With laws at the state- and federal-level diverging concerning the legal status of cannabis, many have touted Bitcoin as a solution for cannabis dispensaries in the US. While there has been some progress with adoption, it has not proved itself as a savior for the cannabis industry yet.
However, a new crypto-asset looks to change that and seize the opportunity by providing a mechanism to bypass the regulatory and volatility restraints associated with cryptocurrencies that currently exist. Known as TOKES, the project is currently underway with an ICO to kickstart their multi-faceted business offering.
Not only are they addressing the banking problem experienced in the cannabis industry but also the value proposition that is seen as lacking from many ICOs. Not stopping at creating a token, app and dispensary and strain knowledge bank, collectively known as the TOKES Platform™, the team behind the project also have the ambition of setting up a Medical Marijuana Enterprise (MME); this will engage in cultivation, production and dispensary operations. Following the close of the ICO, the registration and licenses required will be sought after.
Moreover, the TOKES Platform™ is driven to provide a social benefit too. While the primary function is to provide a safe means of processing transaction, the non-profit section of the business will also lobby politically for the benefit of the industry, enhance the quality of products available by improving transparency, identify patient’s needs better and heighten the social acceptance of cannabis.
To find out more about this unique offering, BTCManager spoke to a former investment advisor and co-founder of TOKES, Michael Wagner.
- 1 How did Michael Wagner get into cryptocurrency?
- 2 Why did your project decide to not go down the avenue of Bitcoin?
- 3 So you are saying that Bitcoin is for a more general audience, while TOKES focuses the aim on an even smaller niche?
- 4 What value do you see in the WAVES blockchain? Why was it right for TOKES?
- 5 A dispensary could accept TOKES and cash out quickly if they needed supplies or pay wages with fiat, addressing the Bitcoin volatility/regulatory issue?
- 6 Some of the ICO funds may go towards establishing MME’s. Is this a way to kickstart the network effect?
- 7 In the TOKES white paper, the Founder’s Club is mentioned, can you tell me more about that?
- 8 The Founder’s Club requires an investment of 50,000 TOKES right? How will the accountability of the production process for cannabis work for the MME?
- 9 I am interested to hear about the inspiration for, and more about, the altruistic motivation behind the project? Does that stem from your outlook on life, philosophy of libertarianism?
- 10 In your white paper, the idea of a repurchasing scheme for TOKES is planned. How did you come to this idea?
- 11 Is it accurate to say that consumers will be using TOKES à la Uber and will get discounts and promotions as well as providing anonymity?
How did Michael Wagner get into cryptocurrency?
Through my friend, and fellow co-founder of TOKES, Gabriel Allred, currently who is currently undertaking a PhD in cognitive science. He started telling me about bitcoin mining a few years back. At this time, I had just left a position with an investment management firm and started schooling me on what Bitcoin was.
I was instantly intrigued and attempted to start a large-scale mining operation. But that did not go so well, so I turned my hand to investing in coins and running a small private fund. It just fascinates me how quickly the cryptocurrency space changes and adapts.
Why did your project decide to not go down the avenue of Bitcoin?
While Bitcoin is promising, the real challenge is that there are no bitcoin advocates altruistically pushing for its adoption with these business owners. A key component of our model is driving adoption through the currency. We can’t use bitcoin freely to expand our message and attempt to solve the fiat cash transaction problem dispensaries face. With TOKES we have a lot more leverage to support our project and aid adoption.
We are even going as far as providing hardware infrastructure for our partners at the commercial level. Building on that mission with asset-pegging and anonymity, we feel we have a significantly stronger offering than simple Bitcoin adoption.
So you are saying that Bitcoin is for a more general audience, while TOKES focuses the aim on an even smaller niche?
To a degree, yes. But I think, more importantly, there needs to be a value proposition for someone to encourage the use of bitcoin in place of a token like ours. We could push for these businesses to adopt bitcoin, but no one is doing that because there is no incentive for them to do so. We are providing a solution, in that by utilizing our technology they are incorporating it.
What value do you see in the WAVES blockchain? Why was it right for TOKES?
