Global Cannabis Listing Platform

[IMPACT] Please describe your proposed solution.

Aperon’s technology and approach to bulk wholesale trade is set to radically transform and disrupt the $80 Billion global cannabis and hemp industry while creating a broad, deep and unique data cache that will inform and influence the global cannabis industry (value, trade, what to plant, how to process, and when to sell.)

As explained above, this proposal seeks endorsement, funding, and collaboration from the Catalyst community to incorporate blockchain based technology into our existing, rapidly expanding, but still small enterprise. Centered around all aspects of the legal trade of cannabis and hemp materials, in American and International markets. Including supply chain services and the creation of Proof of Smoke® CNFT’s (More about this innovative use below!).

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Cannabis Industry and Overview

First, background about an industry many may not know. And the value Cardano technology can add via the Supply Chain. Typical recreational retail environment. This is the new normal.

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Cannabis - a growing global industry

From an illicit black market drug, to an industry and plant deemed essential during the recent pandemic. Cannabis has officially arrived and is the fastest growing industry since the dotcom era, and is now the 5th most valuable crop in America. While recreationally legal in a growing number of countries and US States, some of the most exciting parts of this plant are just now being researched and discovered. Not only have some studies shown how the plant can alleviate debilitation effects of epilepsy and side effects of cancer treatment, the over 100 cannabinoids are showing incredible promise and perhaps the ability to displace current pain relief pharmaceuticals.

Already in America, recreational use of cannabis is legal in 18 states. Medicinal use is legal in 26 states., 38 in total between Medical and Rec. The trend towards legalization under US Federal law is clear and seemingly inevitable.

Globally, the trend is growing momentum. The green wave is spreading around the world. Countries that have legalized medical use of cannabis include Argentina, Australia, Barbados, Brazil, Canada, Chile, Colombia, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, Ecuador, Finland, Germany, Greece, Ireland, Israel, Italy, Jamaica, Lebanon, Lithuania, Luxembourg, Malawi, Malta, the Netherlands, New Zealand, North Macedonia, Norway, Panama, Peru, Poland, Portugal, Rwanda, Saint Vincent and the Grenadines, San Marino, Sri Lanka, Switzerland, Thailand, the United Kingdom, Uruguay, Vanuatu, Zambia, and Zimbabwe.

Other Countries such as The Netherlands have decriminalized the use of cannabis.

A new report from the UN’s International Narcotics Control Board has revealed the UK is the world’s largest producer of legal cannabis for medical and scientific uses. Yet proper access to medical cannabis is still out of reach to many UK patients, campaigners say.

The report – that includes data from governments around the world – estimates that the UK produced 320 tonnes of legal cannabis in 2019 – more than triple the 2016 total of 95 tonnes, and accounting for 75% of the global total (468.3 tonnes).

Cannabis creates significant taxable revenue

“Legalizing marijuana is good for the economy. That's the takeaway from the California Department of Tax and Fee Administration's report in May that showed the state has taken in $294 million in cannabis tax revenue in the first quarter of 2022.

Last year in the US, sales of legal, recreational cannabis reached nearly $15 billion. That figure is on target to surpass $25 billion by 2025, according to Statista.“

Since recreational use was legalized in 2018, California has raked in nearly $4 billion from the excise, cultivation and sales tax on marijuana. The tax revenue is so flush that Gov. Gavin Newsom has proposed the elimination of the cultivation tax to make the industry more competitive and to stamp out the black market.“

Business Overview

Operating within the Aperon group of companies, Tamerlane is an experienced, well established leader in a small marketplace. We have been growing our market position steadily in Washington State over the past 7 years, as the regulatory environment slowly accepted cannabis as a legal, but controlled substance. More than 300 clients use our brokerage, marketplace and supply chain services. We have contracted with another member of our group, Big Tree, to grade 90% of the product we sell.

Our group has studied and is now ready to expand to three other states. After proving (to ourselves and customers) we can work efficiently and effectively in multiple markets, we will expand, one by one, to all states and countries which have already legalised the production and trade of cannabis.

Cardano has convinced us that blockchain technology for supply chain (Tamerlane), grading (Big Tree) and online listing service (Aperon) will help accomplish our goals.

Alignment with Cardano

Until we discovered the Cardano community, and learned about the technology, we were uncertain about the best choice of blockchain technology. And a bit slow to actually expand beyond our current market. Nor did we know where to look for a blockchain community that could accommodate our plans for growth.

Finding Cardano, we understood your blockchain business & development strategies are perfectly aligned with ours. The Aperon Group faces the same challenges that Cardano faces.

Scaling efficiently
Creating Trust in a trustless environment
Traceability
Transparency
Disintermediation (pushing decision-making out from the center into users’ control)
Expanding adoption.

Hence our choice of this technology as the future foundation of our business.

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Systems & Users

In this Funding Round we have identified four blockchain systems that can work together.

