchs-Martschitz, BBA Founding Partner & CEO Founding Partner & CFO › Serial Entrepreneur & >10 Years of Product Development › Management Consulting Experience › Co-Founder of Zoomsquare › 5+ years Financial Industry Experience › Board Member at Startup Bus › Blockchain Enthusiast › Founding Partner at Intellyo › Crypto Investor 26
Mag. Alexander Rapatz, MBL Alexander Brovman Founding Partner & CLO CTO › Independent Advisor at European Commission › Global Head of DevOps and Principal Cloud Security › Legal & Compliance Officer Engineer at Solera Holdings › Business Angel › Formerly Automation and SDS Principal Engineer Erste Bank Group Blonde 2.0 PR › One of the world’s leading boutique tech PR firms › www.blonde20.com Stadler Voelkel Attorneys at Law Mel Merio › Start Ups & Cryptocurrencies › Several successful ICOs Influencer Manager › www.svlaw.at › TV Moderator › Music Producer › Artist Dmitry Piasecki Art Director › Brand & Interface Expert › 15+ years Art & Design Field Experience › dmitrypiasecki.com 27
7.1.2 Advisors Geistgrow, USA MyWish.io Advisor Smart Contract Development › Co-Founder of Humboldt Seed Organization › Decentralized Full-Cycle Platform › Worldwide Cannabis Seed Distribution › www.mywish.io Mag. Klaus Hübner Joscha Krauß, DE Advisor Advisor › Board Director at arge-canna.at › General Manager at MH Medical Hemp GmbH › Foremost expert in the field of CBD quality control › Active Worldwide in the Area of Medical Cannabis › Representation of Medical Users in Austria 7.1.3 Corporate Structure and Key Information CBDoken GmbH Contact Information Tuchlauben 7a T: +4312530025-308 Vienna, 1010 E: office@cbdoken.com Austria W: www.cbdoken.com FN 491418 z 7.2 Closing Words CBDoken is a technology company focused on bringing CBD Vouchers on the blockchain. Through issuing our own Crypto Voucher our customers can digitally buy and trade in a wide range of CBD based products such as full spectrum oil. The Token can be converted into the underlying physical product at any time and shipped globally. 28
This process enables a transparent and consolidated market-price for buying and trading CBD products with the peace of mind that the product underpinning each Token is stored safely and always available to the owner. We believe that through significantly increasing transparency in pricing across the industry, CBDoken has the potential to become the medium of distribution for the global CBD trade. In the coming years we expect to rapidly grow our product portfolio and market reach to cover an even wide range of the CBD market. Our target market covers crypto enthusiasts, CBD user, retailers and of course CBD producers. It is our goal to provide tangible benefits for each of our market segments and serve to facilitate the global CBD trade. This will be achieved through a solid technical blockchain implementation serving to create vouchers for different CBD Products as well as an ever expanding network of suppliers, consumers and resellers. With an experienced team of entrepreneurs, consultants, lawyers and marketing experts we believe we have all the necessary skills, the dedication and drive to successfully implement our vision for a CBD market that easily accessible, transparent and fair to all participants - ultimately driving down the cost for the only one who really matters, the customer. 29
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