"Forwarding Cannabis

Transcription

1 "Forwarding Cannabis

2 Page of Contents SEC 0 INTRODUCTION 03 SEC 1 MARKET 04 SEC 2 PROBLEMS 07 SEC 3 COMPANY 08 SEC 4 TOKEN SALE 12 SEC 5 ANDIA TOKEN WALLET 16 SEC 6 BLOCKCHAIN 18 SEC 7 REFERENCES 20 2

3 Introduction With over 40 countries that have approved some form (decriminalized, medical, or recreational) of Cannabis, there s been a massive adoption from the global market. In the U.S alone, where most of traction has been unprecedented, 29 states have legalized for medical purposes, and 8 of those have allowed recreational Cannabis. The global cannabis market is expected to reach a value of USD 31.4 billion by 2023, and a compound growth rate of 21.1 % between 2017 and [1] Despite the growth in the Cannabis market, both in medical and recreational, one of the main problems in the sale is compliance with local and state regulations. There is no platform that provides an infrastructure that is agile and transparent in the control of sales. Issues ranging from cash-only payments, operational difficulties, poor inventory management, reporting sales, failure to pay taxes, out-of-date or lack-of proper licensing, illegal sales, and businesses getting shut down by the government, among others are preventing this industry from growing at its peak potential. At Andia, we aim to harness such momentum and offer an ecosystem that allows enterprises to operate in a legal, agile, and compliant manner for both medical and recreational Cannabis. We are experiencing the next shift in industrialization, from a consumer-at-the-end pipeline to a decentralized interaction-enabled platform. At Andia, we aim to optimize on blockchain technology to build a transparent, secure, and compliant solution to solve the multilateral problems that the Cannabis industry faces. Our goal is to be provide a service that will prevent vendors from getting shutdown as well as allow them to rapidly respond to changes in regulation. With more aggressive governments making a stand, we believe that new compliance solutions are needed for a successful Cannabis enterprise to operate. The unparalleled growth rate that this industry is facing will require a new set of solutions, and Andia we hope to provide those. 3

4 MARKET SECTION 01 From the usage as an alternative to opioids, to simple recreational practices, Cannabis use has been penetrating all markets. Just in the last six months, medicinal and recreational laws have passed in Germany, South Africa, Argentina, Ireland, and Mexico that ratify the legalization of such products. The map in Figure 1 shows the countries (as of 2017) that have legalized or are in the process of legalizing Cannabis. Figure 1: World map of countries with legalization or in the process-of 4

5 MEDICAL The amount of countries that have legalized are growing, but just in the U.S. the medical Cannabis market was evaluated at USD 3.46 billion. The main uses for Cannabis include are pain control, arthritis, migraine, and cancer. Figure 2 shows the distribution of these uses. Figure 2: Market for Medical Application for Cannabis from (USD Billions) [1] PAIN CONTROL ARTHRITIS Pain control is presently the biggest market section for Medical Cannabis. Even throughout the year 2025, it will still dominate the Medical Cannabis market. Arthritis is the second largest, and heavily used by patients with antiinflamatory issues. MIGRAINE OTHERS Migraine is the third largest use for Medical Cannabis CANCER Others include, but not limited to are: Anxiety disorder, Stress, Asthma, epileptic seizures, Glaucoma, Dravet disorder, Alzheimer's, multiple sclerosis, hepatitis C effects, arthritis discomfort, Lupus Erythematosus, depression, and Attention Deficit Hyperactive Disorder Cancer is projected to outperform all other uses competing against pain management by [1] 5

6 RECREATIONAL Although medical marijuana has shown significant market growth, recreational is having an even larger impact. Of the 29 states that have legalized medical cannabis, 8 of those (recreational) own 30% of the total cannabis market growth. Figure 3 demonstrates the market cap of both recreation and medical. Figure 3: Market share of both recreational and medical Cannabis from (USD Billions) [2] Medical cannabis in the U.S owns 71% of the market share. By 2025, recreational will be in par with medical. Figure 4 shows a pie char of the current vs future market segments for medical and recreational $6.6 Billion 2025 $24.1 Billion Medical Recreational Medical Recreational Figure 4: Present and future market segments of Cannabis [2] 6

