Most people buy cannabis with the intention of consuming it.
There are certainly buds that please the eye and tickle the nose, no doubt. Even still, it’s hardly a revolutionary statement to suggest that the main motivation most people have when purchasing cannabis is to eventually ingest it in one form or another.
Well, that used to be the case before the arrival of something called a non-fungible token.
Beyond being a fun phrase to say, non-fungible tokens (NFTs) are in fact a form of blockchain technology. Basically, these are digital assets – say, a YouTube clip – that can be purchased and thus “owned” by the buyer. But what value does something that anyone with access to the internet can also find, load, and watch for free actually have?
Shockingly, quite a bit!
You may have noticed NFTs in the headlines a lot as of late. That’s thanks to companies like NBA Top Shot, which the Wall Street Journal described as a “platform to buy, sell and collect officially licensed video highlights.” Since launching in July 2019, NBA Top Shot has helped the concept of NFTs make mainstream inroads into what once seemed a hopelessly niche market.
The craze has also been helped along by the good fortunes of folks like Michael Levy, who reportedly invested $175,000 into NBA Top Shot digital trading cards over a period of six months and now has a collection valued at $20 million.
Aside from the fact that most of us do not have $175,000 to risk, there are also those who continue to question what, exactly, it is that fans like Levy even own?
In an essay for the Atlantic, one of the folks behind the conception of NFTs, Anil Dash, cited a post by software engineer Jonty Wareing to help explain how something meant to help artists make money and keep control over their work instead became a plaything for big brands.
“Right now,” wrote Wareing on Twitter, “NFTs are built on an absolute house of cards constructed by the people selling them.”
Dash’s mea culpa continues with the author laying out, fairly bluntly, just how things went wrong.
“The idea behind NFTs was, and is, profound,” he argues. “Technology should be enabling artists to exercise control over their work, to more easily sell it, to more strongly protect against others appropriating it without permission. By devising the technology specifically for artistic use, [we] hoped we might prevent it from becoming yet another method of exploiting creative professionals. But nothing went the way it was supposed to. Our dream of empowering artists hasn’t yet come true, but it has yielded a lot of commercially exploitable hype.”
And it is into this veritable minefield of cryptocurrency confusion and corporate greed that the strange tale of digital cannabis begins.
As Forbes’ Chris Roberts reports, Jessie Grundy, owner and chief executive of the upscale Oakland cannabis brand Peakz, has staked his claim by offering for sale what he’s billing as the world’s first digital bag of weed.
Of note: these virtual nugs (dubbed “Lava Coin”) are not beholden to any state or international laws governing the legality of cannabis. Of course, the reason for that is because this product exists only as an endless string of characters in a blockchain, which does put a bit of a damper on the prohibition reprieve.
“You can’t smoke it,” Roberts confirms, “but as a bonus, if you do buy the ‘the first digital cannabis strain ever available,’ and if you are based in Oregon or California, you also get some ‘real’ physical marijuana.”
That’s a lovely perk but for anyone living outside of the area, buying Grundy’s Lava Coin or investing in packs from NBA Top Shot offers the poorer who participate what amounts to a chance to play the lottery by another name. Meanwhile, richer interests are jumping aboard thanks to the newfound bragging rights NFT ownership can offer.
“The reason why someone would want digital weed is the uniqueness,” Grundy explained to Roberts, who noted that the Peakz owner also made a case for blockchain-based proprietary genetics within the cannabis world as a way to settle one of the weed world’s oldest questions: “who came up with what strain, with the exact genetics identified, and who did it first.”
It’s an interesting wrinkle but one it’s nonetheless difficult to imagine a generation of old-school, technology-adverse, happily off-the-grid farmers rushing to embrace.
Plus, in addition to all of the above, there is also the environmental impact tied to this new cryptocurrency fad.
As a recent report in TIME detailed:
“While NFTs hold promise, critics say the mining that makes them possible is perhaps humanity’s most direct way of making money by polluting the planet. Ethereum mining consumes about 26.5 terawatt hours of electricity a year, nearly as much as the entire country of Ireland and its almost 5 million residents.”
The article’s author, Alejandro de la Garza, goes on to note that while, “in theory, all mining energy could come from renewable sources” the truth is that, at this moment, “there is money to be made by essentially converting cheap fossil fuels into valuable cryptocurrencies.”
“And for an asset with no physical presence or utility outside the digital realm,” de la Garza continues, “the process of producing the ‘coins’ is tremendously inefficient —one 2018 study found that cryptocurrency mining consumes more energy for every dollar of value generated than extracting gold or copper.”
Taken together, it appears a murky future awaits when it comes to NFTs and the world of regulated cannabis. Some abstract promise, yes, but in practice, the immediate evidence suggests the price is far too high.
In the meantime, however, more like Grundy will surely dip their toes into this tantalizing — if deeply flawed — potential new revenue stream. Will it be worth the cost?