Marijuana and money—two of my favorite themes in the investment space.
Which is why I want to share with you this new opportunity to mint an NFT tied to a European business that is already profitable in the legal-weed market.
The NFT project is called Dope Growers’ Society.
NFTs, of course, are one-off, one-of-a-kind cryptocurrencies that represent ownership of a digital asset. (Before reading this alert, I’d advise that you check out the two NFT reports I’ve prepared as part of Frontier Fortunes, if you haven’t already done so. These are: How to Invest in NFTs and The Frontier Fortunes Guide to NFT Wallets.)
The company behind the NFT has been around for five years, and since 2021 has been supplying the German medical-marijuana market with cannabis grown at its nearly 54,000-square-feet, indoor farm in Portugal.
That business—fully licensed—is profitable and growing as demand for high-quality medical cannabis continues to expand. Indeed, the company’s founder, known as Pitone on Discord, tells me they already have supply contracts in place for the next five years and “we could sell more if we had the cannabis.”
As good as that sounds to me (and I’m a long-time investor in legal-weed businesses), there’s a much bigger reason I’m bullish on Dope Growers’ Society: Germany is in the process of legalizing recreational marijuana. That could happen in 2023 and it promises to be a watershed moment.
Germany, because of its economic heft, is the continental trendsetter. Once weed is legalized on a recreational level there, we’re going to see governments all across Europe legalizing recreational weed. And it only makes sense that they would do so. Weed is a vice product, no different than cigarettes and beer. Demand is huge, widespread, and largely inelastic, meaning consumers don’t stop buying it because of economic ebbs and flows.
Moreover, the tax revenues that legal-weed sales generate will help countries better cope with (at least a little) their increasing debt obligations.
We’ll come back to Europe in a moment. But first, let’s get to the main reason why all of this has me excited: money!
How the Revenue Share Works
Dope Growers’ Society will be launching two NFT collections over the next few months, and both come with a meaningful revenue share, meaning your NFT will spin out crypto monthly.
- Grow Rooms is a 777 NFT collection that will mint in the next few weeks. Each NFT represents ownership of one physical marijuana plant, and NFT owners will earn a 40% revenue share off that plant and its four harvests per year.
- Dope Growers is a PFP (profile picture) collection that is scheduled to mint later in the first quarter of 2023. This will be a larger collection, likely in the range of 6,000 to 8,000 NFTs. Those will also represent ownership of one physical marijuana plant, but will come with a slightly smaller 30% revenue share. (Note: Each Grow Rooms NFT will receive for free 1 Dope Growers PFP in an “airdrop,” and will be whitelisted to mint two more. An airdrop is simply when a project sends an NFT to your wallet for free.)
Because the company has been in business for many years now, it knows what a marijuana plant typically produces and what that production is worth when selling into the pharmaceutical industry. As such, the company knows how much each NFT will earn and has guaranteed a minimum payout and capped the maximum.
- Each Grow Room will earn between €36 and €54 per month (about $38 and $57).
- Each Dope Growers PFP will earn between €27 and €40.50 per month ($29 and $43).
As I said, the revenue share here is meaningful. These payouts are all in U.S. Dollar Coin, or USDC, the so-called stablecoin built to remain at a $1 value. So, you will not have to convert an in-house currency into USDC.
A Grow Room NFT will cost 5 Solana to mint from the whitelist. At today’s price, that’s about $65, meaning we’re going to recoup the cost of our NFT in less than two months. Everything after that is gravy.
The team will begin cultivating the plants tied to the NFTs starting in early 2023, so the revenue share should begin in the spring, after the first crop arrives. Weed functions on a roughly 90-day crop cycle, so Dope Growers will gather up roughly four harvests per year.
Dope Growers has published an online calculator that lets you determine how much you could earn based on the amount and mix of NFTs you own.
Why Is the Business Offering to Share Income?
So, you might be thinking, as I was when talking to Pitone, why does a successful business even need to sell an NFT that mints only 777, which at 5 SOL is just over $46,000?
The answer is marketing and brand awareness.
Right now, the cannabis that the company produces at its indoor grow operations in Portugal goes to German wholesalers who process, package, and sell into the pharmaceutical market under their own names. However, once Germany goes recreational, Dope Growers’ Society will launch its own private-label consumer brands. The company hopes the 6,000 to 8,000 Dope Growers PFP owners will become walking, talking billboards for, and buyers of, the new products. The 777 Grow Rooms exist only to reward early community members before the big PFP mint happens.
