What If You Could Smoke NFTs?

Breaking the Fourth Wall

What if you could smoke NFTs?

By Nadya Nataly

It is more than digital art. At the intersection of the metaverse virtual realm and cannabis, CampNova and The Crypto Cannabis Club (CCC), are exploring different ways to see and use art through NFTs by minting unique and non-fungible assets intertwined with weed.

The allure — it’s more than a digital bag of weed. Set to formally launch at the beginning of 2022, cryptocurrency, like Bitcoin, can go on a crazed cannabis shopping spree as CCC and CampNova are on the verge of breaking the fourth wall of the Metaverse.

By expanding its community into CampNova’s lifestyle, technological, e-commerce, and marketing platform, CCC is launching its cannabis brand, Crypto Cannabis Club Cannabis. The brand launch is a physical integration of characters and cannabis strains that open the blockchain space into physical versions of NFTs and a new experience that hasn’t quite been defined in the space.

“We have a special NFT cannabis strain so unique that when you smoke it, it digitally enhances your brain,” joked co-founder of CampNova Emery Morrison.

“It allows you to experience [with your five senses] what is going on in NFTs and cannabis,” Morrison said.

The launch taps into an aspect of NFTs that will turn digital cannabis strains into digital certificates of ownership that can be bought physically and sold along with the artwork. According to Ryan Hunter, an advisor at CCC, a bulk of the NFT owners in the CCC community are already cannabis consumers buying products on a weekly or monthly basis and spending more than $150 per store visit.

“The exciting aspect of all of this is to tie the blockchain to physical items,” said Hunter.

Furthermore, Hunter pointed out there is already a community curating cannabis NFT art collections similar to the IRL cannabis community seeking premier cannabis products.

By merging the NFTs into the cannabis space, the experience segues beyond the traditional smoke sesh. Morrison said it allows the NFT blockchain investors to connect with the story and content of the digitally-inspired cannabis art and IRL cannabis strains.

“We’re adding physical products to NFTs because, unfortunately, you can’t smoke the virtual NFT,’’ said co-founder and CEO of CCC Kevin Fitzpatrick.

Fitzpatrick explained that attaching the physical products in the latest NFT partnership makes the NFTs “redeemable” outside of the Metaverse which allows the owner of the NFT to buy CCC’s Crypto Cannabis Club Cannabis brand through CampNova.

“We’re on the cusp of something big here,” Fitzpatrick said. “Think of it like a Willy Wonka golden ticket. It’s a new wave of thinking about what the possibilities are here. Even if it means hiding NFTs in packaging to take the NFTs to new potential blockchain investors [who also want to get high on their investments].”

So in actuality, one could smoke an NFT. The Crypto Cannabis Club Cannabis brand will offer a collection of weed products including hand-selected, premium, indoor-grown cannabis in eighth-ounce packages. Through its delivery partners like Yams, Hellapaxx, and Smoke On The Water, Morrison said CampNova makes the physical aspect of NFTs accessible to smokers available on CampNovaonline.com via same to next-day delivery throughout California and other legal states.

Hunter also explained another unique aspect of the CCC NFT, its owners get a 30% discount when they buy the Crypto Cannabis Club Cannabis brand. Fitzpatrick said he’s hopeful the discount can eventually increase to 100% for investors owning CCC NFTs, but that might be down the road.

Stepping beyond weed and art, Fitzpatrick also hinted at an app and tech project in the works expected to use the blockchain Metaverse

Emery Morrison

Ryan Hunter

Co-founder and CEO of CCC Kevin Fitzpatrick

to authenticate the real cannabis strains versus the counterfeit knockoffs. He said the project is intended to provide more authentic cannabis strains and NFTs harder to replicate or resell, while maintaining true and verifiable ownership.

“If you think about the illicit market and brand equity, there are a lot of brands,” Fitzpatrick said. “California has brands that have made a name for themselves in cannabis to the point where now people are knocking off their packaging by going to China and getting their packaging recreated and then sticking illicit-market cannabis in that packaging. There’s an opportunity here to tie in a radio-frequency identification to that package and verify through an app.”