7 PROBLEMS SECTION 02 Although there are many benefits to this ever-growing market, there are key problems that prevent it from taking off. POOR INVENTORY MANAGEMENT Inventory management is an issue for most dispensaries as lack of records can lead to wrong sales, mismatched tracking, and lack of inventory. These issues are due to lack of QA, bad packaging, employee burglary, and bad counts. REPORTING SALES The compliance requirements and reporting of sales vary by state and county. Having multiple dispensaries across county lines entails different requirements, and can become a scalability issue. FAILURE TO PAY TAXES It is estimated that only 25% of dispensaries are tax compliant with their local requirements. In states where Taxes are not paid in full, licenses are revoked or access to recreational sales are blocked. OUT OF DATE OR LACK OF PROPER LICENSES Requirements for recreational and medical are completely different. It is estimated that over 30% of dispensaries are operating without proper licensing and are subject to heavy fines and closure of operations. ILLEGAL SALES Sales become illegal when minors are involved, and lack of proper identity verification systems are in place. Most states require medical sales tracking, but lack recreational sales tracking which leads to looping. Looping is customer buying more than the legal amount (1 oz./day). 7

8 Low compliance scores haven been plaguing the industry putting enterprises at risk Among the rest of the problems that the Cannabis industry is facing, the one that most stands out is the low compliance course. The average compliance score for some states is grounds for getting shut down immediately. Figure 5 shows a diagram of the compliance course of some of the states that have legalized medical or recreational cannabis. Figure 5: Compliance scores for some states in the U.S [2] : Good Compliance, Low closure risk 81-90: Average Compliance, Low to medium closure risk 71-80: Poor Compliance, High Closure Risk Below 71: Immediate Closure Risk 8

9 COMPANY SECTION 03 Andia is one of the first platforms that harnesses blockchain technology to enable the compliance and sell of Cannabis-based products. With government going after enterprises for being non-compliant, a solution that works of blockchain is imperative to the success and growth of the Cannabis market. By providing an open market ecosystem that is customer-focused, we facilitate the purchase and sell of Cannabis-based products for both consumers and producers. Using image recognition software, as well as our propetary currency that is optimized, we can transparently track all transactions from every customer. Enterprises will be able to easily track sales and prevent looping from happening. Figure 5 better explains the userjourney of how Andia works and how Cannabis is acquired. Our mission is to keep enterprises from getting persecuted and the possible closure, causing millions of losses. Our core value lies in our smart contracts that block any transaction on our POS, if there is a violation with local laws. Since all the data is on our blockchain, enterprise managers will be able to see all transactions in real time. Managers will be able to respond quickly to any issues at the dispensary. Not only will we guarantee a better journey for our customers but we will also provide a safe, compliant, and legal framework for them though our smart contracts. Figure 6: Andia user journey User Journey User Journey 1. Verification 2. Verify Biometric and identity (government ID, only the first time) 3. Buy-in Dispensary 4. Smart Contract Created All transactions are added and recorded on the blockchain via our smart contracts 9

10 Motivation Why Blockchain and Why online? Because of the nature of a distributed system, we believe that such architecture guarantees a secure, transparent, and unbiased solution to the sale of Cannabis products. The benefits of having a decentralized ledger include faster delivery, enhanced trust, lower cost per transaction, better customer experience and improved bottom line. One of the most important features of blockchain is the ability to only append information, and not erase data added. This guarantees that all enterprises that use the database have the exact same copy of the ledger. All transactions are recorded immutably on a distributed Ledger providing a comprehensive, secure, precise, irreversible, and permanent financial audit trail. Keeping up with an everchanging environment can be difficult and costly for Cannabis enterprises, and consolidating data from various systems can be both time-consuming and fractured. Regulations are constantly changing, and blockchain would improve their ability to resolve compliance issues, react to new regulatory and compliance obligations, and handle internal audit requirements all in the same platform. Also, both government and providers will share the same exact data, reducing the need for reconciliation Figure 5: Online multi-network intergration PULL FACILITATE MATCH Bring providers by providing a secure, Provide a compliant, legal, and Align producer with local safe, and encrypted platform Bring regulators in by having a state, national, and international patient base trustworthy framework for providers when onboarding Provide a channel for regulators to automatically supervise and state governments for compliance Align regulators with producers when compliance 10 dispensaries requirements are due