We selected the WAVES platform for asset issuance because they are planning on incorporating numerous cutting-edge features that you do not see in many other token creation chains. Notably, the fiat gateway mechanism that they are developing will be crucial for our commercial partners, as well as potential consumers for a ramp into/out of the digital currency space.
Businesses ultimately need to get that capital back into a more spendable format. WAVES can help facilitate that. While it may not be an issue in the future, it certainly is at present. Additionally, the WAVES team is well capitalized with strong developers on their team, so we feel the execution of the platform will be superior to alternatives.
A dispensary could accept TOKES and cash out quickly if they needed supplies or pay wages with fiat, addressing the Bitcoin volatility/regulatory issue?
Exactly. We are separately addressing volatility through our USD pegging mechanism which locks-in the value of a transaction for our merchant partners.
Some of the ICO funds may go towards establishing MME’s. Is this a way to kickstart the network effect?
It is not only a kick starter but in my opinion, it is one of the most innovative concepts to come out of crypto. When you consider the value proposition of most coins, they rely on the basic economic principles of demand and supply to drive returns. The more people adopting the technology, the more the coin is worth. But they have no real method of generating income for their project, outside of raising more funds.
We are building a tangible real-world business in addition to our technology stack, which will support the project overall and provide value to our investors.
In the TOKES white paper, the Founder’s Club is mentioned, can you tell me more about that?
We knew there would be large investors interested in our project and we just want a way to provide some extra value to them. Our initial rewards will be simple; t-shirts, stickers and the like. But later we want to be deeply involved in public awareness, conferences, and conventions and we will work to get those investors private invites and VIP access as an added benefit for giving us more support.
The Founder’s Club requires an investment of 50,000 TOKES right? How will the accountability of the production process for cannabis work for the MME?
Yes, 50,000 TOKES grants you access to the Founder’s Club.
The cannabis entity will be largely dependent on the amount of funding we receive. We are actually about to release an update to our funding goals, but for now, I’ll just say that we’ve met the minimum to continue with the project. However, a fully-fledged cannabis facility and grow operation would require upwards of $5 million, so we will be targeting strategic alliances and partnerships if we do not reach this target.
I am interested to hear about the inspiration for, and more about, the altruistic motivation behind the project? Does that stem from your outlook on life, philosophy of libertarianism?
We have been active proponents of the digital currency ecosystem since 2013 and identified some natural synergies between this industry and the rapidly-evolving cannabis industry. It is a well-known problem that dispensaries have problems with managing their proceeds due to the tenuous federal legality of the business. Given those security concerns, we saw a natural application of the blockchain. We’re enhancing that offer by allowing dispensaries to increase their footprint via our mobile wallet and dispensary locator. The development of a revenue generating business entity will solve a challenge many ICO’s face providing value for investors.
For our non-profit segment, we feel it’s important to give back to the community and help facilitate its growth. As for as cannabis goes, it is ridiculous that it has been illegal for so long, especially considering the medical benefits and has a lower harm potential than pretty much all legal drugs, e.g. alcohol.
In your white paper, the idea of a repurchasing scheme for TOKES is planned. How did you come to this idea?
In my experience, I have advised some of the wealthiest people in the US. Investors need to see a return. We were not able to do this via dividends because of the various SEC regulations. But it made me think of other avenues real business use to return value. Stock repurchases are common so I translated that to crypto and our model.
Is it accurate to say that consumers will be using TOKES à la Uber and will get discounts and promotions as well as providing anonymity?
The anonymity feature is a work in progress but the mobile app will facilitate transactions in TOKES. We’d like to launch with a giant promotion for merchant partners, we’re discussing giving them each a substantial stake in tokens to give out to customers who can then, in turn, use them to purchase something like one gram of cannabis.
It facilitates the adoption of the app and lets people know TOKES exists, plus, they get a free gram of ‘Mary Jane’ on us!
The TOKES ICO will end January 15, 2017, and all investors will receive an additional 1 percent of their investment in the form of Incent tokens. Interested investors can find out more about TOKES from their white paper, which can be found here.
DISCLAIMER: Always do your own research before investing in an ICO. We do not have any affiliations with TOKES and the article should not be taken as a green light to invest in the project.