The NFT craze went up a few notches when Mike Winkelmann, a digital artist known as Beeple, sold an NFT for $69 million at the British auction house Christie’s. Celebrities like former pro wrestler John Cena and singer Shawn Mendes took note and also launched their own set of NFTs. During the 2021 edition of Art Basel Miami, the art world got an inside look at the best in blockchain technology and exclusive celebrity NFTs. And while it may seem that every celebrity has a weed brand on the west coast, not all have quite settled in the NFT space.

The Queen Bee, Lil’ Kim, stepped into the cannabis space in October 2021. She announced during MJBizCon that she would launch Aphrodesiak cannabis brand with superbad, inc., and CampNova in 2022. Her announcement was just the first step into the cannabis space as she’s currently steering her brand into the NFT blockchain.

The Grammy-Award winning “Lady Marmalade” rapper explained that integrating her physical cannabis products — featuring flower, prerolls, and erotic THC infused oils, with NFTs creates one-of-a-kind digital access to authentic collectibles with artwork and visual experiences she wouldn’t normally release. The authenticity of cannabis NFTs, provides a space separate from music, memorabilia, or Lil’ Kim posters that fans would do anything for.

“Linking Aphrodesiak to blockchain and NFTs will provide my fans a rare smoke of high-quality cannabis strains I like,” she said. “There are also exclusive experiences created and curated by me and my team.”

“With NFTs, Lil’ Kim is finally able to connect with bidders vying for digital content exclusive from her,” Morrison said. “In the process, this makes her creative work and cannabis brand irreplaceable and unique.” ❖

Crypto Cannabis Club Cannabis is a physical integration of characters and cannabis strains that open the blockchain space into physical versions of NFTs.

A Prescription for Privacy A Prescription for Privacy

Illinois’ new data security and privacy requirements are coming to a state near you.

By Dan Greene

As of Dec. 1, 2021, cannabis dispensaries and technology vendors operating in the state of Illinois must protect health information with the same stringent security and privacy standards required of medical providers under the federal Health Insurance Portability and Accountability Act (HIPAA). These regulations, applied by the Illinois Department of Financial and Professional Regulation (IDFPR), include fines of up to $10,000 per violation.

While Illinois is the first state to place these strict data security and privacy rules on dispensaries that provide medical-use cannabis, it is likely not the last. As the cannabis industry continues to grow and evolve, so does the attention from legislators and regulators. As more state legislatures and regulatory agencies address concerns surrounding the health information cannabis companies access and retain, we anticipate increased data security and privacy requirements placed on cannabusinesses that collect, process, and store client personal information, including health information.

While we wait for further regulations from other states, cannabis dispensaries and vendors located nationwide should begin taking a critical look at their data security and privacy protocols and start working toward compliance with HIPAA standards.

What are the HIPAA requirements included under Illinois’ Compassionate Use of Medical Cannabis Program Act?

HIPAA, a federal statute enacted in 1996, requires covered entities and many of their vendors (called business associates), to protect patient data, such as diagnosis and treatment information, which is known as protected health information (PHI). HIPAA applies to health plans, healthcare clearinghouses, and healthcare providers that submit standard electronic transactions. Since cannabis is not currently covered by health insurance, cannabis dispensaries arguably do not fall within the definition of a “covered entity” under HIPAA, because they do not submit requests for payments in the form of standard electronic transactions.

However, under Illinois’ Compassionate Use of Medical Cannabis Program Act (A280), dispensaries that provide medical-use cannabis to patients must implement data security and privacy standards like those required under HIPAA. IDFPR published specific guidance outlining its interpretation of the Act’s requirement for HIPAA-like privacy and security requirements. Specifically, dispensaries are required to provide customers with a Notice of Privacy Practices and adopt administrative, technical, and physical controls consistent with HIPAA Security Rule standards with special attention given to conducting regular security risk assessments. It is worth noting for those new to HIPAA, that a Notice of Privacy

Practices is not the same as a website privacy policy or other privacy statements.

Importantly, IDFPR guidance also states that these requirements apply to vendors of cannabis dispensaries that receive patient data from dispensaries. This would include call centers that handle patient calls from medical licensed cannabis dispensaries, vendors that host patient medical data, and vendors that perform data analysis that requires the use of identifiable medical information.

How does HIPAA define administrative, technical, and physical controls, and what constitutes a risk assessment?

Under HIPAA, administrative controls refer to the processes, policies, and procedures used to protect health information against a breach or unauthorized disclosure. Technical safeguards refer to technology, including firewalls, encryption, and backups. Physical safeguards, like facility access controls, device and media controls, and workstation use procedures, protect the physical facilities that house an organization’s sensitive patient data.

