NFTs in Cannabis

NFTs and digital currency are hot button topics in both the investing world and from tax collectors. What are NFTs, and what is their future potential in the cannabis industry?

NFTs and Crypto Defined

Before we jump into how NFTs might play a role in the future of cannabis, let’s first describe what they are. Put simply, an NFT is a “non-fungible token,'' which is a digital representation of exclusive collections or creations. NFTs can be sold for millions, or as little as $1. The value of NFTs is based entirely on the buyer/ seller relationship.

So, Are NFTs Like Crypto? Not Quite, But Close

Since its inception in 2009, cryptocurrency has captured the fascination of investors and consumers alike. These people are perhaps seeking digital alternatives to a currency like Federal Reserve Notes, also known as American dollars.

The first crypto coin was of course Bitcoin, created by an unknown person calling themselves Satoshi Nakamoto. Since then there have been dozens, perhaps hundreds of alt-coins developed, some successful, and many others unsuccessful.

The main thing crypto and NFTs have in common is that they exist on a decentralized platform that is based on what is called blockchain technology. The difference is that many crypto experts view digital currencies as actual currencies, instead of investments.

NFTs in Cannabis - More than A Transaction

Like their cousins in crypto, NFTs are digital assets that cannot be replicated easily. Each Bitcoin, Litecoin, Dogecoin, etc, has a unique group of randomly generated numbers and letters assigned to them, and the “blockchain figures their equations out,” to put things in layman's terms. On top of this, there must be a finite number of Bitcoins, so everything is traceable and not susceptible to government influence. This is, of course, according to crypto enthusiasts.

Similarly, a legitimate NFT should come with a Certificate of Authenticity, so its scarcity can be verified. Although NFT technology is in its infancy, there are endless possibilities for its applications in all industries, not just cannabis.

NFTs offer a level of exclusivity and personal experience that we really have not seen before. NFTs can help promote consumers wanting to pay for experiences over objects, which we believe is a great way to achieve personal happiness and increase your overall well-being.

In the future, we may see dispensaries partnering with cannabis brands to offer exclusive NFT deals for their most valued customers. Since the concept and technology are so new, we don’t have many examples to provide. However, if there is an industry that is full of innovators, it’s cannabis.

GrowHouse - Cannabis NFTs in Action

One of the most interesting brands emerging in the NFTs in the cannabis space is the app called GrowHouse. This game allows users to “grow digital weed and learn about cannabis,” and uses the token $GROW, which the game’s website describes as “A unique token economy that allows players to play, earn $Grow, and yield farm.”

Image credit: grow.house

The GrowHouse economy looks to promote a digital space where users can interact and discuss all things cannabis, crypto, and gaming ecosystems. The game is reportedly being built on the polygon blockchain, which is supposedly fast and free from transaction fees. Again, even experts know little about this fascinating new technology in general, which is always something we are keeping in mind.

NFTS in Cannabis - Not Much New Under the Sun

Although NFTs are new and interesting, using digital currency in the cannabis space isn’t exactly a new concept. Cannabis growers have been registering their cultivars on the Bitcoin blockchain for years now. Doing this is a way that cannabis breeders can prove their cultivars are unique, with some companies offering CoA’s that deliver a publicly accessible and time-stamped record that they are the phenotype’s creators.

Additionally, dispensaries have been accepting crypto as a way to offer debit card purchases to customers in an otherwise cash-only setting. This is something that will inevitably come up as more cannabis banking legislation is being discussed, scrutinized, and heavily debated by lawmakers who may or may not know what they’re talking about.

While crypto appears to be here to stay in the cannabis space, cannabis-specific crypto does not. The most popular of which is POT coin (CRYPTO: POT), made famous by the former NBA player Dennis Rodman wearing a Pot Coin shirt at a North Korean summit in 2018. Since then, cannabis-specific crypto has not made much noise. The reason is, cannabis crypto is limited to one industry, and cannabis coins have not made the technological advancements that other widely accepted coins have.

IRS Taking Notice

As is the case with most goods that generate significant revenue, governments at all levels will inevitably want their tax cut. Recently, Marijuana Moment ran a story with what some would say is a naively yet seemingly innocent, and perhaps even benevolent headline that the IRS “hosts cannabis and crypto tax event that highlights legalization.”

This headline implies the website believes that the IRS is there to help businesses utilize the power of crypto. The IRS does not appear to be interested in discussing this at all, rather being much more interested in how crypto will be taxed, cloaking the discussion under the guise of caring about legalization.

NFTs in Cannabis: Bottom Line

Even though the complex world of crypto and NFTs is confusing, we are excited for the seemingly endless possibilities they can provide for the cannabis industry. Necessity is the grandparent of innovation, and there are many needs in the cannabis space when it comes to finances and unique customer experiences.

We hope to soon experience even more exciting innovations to enter into our industry, as the future is bright for lucrative opportunities in cannabis. NFTs in Cannabis should help us usher in even more jobs in the industry, for those who can advance the development and adoption of the tech in our niche.

Disclaimer:

The content on this page is provided by HashDash for educational and entertainment purposes only. It is not intended as financial or investment advice. Do not use this information to make financial decisions or investments without consulting a qualified financial advisor or investment professional. Reliance on any information provided by HashDash is solely at your own risk.

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