Cannabis NFTs

With the current popularity of NFTs, every cannabis company wants to get in on the action and start making money from selling their own cannabis-themed NFTs. While many of these companies are aware that NFTs are part of a larger movement known as Web3, it can all feel quite overwhelming and foreign.

Many people feel that large institutions have too much control over our data, finances, and other resources. Web3 is a movement that aims to change this by using blockchain technology to create decentralized alternatives. This includes things like cryptocurrencies (see here), NFTs (see here and here), and DAOs (see here, here, and here).

Recently, we have been focusing on NFTs (non-fungible tokens), including drafting and reviewing contracts for our clients. Some of our projects involved preparing operating agreements for NFT companies and their owners. Others entailed creating contracts between NFT studio companies and their investors or consultants–similar to what is typically done with influencer agreements in the cannabis industry.

If you’re a cannabis (marijuana or hemp) business wanting to hire an NFT studio or creative advisor, this article is for you.

NFTs are Multifaceted and Not Well Understood

I’ve heard NFTs described in a variety of ways. Art. Digital property. Keys. Assets (including art, digital property, keys, etc.). Bling. Decentralized ownership tokens (DOTs). Securities are another term for NFTs that you may hear occasionally. All of these terms relate to NFTs in some way, but they aren’t “only” any of them. Depending on how they’re utilized, NFTs might be some or all of these things

Do not be fooled into believing that NFTs are anything other than intellectual property or securities. If your NFTs are deemed stocks, you should exercise extreme caution.

When most people think about NFTs, they are usually talking about intellectual property. We’ve been working on registering trademarks and drafting agreements deal with the licensing aspects of this new intellectual property. You may consider NFTs in the same light as you do other intangible business assets.

What Do You Have to Offer to the NFT World?

Though you may have some creative marketing individuals on your team who are interested in creating NFTs, most cannabis firms don’t have an in-house web3 developer or creative artist. In reality, cannabis businesses are ideal for the NFT industry. Because marijuana trademark registrations are prohibited by the USPTO, you were able to be rather inventive when trademarks (apparel and ancillary goods) for your swag (apparel and ancillary products) were filed simultaneously with your leaf-touching items.

NFTs are, in essence, digitized art, which is intellectual property. Every time I see an ape NFT, I am reminded that the term “art” can be interpreted very broadly.

How Do You Start Creating a Cannabis NFT?

Whether your cannabis company is bootstrapping or well-funded, you need to take inventory of your intellectual property. The worst mistake you can make in the NFT industry is to create and successfully sell NFTs containing someone else’s intellectual property that you have not secured permission to use.

If you’re a bootstrapped cannabis company, Google is the way to go. Look for one of many firms that provide DIY NFT creation software, since this will save you time and money in the long run. You may pick which cryptocurrency blockchain you want to use from there to release or abandon your newly minted NFTs.

If your cannabis business is more established and has additional resources, you might want to opt for a more tailored path into the NFT market. Lots of new studios that focus on NFTs have been appearing as of late, and they typically comprise not only a technical team but also other professionals like brand ambassadors or talent consultants with experience in SimonArgus/NashTheory velopment. These companies may be open to partnering with an up-and-coming cannabis company.

Using Influencers with Cannabis NFTs

Influencers on retainer are already employed by successful NFT studios, and they frequently have an ownership stake in deals that the NFT studio executes inside their field of expertise. Influencers (also known as talent consultants) are either talented themselves (think about athletes such as Seth Curry, celebrities like Paris Hilton, artists like All Seeing Seneca, and musicians like Kings of Leon) or understand the entertainment business. Some entrepreneurial influencers are both.

NFT studios will commonly offer an equity-based or quasi-equity arrangement to potential clients. However, many cannabis entrepreneurs who have been in the industry for awhile are reticent to give up any ownership stake if possible. Fortunately, NFT studios are frequently more open to negotiation on this front.

If you want to launch a cannabis NFT campaign, remember that you doesn’t need to give up equity in your main cannabis company (Washington state usually bans this), but you might need to include a success fee.