11 Goals and Development Phases What are our goals for 2018 (short run)? How are we going to release the product? Q1 Impement Enterprise wallets Biometric Identity implementation Pilot with dispensaries in Colorado Q2 Expand Team and open office in Colorado Pilot with Colorado States government Enter California Market Q3 Partner up with an exchange and get listed Open Wallet to users Implement payment system Q4 Enter Washington, Nevada, and Oregon Market Open Source Smart Contract Platform Enter Latin America Market (Uruguay and Colombia) PHASE 1 PHASE 2 PHASE 3 Compliance for recreational Identity Verification using Biometric Info Payments using Andia Token Release of wallets to customers/buyers Compliance for medical Electronic Prescriptions Online Doctor Consultation Medical Cannabis compliance Release of smartcontract creator Release of proprietary language Testing with E- commerce 11

12 Innovations and Implementations Our innavations BLOCKCHAIN We adopt blockchain as our core DNA, which enables better oversight of all transactions through a secure and transparent channel Real-time/ reporting supervision of platform Decentralized and autonomous Permanent financial trail HOMOPHORBIC ENCRYPTION We use Homomorphic encryption to carry out all transactions to protect user s data always. Better privacy and protection for patient s information Statistics and nonpersonal data will be used for reporting and compliance Only authorized users can see encrypted info SMART CONTRACTS Our decentralized platform allows us to offer a better plug-andplay environment for vendors and government Only allows transactions tha have been validated Makes it easy to automatically report sales Links with biometric info from customer to prevent looping 12

13 TOKEN SALE SECTION 04 Why are we launching a token sale? The time has come to push with a penetrating force, as we find ourselves at the vanguard of a unique opportunity in the market. At Andia, we believe in rewarding our first customers with a mutually beneficial model. Customers who buy our tokens will be guarantee early-access features as well as a discounted price when Andia goes live. This token sale will drive user engagement, promote our product, allow Andia to scale faster with a wider market reach, and most importantly reduce cost for customers and dispensaries. By promoting the sale of our token, it will allow us to create network effect around our product, as well as a vested interest by our users. Finally, our revolutionary model allows for a synergistic alliance that promotes the growth of both client-and-providers relationships. What are Smart Contracts? A Smart contract is a contractual agreement that is secure, decentralized, fraud-repellent, and transparent. Smart contracts are used in every transaction, which is registered in the Blockchain and it is executed automatically only if all conditions of the contract are met as shown in Figure 6. Andia token is optimized to get every feature out of Smart contracts; using them optimally to encrypt data, enable fast payments, record all transactions, leave an auditable fiscal trail, and enforce compliance. What are the benefits of Andia [AND]? AND is our token that will be the motor behind every transaction that goes through Andia. Patient/customer verification and onboarding on (encrypted) blockchain. Use of biometric fingerprint of customers to follow all transactions within network (customers and partners). Automatic encrypted tracking/reporting of all customer transactions Prevention of double selling or looping due to smart-contract enforcement Permanent financial audible trail in case of government auditing Automatic compliance to both local and state regulations. P2P payment system which does not use any bank infrastructure. The implementation of these features will allow customers to operate under a secure, fast, and safe platform. Figure 6: Blockchain contract where all conditions must be met for it to be executed. 13

