TOKES believes its blockchain-based digital token can derive value from cannabis’ banking problems, as well as the businesses it starts based on funds raised in an ‘initial coin offering’ – a new means by which funds are raised for a new crypto-asset venture. TOKES’ key initiatives include a transaction protocol, working with fiat currency exchange partners, mobile app development, non-profit work and a product line.
As a high-risk industry in the eyes of banks and regulators, it can be difficult for a business to get the proper banking partners needed to operate within the purview of the law. Some believe the popular cryptocurrency Bitcoin, created in 2008 by the pseudonymous figure(s) Satoshi Nakamoto, could solve the industry’s banking issues. Others believe an entirely new financial technology platform is needed, which meets the specific needs of a nascent and quasi-legal industry, such as cannabis.
“Many businesses are forced to operate in a gray area because of federal laws, despite states becoming more accepting of cannabis businesses,” says TOKES founder Michael Wagner. “Businesses are not able to take that cash and deposit it in a federally-insured bank account. Here in Las Vegas, dispensaries have bank vaults in their facilities where they are forced to store their assets.” TOKES identified this as a problem in need of a solution.
“All that cash is a security risk with added costs,” Mr. Wagner says. “They need to secure that cash. What we want to do is get that cash out of physical fiat and onto the blockchain where it can be more secure. And that will facilitate an easier transaction method where the point-of-sale system will be as simple as processing a QR code with your phone.”
TOKES is based on a new blockchain developer platform called ‘Waves’. According to the project’s website, Waves is “is a decentralized platform that allows any user to issue, transfer, swap and trade custom blockchain tokens on an integrated peer-to-peer exchange.” The Waves price at the time of writing, $4.89, is good for the fifteenth largest digital asset, according to industry website Coin Market Cap.
The platform aim to raise upwards of $5 million via an ICO to build a fully-licensed cannabis cultivation, production, and dispensary facility. “We plan to take a portion of the ICO proceeds to invest in a real-world, tangible cannabis operation in order to generate revenues and profits,” said Mr. Wagner. “We’ll utilize those profits to both grow our business and support our technology platform.”
TOKES is not the only platform trying to bridge the gap between digital currency and blockchain. Numerous projects have attempted similar. Some are approaching things from a financial technology perspective, like Tokken, Chex and Dopecoin and PotCoin. Still others, like the Medicine Man Club in San Diego, have combined the two for entertainment purposes.
Mr. Wagner adds: “A lot of the blockchain technology out there right now has no way of generating value for people investing, except for supply and demand. Other than that, there is no economic model that supports the technology and provides outside investors something unique and of value.”