IDFPR focuses on two HIPAA safeguards in its guidance — security risk analysis and encryption of health information at rest and in transit. Although HIPAA does not prescribe a timeframe for a security risk analysis, the IDFPR guidance states that medical cannabis providers should conduct a security risk analysis annually. IDFPR also states that not encrypting computers or networks where data is transmitted or stored and not encrypting emails containing patient data would constitute a violation.

Creating and implementing these types of controls and safeguards requires specific knowledge of data security and privacy best practices, making this a daunting ask for some canna-businesses. Dispensaries and technology vendors that host health information should meet with counsel to discuss how these new requirements can be efficiently incorporated into existing compliance programs.

Could Illinois signal a trend for other states?

Other states may embrace Illinois’ use of HIPAA guidelines as an easy way to adopt data protections for cannabis data. From a health consumer perspective, HIPAA has been in place for over two decades and is well understood by businesses in the medical field. Since many dispensaries distribute cannabis primarily for medical purposes, requiring dispensaries to adopt HIPAA standards is an easy, if not clumsy, manner of protecting this data. Additionally, current cyber threat trends suggest threat actors target health information, especially in fastgrowing industries that have not yet been held to sophisticated data protection standards. Arguably, the states that lean into the HIPAA framework are preparing the industry for eventual federal requirements under HIPAA, a likely outcome once federal rescheduling occurs.

While enforcement of HIPAA in the cannabis industry at the federal level is on an uncertain timeline, sophisticated operators are already preparing as if it does, as we may soon see some states follow the precedent set by Illinois. It is best practice to implement data security and privacy controls even if HIPAA does not directly apply to your organization at present. Preparing your canna-business now will ultimately protect you and your customers from financial and reputational harm and allow the business to have a smooth transition into complying with additional regulatory requirements if HIPAA ever does become directly applicable to cannabis dispensaries.

Photo: iStockphoto.com/Tero Vesalainen

What can cannabis companies do to prepare?

Here are the key questions cannabis dispensaries and vendors should ask themselves as they evaluate readiness for new requirements:

• Should I draft my Notice of Privacy Practices and train staff on its use? • Should I hire or appoint additional privacy and security personnel? • Is my training program appropriate and adequate? • Should I consider additional administrative, technical, or physical controls to prevent unauthorized access? • Is my annual risk analysis sufficient? • Should I change my vendor management protocols? • Does my incident response plan consider relevant notification requirements? • How should I document these compliance measures? • Do my employees know what to do when a patient requests records?

Partnering with sophisticated legal and technical counsel that work on these initiatives can help canna-businesses amend their data protection practices to comply with current and future regulations and safeguard their customers sensitive health information. ❖

A Climate of Change A Climate of Change

Unpredictable weather and automation technology are pushing agriculture indoors.

By Jessica McKeil

By 2050, there will be nine billion people on planet earth. That’s two billion more mouths to feed than today. In an increasingly unstable environment thanks to climate change, how will farmers pivot to meet the needs of the global population?

To improve yield, make better use of limited resources, and mitigate the risks posed by climate change, the future of farming is moving indoors. Advances in automation and controlled environment agriculture (CEA) will make this move feasible.

Controlled environment agriculture is nothing new, but it’s experiencing somewhat of a renaissance thanks to its widespread application in commercial cannabis cultivation. Could the technological advances accelerated by the indoor and greenhouse cannabis industry translate to food crops to help feed the world?

Solving for Unpredictability Through Total Control

According to Scientific American, between 1991 and 2017 there were roughly $27 billion worth of U.S. crop insurance payouts linked to climate-fueled temperature increases. As stated by the Climate Atlas of Canada, “Farmers are used to planning for uncertainty, but climate change is bringing new extremes, seasonal shifts, and increased variability.”

This is an issue Dan Olshwang (CEO) and Eitan Braverman (CMO) of American Growor know all too well. The team has 50 years combined experience researching and growing with CEA, addressing the inherent risks of conventional agriculture that have increasingly become a priority for their customer base.

Olshwang explained that controlling the environment is all about reducing “the volatility to a minimum and increasing profitability to a maximum.” To reduce the inherent risks associated with outdoor farming, American Growor has developed state-of-the-art, artificial intelligence (AI)-powered cultivation tech that automates the indoor environment and dynamically responds to changing parameters.