14 Customer engagement via Andia Token There are three customers who plug-and-play within our platform. The first are enterprises that will use Andia in the storefront for tracking of transactions. Then there is customers/patients who eventually will be able to see their personal transactions via AND wallet. Finally, there is government regulators will use Andia to hold accountable and supervise enterprises. The binding element within all three customers will be Andia token, and here s how our customer engagement strategy will function. ENTERPRISES USERS/ CUSTOMERS Discounted price to dispensaries who buy more tokens at Pre-Sale a. 60% off Transaction fee will be dynamic a. The longer the HODL time, the less the transaction fee Usability and utility of tokens a. It is only through AND tokens that transactions will be tracked b. Any non-free services provided by Andia must be paid in AND token Reduce Transaction fees to those who buy using AND wallet Reduce Transaction fees for customer loyalty Use of AND token in e- commerce (3rd phase of development) GOVERNMENT ALL Daily reporting of Compliance reports (free) Immediate push notifications of possible double selling (free) Automatic sales reports tracking for Tax audits Analytics reports based on region, sales, compliance, and a. Must buy AND token to get this service Anyone (Enterprises, users, and govt) who buys the token, can sell them on an exchange. a. Can be exchanged for fiat or other crypto-currency Buybacks from Andia a. Andia will have by-yearly buybacks where those tokens that where bought from and only from Andia will be re-purchased b. No transactions are to be registered on the tokens to be sold to Andia in these buybacks 14

15 Token Sale Details of the sale of Andia token TOTAL COINS 200 million PRE-SELL 75% FASE 1-TOKEN SALE 50% The total number of tokens issued will be limited to a 200 million after the token sale. NO MORE TOKENS WILL BE CREATED AFTER. During the Pre-Sale 1 AND TOKEN will be equivalent to $0.12 USD (maximum 500,000 tokens will be available in this tier) with 75% discount During the TOKEN SALE 1 AND Token will be equivalent $0.35 USD (maximum 64.5 million tokens will be available in this tier) FASE 2- TOKEN SALE 30% During the FASE 1 tier 1 AND TOKEN will be equivalent to $0.50 USD (maximum 3.5 million tokens will be available in this tier) FRACTIONAL SHARES AND AND tokens are divisible, i.e. their number need not be an integer. Fractional shares are introduced for the convenience of working with AND. The smallest fraction is AND POST TOKEN SALE VALUE 1 AND/ $.50 USD After our token sale,1 AND token will start selling at $.50 USD 15

16 USE OF FUNDS Initial Capex Start & Run the Platform Marketing & Business Development Working Capital Buy Backs R&D Etherum and Open Source community 30% 25% 20% 10% 4% 1% Distribution of AND Tokens issued How will Andia tokens be distributed? 4% CANNABIS POLICY INSTITUTIONS 8% 40% TOKEN SALE MARKETING AND SALES 8.5% RESERVE 24.5% ADVISORS AND KEY PARTNERS 15% TEAM MEMBERS AND EMPLOYEES 16

17 Governance How will we handle the proceeds from the Token sale? Governance Responsibility to our customers is one of the key values of Andia token. That is why a strict legal and governance structure will be set up to ensure the use of proceeds from the Token sale in the best interests of the users. The wallet with the Token sale proceeds will be managed by a responsible Trustee with no cash outflows possible without the Trustee s approval. The Trustee will be managed by a decentralized Board of Directors. Road Map What does our roadmap look-like for the ICO? 2018 Q1/ Q2 January March April Project Idea Development Concept (started in November 2017) June Website launch Pre - Sell Main Token Sale Wallet Launch Listing on Poloniex Exchange Launch of Dispensary wallets to store accept and Tokens 17

18 Andia token Wallet SECTION 05 Wallet Andia token (AND) wallet is our own proprietary encrypted software program where Andia tokens are kept. Although they are stored in the user s wallet, they are not technically there. Rather, the wallet holds a private key (secret number) for every Andia token address that is saved in the Andia token wallet. Dispensaries will also be given a wallet to track sales, and enforce compliance via smart-contracts. When a new buyer is onboarded to a Andia, they will automatically receive a wallet. The wallet will in turn track all transactions for the customer, and will serve as a point of reference when these transactions are added to the blockchain. In phase 2 of development, the wallet will be opened to the customers so they can add credits (by buying Andia token) online. AND wallet makes it frictionless to send and receive Andia token between buyers and providers. Any transaction that is performed via Andia, automatically employs our wallet to move, exchange, sell, or trade Andia tokens as shown in Figure 8. NO CURRENCY OTHER THAN ANDIA TOKENS will be used in Andia. Figure 8: Process of exchange using Andia token wallet Core features of the wallet Use your tokens to trade in public altcoins exchanges Fund your wallet with a linked credit or debit card in real time, with our App Transfer funds to another wallet Automatically comply with regulations Track all sales and transactions Immediately turn token to fiat currency 18