The Cannabis Listing Service is the big tent that brings producers and buyers together, meeting in a market environment that provides up to date information about different quality products and ever changing availability.
The BigTree grading system provides trust, a common language, immutable records and efficiency
The Supply Chain service enables product provenance, using the International Cannabis & Hemp Standards (ICHS) Certificate of Grade (CoG)
Including Proof of Smoke® CNFT’s.
Recognising the social aspects of recreational cannabis culture (a shared experience - who is enjoying what, enabling feedback)
Unique, designed and minted by the producer (optional) attached to each shipment (revealing product provenance)
Enabling small producers to connect directly to the consumer
Enabling consumers to share their experience with others
Enabling consumers to buy the same/similar experience again.

There are four types of actors in the ecosystem

Sellers (producers, i.e. growers, or extractors) of cannabis.
Mostly small / medium sized licensed companies growing and or extracting cannabis
domiciled in single states in the US (due to issues with federal regulation), Canada, Europe and a few other countries.
Buyers of cannabis. Wholesalers, distributors, and retail outlets. Large buyers (manufacturers, extractors, or processors) Buying bulk for processing into various different forms of THC (branded joints, oils/extracts, medicinals, edibles, supplements, etc.)
They are willing to pay for premium quality but they want to make sure they get what they asked for (Quality Verified). Avoid counterfeit / watered down product.
They also want to be rewarded for loyalty (discounts, exclusive events) and they want to record their own experience when consuming the product.
Independent Graders of cannabis. The ICHS / Big Tree Grading System creates business opportunities for independent graders using a standardized grading scheme to assign grades to individual cannabis material lots (+/- 5 to 50 pounds).
Membership in the CLS allows independent Graders to introduce their services to producers in their geographical area.
Independent Marketplaces and Brokers. Marketplaces like Tamerlane, would connect to the CLS via API, and pull the active listings where sellers have opted in to list on the Tamerlane Marketplace agreeing to specific listing fees. These listings would be active until sold or removed by seller. Other independent sales and sourcing agents (brokers or marketplaces) around the world can also provide their services to sellers by connecting to the CLS creating a truly global market and network.

User Stories

Licensed cannabis operators, producing cannabis, have inventory to sell, quantity and quality varying in time (daily/weekly/monthly).
Licensed cannabis/hemp operators become members of the CLS (after KYC)
a membership fee is one of the revenue earning mechanisms to make the CLS sustainable
listing fees for sale of non-cannabis products (equipment, even farms, seeds, etc) provide additional revenue
Members choose from options
Geographic markets
Wholesale (bulk), retail, spot, contract.
Listing product & availability only
quality verified (Intl Cannabis & Hemp Standards certification)
quality verified by other grading system
unverified quality
Listing product & availability + selling
selling directly to buyers via the member’s bespoke store front provided within the CLS
selling via a consolidated store outside of the CLS (Example: Tamerlane)
selling via their own website store (outside of CLS)
Members upload their inventory to the CLS using an upload tool.
Members regularly update the availability of product and quality manually or via API.
Members can subscribe to market pricing data feeds.
Authorized (KYC) Buyers (legal within their domicile) can post requests for quotations (open, geographically specific, type and grade specific)
Buyers can post feedback

System Design

All three user types use mobile and/or web apps to interact with the system.

Producers: record every lot with metadata (when produced, where produced, weight available for sale, etc.). They receive a transaction ID that uniquely identifies the lot. This ID can be turned into a QR code and printed on the packaging for consumers to scan as a Quality Verification.
Buyers: Use the transaction ID to look up producer & grader data.
Independent Graders: Attach a grade incl. metadata (details of grading, what grading system was used, who did the grading) to the lot and record it on the blockchain.
All the interactions are realized using Cardano native tokens.
Since administration of the system will be operated by APERON we can use simple scripts / minting policies.
But members will have complete control over their product postings. Aperon will be able to delete (but not modify) listings in case of expired membership or regulatory violations.
The following components are needed
Indexing service - provides info about the grades, lots & NFTs that have been recorded on the chain
Permissions service - manages permissions, who is allowed to enter data, etc.
Apps for the three user types will be web apps (including mobile versions for field grading.)

