If you aren’t plugged into the world of crypto assets, there is a new term you need to learn: NFT. Non-fungible tokens are digital items, often works of art, that are traded online through the blockchain. As when you buy Bitcoin, Ethereum or other cryptocurrencies, your purchase of an NFT is recorded in a digital ledger that cannot be counterfeit; if you sell your NFT to a collector, that sale will also be recorded in the same ledger. As a result, NFTs are investments that are easy to track and accessible to essentially everyone with an internet connection.
Technically, the first NFTs were published in the early days of cryptocurrency, around 2012, but over the past two years, the marketplace for NFTs has seen exponential growth. These days, big-name celebrities are peddling their own NFTs in the hopes of attracting public attention and capitalizing on the craze. Already, Rob Gronkowski, Mark Cuban, Ja Rule and Lindsay Lohan have created NFTs, and Tom Brady is creating a NFT platform expressly for digital celeb stuff. Suffice it to say that NFTs remain relatively new, exciting and undeniably fascinating to all sorts of investors.
Yet, some thing that NFT creation is getting a bit out of control. The best evidence for this might be so-called digital marijuana — which sounds suspiciously like a virtual version of the beloved psychoactive drug. What is digital marijuana, and why would anyone want to invest in it?
Digital Marijuana Isn’t Actually Marijuana
Ironically, the first ecommerce transaction ever completed was a cannabis sale. In 1972, when the internet consisted of only a handful of linked computers around the U.S., students from Stanford traded a small amount of weed to students at MIT — though the exchange of goods and money was actually completed in person because it is impossible to send marijuana in the virtual space.
Unfortunately, this truth still holds true today. Though an increasing number of cannabis-related transactions take place online — thanks in no small part to COVID-19, which pushed local regulators to permit no-contact cannabis pickups and deliveries — the actual bud itself is a physical property that must be transported to end users via shipping or courier. For example, if you buy marijuana from a Michigan provisioning center, the budtenders won’t send your purchase as an email attachment. The concept of “digital cannabis” which can be bought and sold online is absurd, or at least it was until the recent NFT craze.
The confusion about digital cannabis is the result of Laval Coin, a crypto asset created by Jessie Grundy, the chief executive of California-based cannabis brand Peakz. Despite the term “coin” in the asset’s name, Laval Coin is not a cryptocurrency like Bitcoin or Doge Coin; rather, it is an NFT, and a rather cleverly marketed one at that.
Most NFTs are pieces of digital art. For example, the most expensive art ever sold at auction is an NFT created by digital artist Beeple, and artist Grimes recently made over $6 million by dropping two pieces as NFTs. Increasingly, NFTs are diversifying into other types of creative works, like the band Kings of Leon’s new album, which was initially released as an NFT. Some argue that NFTs allow for the democratization of art, giving more power to everyday consumers to determine what counts as good, valuable art.
However, Laval Coin is not digital artwork. Rather, it is “the world’s first digital cannabis strain.” Unlike real weed, which is very slowly becoming acceptable in certain corners of the world, Laval Coin is legal everywhere. Also unlike weed, anyone can buy Laval Coin — not just adults of a certain age or those suffering from severe medical conditions.
Laval Coin’s opening bid was $60, but the value has tanked since then. Likely, the sudden exposure of the NFT market and the NFT boom has caused Laval Coin to get buried under other, celebrity-endorsed NFT options. However, it might be that NFT investors aren’t entirely sold by the idea of a digital asset that offers nothing but value. At least with art NFTs, investors get to view a unique creative work; there is no digital high associated with digital weed.
The digital landscape is shifting rapidly, and leaving many people with many more questions than answers. For now, cannabis enthusiasts should continue buying the real thing — and perhaps digital marijuana will become a more significant concern in the distant future.