19 Use Cases for Wallet (recreational) How do the different users interact with AND wallet? Customer Enterprise Token Buyer As soon a customer is onboarded, they are automatically assigned a wallet via Andia. To purchase any product, the customer must be onboarded and have a wallet assigned to them. The customer will be able to pay in cash or credit. The transaction is registered by cashier, and the address of the wallet is registered on the blockchain every time an operation is carried out. An enterprise is also given a wallet. Each employee is also assigned a wallet. This will make sure that the enterprise knows who s exactly at the counter. When a transaction comes in, and the fiat gets exchanged to Andia Token, it is stored on the enterprise s wallet. Enterprise owners have the right to automatically change the token back to fiat, or maintain the token in their wallet. Anyone who buys our token (enterprise, user, or govt) will be assigned an automatic wallet. This wallet will aid in the transaction of andia tokens, exchanges (fiat or other currency), access to features that Andia will provide on their platform, and benefits that were mentioned in Customer engagement via Andia Token section. Those buyers that more tokens than they need can exchange them, and the wallet will provide a safe avenue to sell. 19

20 Use Cases for Wallet (medical) How do the different users interact with AND wallet? Patients Doctors Producers Token Buyer As soon as the patient registers via Andia, they are given a wallet by which they can perform all their operations. Patient must use our wallet to buy any product via our platform. The address of the wallet is registered on the blockchain every time an operation is carried out. When doctors register via Andia, through there ID, a wallet is automatically generated. When doctors prescribe or give e-permits, they acquire a small commission of AND which will be shown in their wallet. This will incentivize doctors to use our platform to carry out future operations. Producers register via Andia, and a wallet is automatically generated. They will receive Andia tokens as soon as a patient buys their product. Also, they can convert Andia tokens to fiat (preferred currency). Anyone who buys our token (enterprise, user, or govt) will be assigned an automatic wallet. This wallet will aid in the transaction of andia tokens, exchanges (fiat or other currency), access to features that Andia will provide on their platform, and benefits that were mentioned in Customer engagement via Andia Token section. Those buyers that more tokens than they need can exchange them, and the wallet will provide a safe avenue to sell. 20

21 Blockchain SECTION 06 Power of Blockchain How will we include blockchain into our platform? Consumer Affiliation Using biometric information that is generated through our verification process, customers will be able to easily buy at any of our partner enterprises. Customers will be able to have stronger supervision of their transactions, as well as oversight of potential fraudulent use of their ID at retail stores. Government Compliance Government officials will be able to see all transactions out of each enterprise. They will be able to determine tax brackets, pay attention to those enterprises that are not reporting all sales, and act accordingly to those who might be carrying our suspicious activity. Enterprise Transparency Retail fronts will be able to have more control of customer sales. They can verify that a customer has not bought at any of Andia s partner enterprise s location. They can quickly respond to any changes in compliance regulation, and send out monthly reports to local and state government. We will generate private keys for both clients, providers, and regulators so only they can carry out transactions on our platform. 21

22 Smart Contracts How will our smart contracts work? Figure 9: Blockchain model for our smart contracts = Vendors Customer Product Andia Token *All our smart contracts, will follow the ERC20 standards. If new standards are approved by the Ethereum community in the future, such standards will be used. * Andia Token Smart Contract 22

23 REFERENCES SECTION 07 [1] Grand View Research; Medical Marijuana Market Analysis By Application, (Chronic Pain, Arthritis, Migraine, Cancer) By Country (U.S., Canada, France, Italy, Switzerland, Israel, Belgium, Croatia, Finland, Netherlands, Portugal, Czech Republic, Estonia), And Segment Forecasts, ; January 2017; Report ID: GVR [2] New Frontier Data; The Cannabis Industry Annual Report: 2017 Legal Marihuana Outlook: Executive Summary; March