Listing and Tokenizing Services

Anyone can create an Agent Account (free feature)
The goal is to attract as many people to create an Agent account. Being an Agent allows them to test the system and browse existing public data.
Agents can create Private (unlisted) Product Sheets (free feature)
New Agents have the opportunity to test and see what their product would look like once listed. We provide:
an human-centric online form
a digital API template (REST+JSON) for integration and automation.
Listing types
Quality Verified Listings: Agents can utilize the Big Tree Grading service or other quality verification system to list their product
Unverified listings: Agents can list their products without quality verification, but the absence of quality verification will be seen by any viewers.
Aperon conducts due-diligence license check on new Agent Accounts to enable them to become members (for a $ fee)
Aperon validates an Agent’s license to enable the Agent’s ability to publish the Product Sheet on the Listing page.
Validated Agents (now Members) would generate a secret agent key, which Aperon would approve. This key can be used to:
certify and validate the Member’s profile accuracy
enable posting to the CLS without permission of a centralized authority (i.e. the CLS operator - Aperon).
Members use their Key to List their Products on the CLS
The Member Key binds their identity with the product listing. This alone should be a significant deterrent for any fraudulent or illicit activity.
Information posted by a member is under their control at all time in order to build trust, promoting adoption of the CLS network.
Aperon can not post or modify information published by a Member.
Aperon can only delete posted information to comply with regulatory requirements or expired membership.
Optional Tokenized Quality Verified Product Sheets
Cardano Native Tokens (CNFT’s) verify the authenticity of the ICHS certificate for the product listed
Use of the ICHS certificate is at the Member’s option
Members are able to “export” ICHS certificates as a Cardano Native Token (CNFT represented by a QR code) on websites or collaborating blockchains (a technology dependent feature).

Tamerlane as a Marketplace Option

On the highest level, CLS is NOT a marketplace where buyers and sellers transact. It is a meeting place between global sellers and buyers. To sell, members have options:

link product listings for sale on Tamerlane marketplace
link product listings on another 3rd party marketplace
link product listings to a bespoke store within the CLS
link product listing to their own website / store.

[IMPACT] Please describe how your proposed solution will address the Challenge that you have submitted it in.

The challenge establishes the need for proposals with these qualities.

“Cardano needs a thriving ecosystem of different Dapps, products and integrations for the community to use that increasingly become the better alternatives over current centralized providers.

The more interesting and useful the products and integrations are that can be built in the ecosystem the more reasons people have to interact with the Cardano blockchain that can help further drive more adoption, feedback, growth and even more innovations.“

It is doubtless that the Cannabis Listing Service and associated marketplace will be one of the most interesting and useful products for a broad range of age groups & particularly interesting to many Cardano and other cryptocurrency community members - globally!

[IMPACT] What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?

Cost overruns : A risk that all projects face. In the case of Aperon group of companies, a well established, revenue generating company, we have the ability to supplement catalyst funding owing to cost overruns.

Technology complications : As of the time of submitting this proposal, the Cardano protocol is ready to launch a new version “Vasil” which seems to have all the features that are required for a listing service and simple market place. Contracting with highly experienced Haskell devs, experienced in Plutus, and past experience with stable coins and IOG suggests that unexpected technology complications can be resolved.

Unavailability of Key Persons : Any juristic person (registered company) faces the risk of losing a Key Person. In the case of Aperon, as the founder, the CEO is unlikely to leave. In the case of unexpected events, within the corporate realm, the company has a succession plan for key persons. In as much as blockchain development is contracted to an individual, system architecture and specifications will be the earliest deliverables. Allowing another dev to continue the work, in case of unavailability. Worst case would be delay in delivering while we found a suitably qualified replacement developer.

Market Uptake : Many Catalyst proposers are creating innovative, new products and services for which actual market demand has not been demonstrated. New systems always face the risk that market demand would not be as great as required to be sustainable. In the case of a commodity listing service, Aperon is developing the listing service in response to the demands of hundreds of customers built around our 7 years of experience in the legal cannabis market..

Inadequate Business experience : Many Catalyst proposers building new products and services within a technology ecosystem do not have business experience. Start-ups often find success depends on non-technical issues such as HR, marketing, accounting, regulatory compliance, banking relationships and others. With 25 years experience in the global commodities environments, Aperon’s systems, procedures, network of customers and service suppliers prepares us for expanding our business in this dimension

[FEASIBILITY] Please provide a detailed plan, including timeline and key milestones for delivering your proposal.

The overall CLS project is planned to be completed in 8 months after final funding decision (which for Fund 9 is scheduled to be Sept 2022).

Aperon Group will have three proposals underway at the same time (If all are funded).

Global Cannabis Listing Platform - <https://cardano.ideascale.com/c/idea/419950>

Grading App 4 Legal Cannabis & Hemp - <https://cardano.ideascale.com/c/idea/420210>

Supply Chain for Cannabis & Hemp <https://cardano.ideascale.com/c/idea/420833>

We will contract with two experienced development resources

Jann Muller - Developing all blockchain related technology

Veritca - An Aperon Group captive web developer will be responsible for all aspects of UI & Web2 customer facing websites & mobile apps.

We include the same basic plan in each proposal

There are six components to each of the three Aperon Group proposals submitted for funding by the community:

Work Items

The work on each of them can be broken down into several parts. All estimates of time define

Minimum time to complete (5% certainty)

Maximum Time to Complete (95% certainty)

1. Specification: Describing exactly what the service should do, how it will be used, and how it interacts with other services -

Estimate of Developers Time Required Min 3 days / Max 6 days

With Coordination (Review and Approve and Rework) Min 5 days / Max 10 days

2. Writing on-chain code: Building the Plutus smart contracts that govern the creation of tokens, recording of data on-chain, etc.

Estimate of Developers Time Required Min 1 days / Max 3 days