Dope Growers at the moment has the capacity to grow 10,000 plants but is ramping up to grow as many as 30,000 plants to meet expanding demand and to prepare for Germany opening up the recreational market some time in 2023.
The company’s existing licenses and ties to the German pharma market put it in a prime position to be an early winner in the recreational boom in Germany and, ultimately, across Europe. And that promises to be a huge boom.
Europe, with more than half a billion consumers, is nearly 2x the size of the U.S. consumer market.
Along with Germany (a nearly $5 billion market by itself), the Netherlands, Switzerland, and Luxembourg are also exploring legalization of recreational weed. Medical cannabis, meanwhile, is already legal across a large swath of Europe, so it’s not hard to imagine that once the center of Europe legalizes recreational weed, the countries currently allowing the sale of medical marijuana will quickly follow with recreational-weed legalization, if only because of the tax revenues they’ll earn.
For me, as an investor in consumer products, I love legal weed. In good times, demand for vice products is strong. In bad times, demand is equally strong if not stronger. Indeed, during COVID, Dope Growers saw demand soar as more and more Germans visited doctors for medical-marijuana prescriptions. And today, as inflation wracks the world and as the global economy slips and slides toward recession, demand continues to grow. People will forsake other purchases in order to afford their vice.
That’s a great business model that I want to invest in.
Other NFT Benefits
The Dope Growers team, I should note, is publicly doxxed, which is logical given that there is a real business behind the NFTs that requires licensing from various governmental agencies in Germany and Portugal to grow and sell marijuana, and to move it across borders.
The team is comprised of two executives, including Pitone, who run the business, as well as 37 workers and managers handling the indoor grow operations in Portugal.
Looking into 2023, I can tell you that Dope Growers will be pursuing partnerships with existing weed brands that will bring additional benefits to NFT holders. European NFT holders will have access to an online shop where they can buy CBD (cannabidiol) products produced in-house. That will be an NFT-gated site offering discounts to Dope Growers holders.
The company isn’t allowed to export product into the U.S., so for American NFT holders the company is partnering with stateside cannabis retailers to offer discounts to those who own a Dope Growers NFT.
Moreover, the company will be expanding its nascent vending machine business in parts of Europe. Currently, the company has several vending machines in Portugal and Italy, where it’s selling various CBD products such as gummies. The team is already talking with vending-machine owners about expanding that business.
All profits from the online shop and the vending machines will flow directly into the Dope Growers’ DAO, the Decentralized Autonomous Organization—basically like a homeowners’ association in which everyone in the community has a vote. DAO members will vote on how to ultimately use those profits. That could mean distributing money to NFT holders or voting to invest in others projects.
Mint Information
Dope Growers’ Society expects to mint in early January. The exact date is not yet set.
There are two lists that will get early access to the mint:
- The OGs, or Original Gangsters, the earliest members of the group. There are 100 OG spots and holders of OG status will mint at 4.20 Solana (about $55).
- The regular Whitelist, of which there will be 677 spots, will mint at 5 Solana (about $65).
Those who have either the OG or Whitelist role will be guaranteed to mint one Grow Room NFT. Dope Growers will not oversubscribe either list. Whatever NFTs remain after the OG and Whitelist mint will go to the public at an as-yet-undisclosed price.
If you are interested in this project, then you should follow the team on Twitter, and register for access to the Dope Growers’ Society Discord page.
I cannot guarantee you a whitelist for this project because the supply of Grow Rooms is so tiny, just 777 NFTs. But I can tell you that not all the whitelist spots have been claimed. Pitone tells me that people who are active in the Discord community can be selected for a whitelist. Moreover, the team is running various giveaways and games that result in a whitelist spot as well.
So, there is still an opportunity to participate in the mint as a whitelist holder.
If you don’t make the whitelist, no worries. We’re in a funky market right now and you will likely be able to snap up a Grow Room NFT at or near the mint price in the secondary market on MagicEden.io, after the mint takes place.
I can assure you I will be active in the secondary market myself, since my aim is to own 10 Grow Rooms and the 30 Dope Growers PFPs I will be eligible for.
