Medgadget recently spoke with healthcare companies utilizing blockchains to manage storage, access, and sharing of data, as well as services related to data. However, some startups are finding ways to use blockchains for transactions related to physical products. By removing the middleman and directly connecting buyers and producers, such models aim to lower price volatility while guaranteeing product availability.
One startup using this approach is CBDoken, an Austrian-based business focused on disrupting the cannabidiol (CBD) market. Compounds extracted from the cannabis plant are known as cannabinoids. CBD is one such compound that is often added to oils in varying concentrations to produce CBD oil. Unlike other cannabis compounds, such as delta-9 tetrahydrocannabinol (THC), CBD is not psychoactive. However, some evidence suggests the compound does confer medical benefits, such as pain relief and anti-inflammation properties, help with smoking cessation, and improvement in neurological disorders. In the United States, state and federal regulations generally differentiate between marijuana and CBD oil, though variations exist between the states and laws related to marijuana and its components are changing rapidly. A couple months ago, the FDA approved the use of CBD for two types of epilepsies, though the announcement was clear to indicate that the FDA had not approved marijuana and all its components and that the approval was for a purified form of one CBD medication for a specific clinical use case.
CBDoken’s use of blockchain technology involves the creation of an ERC20 token. Each token is backed by a redeemable amount of CBD product and functions as a voucher for a buyer to receive the product from a producer. Initially, CBDoken vouchers will be tied to the company’s own product, CBD Full Spectrum Oil, though other CBD producers and their products will be “tokenized” down the road. CBD Full Spectrum Oil is, “an organic CBD Hemp Seed Oil with a natural level of legal cannabinoids (CBD, CBDa, CBG, CBDv, CBN, THCv)…healthy fatty acids (Omega 3, Omega 6), [and] Terpenes…” The company’s website also notes that, “Purchase, sale and possession of CBD Full Spectrum Hemp-Seed Oil up to 3% is legal in the US, EU, India, China and almost in whole South America.” Both tokens and CBD product are available today on the CBDoken website, though purchase of tokens is not yet available from the United States.
To learn more about CBDoken’s blockchain-based business model and CBD product, Medgadget heard from CBDoken Founder and Chairman Alexander Lacina.
Medgadget, Michael Batista: We’ve spoken with a number of healthcare-focused blockchain companies who sell access to services or data, but never a physical product, let alone one with as storied a history as cannabinoids. How did you get from hemp seed oil to blockchain technology and which came first, the product, or the interest in leveraging blockchain?
Alexander Lacina: As the former executive assistant of Bushplanet, one of the biggest wholesale and retailers in the European cannabis market, and a witness of its benefits for the human body and mind, I definitely go with the product first. Also, another personal connection with the product is my mother who was diagnosed with small-cell cancer about 8 years ago with a diagnosis of 3 months to live due to more than 11 metastases including 3 tumors in her brain. Today, she is cancer free and, in her case, I witnessed the effects of CBD to ease her pain even during chemotherapy.
All that said, blockchain technology enables transparent pricing, which is usually rare in gray-area markets. Supply and demand can be displayed on crypto-exchanges and allow us to link our product price with the community-driven exchange price.
Medgadget: If I understand correctly, the way CBDoken works is that anyone can buy a voucher token which can be exchanged for a CBD product. How do individuals purchase these voucher tokens and where do they exchange them for products?
Lacina: Correct. One one side we offer the crypto community a voucher token with an underlying product, on the other hand, we enable the exchange price to the public, which means that you can buy the product without the struggle of crypto directly in our webshop. We will buy back the token on the exchanges and resell the underlying product directly to consumers at the exchange price.
Medgadget: What can someone buy with a voucher token? Is it a form of payment? Can or will individuals be able to transact with other CBD manufactures or other CBD products?
Lacina: One token represents a 10ml bottle with 400mg cannabinoids (THC < 0.1) of hempseed oil blended with a full spectrum extract, made from organic and EU certified hemp. We plan to tokenize more CBD products, but we are starting with the most common one: CBD oil.
