Cannabis in Web3, read this https://cannabis.net/blog/opinion/weed-in-the-web3-metaverse-what-is-cannabis-tokenization-anyway.287513

1. 3/15/22, 7:52 AM Weed in the Web3 Metaverse - What is Cannabis Tokenization, Anyway?
https://cannabis.net/blog/opinion/weed-in-the-web3-metaverse-what-is-cannabis-tokenization-anyway.287513 2/12
WEB3 CANNABIS
Weed in the Web3 Metaverse - What
is Cannabis Tokenization, Anyway?
Cannabis, crypto, Web 3, and blockchain, a brave new world?
Posted by:
Joseph Billions , today at 12:00am
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2. 3/15/22, 7:52 AM Weed in the Web3 Metaverse - What is Cannabis Tokenization, Anyway?
https://cannabis.net/blog/opinion/weed-in-the-web3-metaverse-what-is-cannabis-tokenization-anyway.287513 3/12
Cannabis and Web3 Crossover: Tokenization
The growing momentum of cannabis and cryptocurrency acceptance in the United States is beautiful to
behold. The team-up of the two sectors recently best explains the wise words that say that two heads
are better than one.
Both sectors are not federally recognized as legal entities. This has resulted in a standstill in providing
financial services in the cannabis industry, as traditional financial institutions continue to shut their
doors to cannabis-affiliated companies. A solution has presented itself through the intersection of
cannabis and blockchain technology.
Cannabis, Cryptocurrency, Web 3, and Blockchain Technology
The cannabis industry has been operating with cash for many years, making these businesses a target
for robberies. In a bid to effect changes, the legislature drafted the SAFE Banking Act
(https://cannabis.net/blog/news/no-safe-banking-for-you-the-safe-banking-act-gets-removed-from-the-
national-defense-authorizati). But this measure has failed to pass the previous times it was introduced.
Blockchain technology and digital tokens are the next available solutions to solve the financial
challenges in the weed sector.
Note that the cannabis and Web3 relationship is a highly volatile area in the U.S. constitution. Any step
you plan to take regarding this must be done with the guidance of experienced security and crypto
attorney.
Cannabis companies are in the early stages of integrating their operations with blockchain technology.
In the past 10 to 13 months, dozens of cannabis operators have set up their own Decentralized
Autonomous Organizations (DAO). Crypto legal firms have helped sort out the governance and financial
issues involved in the on-chain and off-chain financing of these businesses.

3. 3/15/22, 7:52 AM Weed in the Web3 Metaverse - What is Cannabis Tokenization, Anyway?
https://cannabis.net/blog/opinion/weed-in-the-web3-metaverse-what-is-cannabis-tokenization-anyway.287513 4/12
The services of NFT creators (https://cannabis.net/blog/opinion/a-closer-look-at-cannabis-and-nfts-
what-are-marijuana-nfts-and-how-are-brands-using-them) and studios are being utilized to pinpoint the
best path to take to effectively link the crypto and cannabis sectors without risking or compromising the
intellectual property of either party.
The Decentralized Finance (DeFi) niche has the most benefits to offer the cannabis sector. Businesses
will have access to POS solutions and APIs that cover up the absence of traditional banking services.
Smart contracts are being used for this.
Tokenization of Cannabis Entities In Web3
Tokenization, also known as fractionation, is the process of dismantling the ownership and control of a
cannabis asset into little pieces of tokens. These smaller tokens are sold, bought, held, exchanged, and
traded on recognized platforms.
Tokenization has always been a concept before the internet, before the mainstream. In traditional
financial bodies, it was known as "stocks," sometimes the contractual rights of a corporation. The
advent of Web3 in recent months has made the term a go-to word in the crypto space. In some months,
other new terminologies will be communicated across the space to explain the distributed ledger
technology on which Web 3 is built.
Before the advent of the Internet, we commonly referred to this tokenization as stock in a corporation
or general contractual rights. Now that we have delved deeper into the Web3 field, the industry is
developing new terminology built on the distributed ledger technology that makes up Web3.
Cannabis Token Securities
Tokenized securities in the cannabis industry are described as "cannabis business stocks." They are
owned by corporations or LLCs. There are different varieties based on debt and equity, including
convertible notes, Simple Agreement to Future Equity (SAFE), and preferred ownership interests. In
today's general trading world, tokenized securities are basically stocks that can be traded.
With Decentralized Finance and Web3, cannabis token securities have much more utility than simply
conferring ownership and profit-sharing rights in licensed cannabis businesses. These tokens have
extra features that are much more than voting rights. These additional features include access to
particular markets, which are limited to holders of an entity's token. These tokenized securities, or
stocks, appreciate with time because they are built upon the Web 3 underlying technology.
In traditional finance, cannabis security tokens can be likened to securities. These "securities" merely
confer traditional rights or ownership to the buyers without the extra Web 3 features.

