Cannabis NFTs: What Are They & How Do You Collect Them?
Published on 4/28/22
NFTs have taken the world by storm. According to Coindesk, Jeffries investment bank forecast NFT market-cap at $35 billion for 2022 and over $80 billion by 2025. But what is an NFT? How do you get an NFT, and what do they have to do with cannabis? Knowing more about NFTs - specifically cannabis NFTs - could be a financial boom in the coming years. Keep reading if you want a full rundown of NFT explained and its connection with cannabis.
What Does NFT Mean?
NFTs can technically be anything digital (drawings, signatures, music, etc.); however, when you hear about NFTs, there's a good chance what's being discussed is digital art, unique 4x4 pictures of anything and everything that are bought, sold, and traded for cryptocurrency.
The NFT meaning stands for Non-fungible token. It all makes sense now, right? Okay, we know it doesn't, so let's break it down. Non-fungible means "unique" - it is something that cannot be replaced by something else. Traditional money - even cryptocurrencies like bitcoin - is fungible because it can be replaced. One dollar or one bitcoin can be replaced by another dollar or another bitcoin. NFTs are unique because there is only one copy of a single NFT - you will never see the same thing twice. When you purchase an NFT with a cryptocurrency, you own the original item with a built-in authentication code, meaning that each NFT has built-in proof of ownership.
When you sell an NFT, you are selling the original piece of digital art and all ownership rights to that unique item in return for cryptocurrency. Like all things, an NFTs value is based on supply and demand - digital art's value increases or decreases based on the demand. Because there are only a limited amount of unique NFTs, the values can quickly skyrocket, which is why they are becoming an increasingly popular investment option.
Please note that buying and selling cryptocurrency is considered a high-risk activity. Where's Weed is not providing financial advice in any capacity.
Which Cryptocurrencies Support NFTs
NFTs are part of the Ethereum blockchain. Again, let's break it down. Ethereum is a cryptocurrency, like Bitcoin, a digital asset created via computing software that allows for secure trading and ownership through a technology called a blockchain. A blockchain is a tamper-resistant record of every transaction that occurs for a given digital asset. All Ethereum is created along a shared blockchain so that all transactions of all Ethereum are securely recorded. NFTs are created upon the same blockchains as the cryptocurrencies they're traded for. Ethereum is the primary blockchain to support NFTs, although other blockchains support NFTs, such as Bitcoin, Tether, and Solana.
The question remains, "Where do you buy NFTs?" When you visit an NFT market, such as OpenSea, Solsea, or Magic Eden, you'll notice that the NFT art is only available using a specific cryptocurrency. OpenSea operates on the Ethereum blockchain, while Solsea and Magic Eden operate on the Solana blockchain. When you purchase an NFT, it can only be sold or traded on the same blockchain you purchased it with. So, you can't purchase an NFT with Ethereum and then sell it for Bitcoin. That being said, NFTs are taking the world by storm and some are worth as much as $91 million - there's a lot of incentive for other cryptocurrencies and their blockchain to develop NFT markets. If you invest in a cryptocurrency that doesn't currently have an open marketplace for NFTs, it's likely only a matter of time before something becomes available.
Cannabis Brands Already Developing NFTs
There are already a host of cannabis brands utilizing NFTs to their benefit. The most remarkable comes from the Crypto Cannabis Club (CCC), which recently, as of January 2022, launched its unique cannabis brand and loyalty program for owners of their NFTs. They are partnering with leading cannabis brands that include Highsman, Old Pal, Dr. Dabber, King Palm, Higher Standards, Vibe Papers, and Marley Naturals. The move has been made possible thanks to a partnership with CampNova, the leading direct-to-consumer cannabis platform on the market. The Crypto Cannabis Club NFTs are available on OpenSea and are traded in Ethereum. Other cannabis-related NFT collectibles on the market include:
While some of these NFT collections are beginning to develop real value, many cannabis companies don't see NFTs as revenue-generating assets. There are a lot of other reasons why NFTs and canna-business make sense.
How NFTs May Help the Cannabis Industry
The "low-hanging fruit" for cannabis businesses, as stated by Jeffrey Welsh in MJ Biz Daily, is to create memberships just like Crypto Cannabis Club is doing to connect digital assets to unique products and strains. Additionally, because blockchain technology can include a multitude of data, it is possible to take something like a certificate of analysis and code it into a blockchain to then sell a specific certificate as an NFT. So, if a consumer likes a strain of cannabis, they can look to purchase the digital certificate of analysis on that particular strain. Cannabusinesses can use this same model to code specific products or simply create an NFT for the brand to increase exposure to an entirely new set of potential customers.
Because NFTs and cryptocurrencies are not regulated in the same capacity as traditional currency, cannabusinesses are not barred from exchanging in cryptocurrency globally. This is a major benefit to NFTs as revenue builders. Beyond that, however, NFTs also provide brand exposure, cross-fertilization of products, and bring consumer confidence to a specific brand, making it more socially and fiscally viable. With NFTs continuing to blow up, estimated to have a global market value of over $40 billion in 2021, there is seemingly limitless potential for cannabis to make space for itself in this highly profitable space.
Do you collect cannabis NFTs (or any NFTs)? Let us know which NFTs you prefer, where you buy them, and what the experience has been like. Comment below!