The tokens are not a form of payment. Imagine it like an ETF. We put our stock on the blockchain, enabling community-defined pricing. You decide what our product is worth and the pricing is transparent to everyone.
Medgadget: Is CBDoken’s voucher token sale different than an ICO? Is there a distinction between the voucher token and a token I might acquire through an ICO?
Lacina: This is an interesting question. Under European law, we are considered a digital voucher (token). In the US, we are working to get FinCEN approval since we should not be considered a security. Therefore we had to exclude US citizens from the token sale for now, but everyone is welcome to profit from community-driven pricing, which means that even individuals in the US can order CBD products if CBD is allowed where you are living.
Medgadget: What is the purpose of having the CBDoken voucher token listed on exchanges? Would individuals be able to transact their voucher tokens into other forms of cryptocurrency and vice versa? Which exchanges might we see CBDoken available on later this year?
Lacina: The purpose of a tradeable voucher token is public pricing on the exchange. Yes, people could switch from our asset-backed voucher to other cryptocurrencies, or move from volatile currencies into a more or less stable coin, since it is always linked with a real-world product. We cannot discuss our partners yet in public, but we are working on a listing with one of the top ten crypto exchanges with a daily trading volume above 500M.
Medgadget: Can you explain a little more about tokens on the exchange tie back to physical product and how CBDoken manages exchange volume?
Lacina: Let’s say CBDoken initially mints 386,000 tokens which are equal to 386,000 bottles of product in stock. Every time a bottle is sold, or a product gets claimed, a token gets burned. If we hit the exchange mid-September and theoretically sold 20,000 bottles of product, 366,000 unclaimed tokens are left. Those 20,000 bottles of product will be restocked and new tokens minted. Ultimately, all tokens on the exchange will initially be tied to our stock.
Medgadget: Why did you decide to use blockchain? Why not just sell CBDoken Full Spectrum Oil and other CBD manufacturer’s products directly?
Lacina: We believe in a transparent and fair-priced product. Wouldn’t it be great if you could order your bananas directly at the commodity exchange in Chicago for a nickel rather than to go to the grocery store and pay a lot more to cover their electricity bills and other costs? We use the blockchain to create a transparent price for CBD oil and hope to use this as a blueprint for future tokenization.
Medgadget: In terms of health applications, what are the benefits of CBDs and, more specifically, CBDoken’s Full Spectrum Oil?
Lacina: We are an Austrian company, and working within Austrian law, so we can not give any medical advice whatsoever. Our product is considered hemp oil with a natural level of cannabinoids, which is crucial in the EU. Most products sold right now are actually considered a “novel food.”
To answer your question maybe a little bit more precisely: the benefit of our products are wide-ranging. Athletes love its muscle relaxing and anti-catabolic effects, omega-3 fatty acids and other vitamins are good for skincare, e-sport gamers enjoy the focus they gain from the use of CBD. We’ve heard that women claim their cramps disappear within 20 minutes of applying the oil to a tampon (replace the oil infused-tampon with a regular one after 20 minutes). Vets are going crazy about the product because it seems to calm pets acting out due to fireworks or heavy storms. In general, I recommend everyone to look into the product, hemp, and its extracts and find their own truth.
Medgadget: I’ll may be trying out CBDoken’s product later this year for a review. What are some of the ways you’d recommend using CBDoken Full Spectrum Oil?
Lacina: I am 29, a male, and in good health. I use it for my daily diet. It gives me both focus and relaxation. Working 16 hours a day, feeling good and healthy is essential for me to perform at my best level. A personal tip, try CBD-infused pesto with linguine and shrimp or just a few drops in a fresh coconut.
Medgadget: Finally, what is the big picture? Where can CBDoken go from here after executing on the voucher token sale and exchange listing milestones planned for this year?
Lacina: Tokenizing all CBD and future legal cannabinoid products to enable fair, community-defined pricing for everyone.
Link: CBDoken website…