4. 3/15/22, 7:52 AM Weed in the Web3 Metaverse - What is Cannabis Tokenization, Anyway?
https://cannabis.net/blog/opinion/weed-in-the-web3-metaverse-what-is-cannabis-tokenization-anyway.287513 5/12
Cannabis Utility Token
These utility tokens differ from tokenized securities. They offer practical value that has little to do with
the ownership rights provided by security tokens.
Tokenized Web3 utilities are other components of security and security tokens aside from their
proprietary rights. These utilities are more or less the economic benefits of owning tokens of cannabis
or cannabis-affiliated entities. It enables the holders to vote during company events and grants access
to locations, metaverses, and other token holders. With cannabis utility tokens, customers are first in
line for exclusive products within and outside of the crypto space—meaning new products in real life
and digital assets like NFTs in the crypto space.
Once the cannabis crypto space (https://cannabis.net/blog/b2b/6-cannabis-cryptocurrencies-you-
should-know-about-today) is fully functional, these cannabis utility tokens will be pegged to
cryptocurrencies that can be mined to gain access to certain cannabis DAOs and markets.
Cannabis NFT Tokens
Non fungible cannabis tokens (https://cannabis.net/blog/opinion/weed-nfts-the-battle-between-stoned-
cats-and-blazed-cats-is-a-pushback-on-celebrity-cannabis-ca) are digital assets that can be used in the
real world. They are also utility tokens that give a digital representation of the cannabis entities.
Currently, cannabis NFT tokens are in the form of artwork, videos, memes, and GIFs. They are also used
as access cards for events held by the parent company.
Cannabis NFT tokens can be tokenized or fractionized rather than sold as a single asset. Multiple
owners share ownership of the asset. Some of the available NFTs in the blockchain and cannabis
intersection serve digital goods or token securities.
Bottom Line

5. 3/15/22, 7:52 AM Weed in the Web3 Metaverse - What is Cannabis Tokenization, Anyway?
https://cannabis.net/blog/opinion/weed-in-the-web3-metaverse-what-is-cannabis-tokenization-anyway.287513 6/12
The unavailability of traditional financial services will encourage more cannabis companies to seek
refuge on the Web. The marijuana metaverse (https://cannabis.net/blog/opinion/the-marijuana-
metaverse-a-closer-look-at-cannabis-and-virtual-reality) is still in its early stages, but brands are setting
up virtual locations already.
At first, many operators may get overwhelmed by the crossover into the new tech space, but with time
and access to information, things will become normal. Crypto experts even admitted that during their
early stages of becoming involved in the tech space, they felt as though they were being drowned in
unfamiliar territory.
Web3 has not attained half of its peak height, and as such, the space is growing each day. No one can
rightfully claim to be an expert on Web3 tech right now. Even the US Securities and Exchange
Commission is still trying to make sense of the entire concept.
All you have to do is make sure you procure legal services and educate yourself before diving into the
world of cryptosXcannabis. You can watch YouTube videos attend webinars or conferences for more
information about the tokenization of cannabis assets.
CANNABIS IN THE METAVERSE, READ MORE...
(https://cannabis.net/blog/opinion/a-closer-look-at-
cannabis-and-nfts-what-are-marijuana-nfts-and-how-are-brands-using-them)
MARIJUANA NFTS AND HOW BRANDS ARE USING THEM ALREADY!
(https://cannabis.net/blog/opinion/a-closer-look-at-cannabis-and-nfts-what-are-marijuana-nfts-and-
how-are-brands-using-them)
OR..

6. 3/15/22, 7:52 AM Weed in the Web3 Metaverse - What is Cannabis Tokenization, Anyway?
https://cannabis.net/blog/opinion/weed-in-the-web3-metaverse-what-is-cannabis-tokenization-anyway.287513 7/12
(https://cannabis.net/blog/opinion/the-marijuana-metaverse-
a-closer-look-at-cannabis-and-virtual-reality)
THE MARIJUANA METAVERSE IS ALIVE, WHERE DO YOU FIND IT?
(https://cannabis.net/blog/opinion/the-marijuana-metaverse-a-closer-look-at-cannabis-and-virtual-
reality)
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8. 3/15/22, 7:52 AM Weed in the Web3 Metaverse - What is Cannabis Tokenization, Anyway?
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9. 3/15/22, 7:52 AM Weed in the Web3 Metaverse - What is Cannabis Tokenization, Anyway?
https://cannabis.net/blog/opinion/weed-in-the-web3-metaverse-what-is-cannabis-tokenization-anyway.287513 10/12
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