Instead of leaving it up to mother nature, CEA technologies, like the kind orchestrated by American Growor, take charge of the environment to ensure every outcome is predictable, crops are more consistent, and most importantly for farmers, profitability is achieved.

Cannabis Accelerating Technological Advances in CEA

In 2020, the global cannabis market reached $20.47 billion, as reported by Fortune. There is no sign of it slowing down anytime soon. Tech Crunch estimates that by halfway through 2021, the cannabis sector had already attracted a 165% increase over 2020 investment levels. The astronomical investments thrown into cannabis are a lightning rod for the entire CEA sector.

Technically speaking, farmers have been working with CEA methods since the first recorded use of greenhouses in the 1500s. But in the 21st century, CEA has been taken to entirely new levels of automation and control that go well beyond the simple protection offered by a layer of glass.

As technological innovations have made CEA much more viable over the last century, there has been an exponential increase in investment. This has proven especially true in the last few decades, thanks to the rise of legal cannabis markets in the U.S., Canada, and beyond.

Yes, the established agricultural sectors (tomatoes, peppers, strawberries, and other traditional crops) pioneered climate-controlled cultivation, but it’s the money funnelling into cannabis that’s fuelled greater innovation and visibility.

Steve Graves, head of business development with Fluence by OSRAM, has personally witnessed the impact of how the advances in CEA for cannabis are spilling over into fruits and vegetables.

Fluence builds LED lighting systems for cannabis cultivation that combine different spectra, intensities, and other lighting strategies to produce flowers with highly marketable cannabinoid profiles. But, they also use the very same technology for greenhouse-grown strawberries, albeit crafted in a way that elicits different marketable characteristics, like color, morphology, and Brix content.

Graves explained that the value propositions of CEA are similar across crops, but for Fluence, it is “profoundly impactful to the profitability of a cannabis operation.” He stated, “We have seen much more adoption of LED technology within cannabis, allowing our business to scale and support other segments of the industry.”

Braverman at American Growor agreed that the current obsession with cannabis production has accelerated the entire CEA sector forward. In Bravermans opinion, “There are a lot of advances in technology because of the cannabis space, but we are only seeing these advances because a lot of money is pouring in.”

The Future of Agriculture Will Hinge on Increased Automation

In a world rocked by climate change, a large portion of global cultivation will have to move indoors — and perhaps sooner rather than later. But, this is only the first step.

To ensure this move also produces more with the same resources and hopefully helps to feed two billion more people, any CEA will have to adopt increasingly intelligent automation.

Automation is key to growing less with more because it ensures the intentional and efficient application of every resource. Olshwang from American Growor explained, to ensure that a system can produce enough output to make it valuable, “The only way to do it is to fully control the environment — to optimize the environment.”

Olshwang and the team at American Growor have incorporated dynamic AI into their cultivation systems, which enables even inexperienced farmers to run an efficient farm. Total environmental recipes, curated for each crop and cultivar, automatically adjust on a daily basis to meet the specific needs of the plants. These types of AI-driven advances in automation mean less labor, more efficient inputs (nutrients, energy, etc.), and better, healthier outcomes.

The Future of CEA Is Already Here

Cannabis-driven advances in CEA, including AI-driven automations, are already attainable — and rapidly increasing the yield, quality, and consistency across crops.

As only one example from the world of cannabis, in an American Growor case study, the system improved cannabinoid profile, increased total yield per plant by 30 grams, and reduced the total duration by 2.5 weeks — compared with another leading lighting system.

Similarly, Fluence worked with a large-scale greenhouse tomato operation to improve yearround production. After installing Fluence’s VYPR series across 10 acres, the case study measured energy savings of 3.6 million kilowatthours and a 10% increase in fruit production, among other benefits.

As Olshwang summarized, the key will be to “orchestrate all the components, all the elements that serve as inputs, to optimise the growth of the plant and the health of the plant.” Through advances in automation, control, and increased sharing of tech developments, climatechange resistant cultivation to meet the demands of a growing population may finally be achievable. ❖

The established agricultural sectors (tomatoes, peppers, strawberries, and other traditional crops) pioneered climate-controlled cultivation, but it’s the money funnelling into cannabis that’s fueled greater innovation and visibility.