You probably know all about virtual currency by now: Bitcoin, XRP, Litecoin, and all the other startups that periodically make the headlines. While the concept can be difficult to wrap your head around, in essence those virtual monies act as an alternate way to exchange goods, services, or other things of value. And because they’re decentralized and largely unregulated, they allow users to circumvent many of the downsides of trading in real money, such as a loss of privacy or transaction fees.
Whether or not you use it, virtual currencies are having a major effect on the ways we do business. Now, a virtual approach to cannabis cultivation looks to do the same thing for the global cannabis industry. Welcome to the world of crowdgrowing.
Could Crowdgrowing Help You Launch Your Brand? An Introduction
Crowdgrowing—sometimes known as e-growing—is a movement that aims to link virtual cannabis farmers—sometimes known as “couch growers”—with real-life cannabis cultivators. At its heart, the system is admirably simple: Virtual farmers purchase a virtual cannabis plant; the money they invest goes to fund the cultivation costs for the real-life farmers. When the crop is harvested and sold to a business in the legal cannabis supply chain, the profits are distributed to the investors.
The first cannabis crowdgrowing platform is called Juicy Fields. While the company’s story began in Spain back in 2017, it’s currently headquartered in Berlin, from which it launched the platform in March of 2020. The cannabis is grown in several sites around the world, including Columbia and South Africa. The cannabis that’s cultivated goes to legal medical supply chains, with four strains currently listed as available for investment on the company’s website. According to the company’s website, its products are aimed at medical cannabis supply chains in Europe and Canada. In terms of purchasing Juicy Fields products for your own consumption, the site makes mention of a proprietary line of vapes offered in varying cannabinoid ratios, but no word on where they might actually be available.
What’s the appeal? For one thing—as you most likely know—the economic and regulatory barriers to entering the cannabis industry are dauntingly steep. Despite forward-thinking social equity programs—like the one recently instituted in Oakland, CA—the licensing costs associated with launching a legal cannabis brand typically range from around $1200 to over $44,000 (as cited in Juicy Fields’ “greenpaper”). And of course, that doesn’t take into account the startup costs of launching a brand (not to mention the stiff competition when it comes to getting your product in front of dispensary buyers).
The Juicy Fields platform is open to crowdgrowers 21 years old and up, with a minimum funding of 50 Euros (the platform’s base currency). That said, other formats, including virtual currencies, are accepted as well. Under current U.S. tax law, virtual currency is treated like property, so it’s only subject to capital gains taxes if and when you sell it for a profit.
Could Crowdgrowing Help You Launch Your Brand?
Interest in Juicy Fields is, well, quite high. And there’s no reason to believe the model couldn’t work here in the United States. In fact, there are direct precedents in the world of small-scale agriculture: Using a co-op model first formulated over 150 years ago in rural England, farmers and other participants in the supply chain can band together to raise capital, minimize personal financial exposure, and leverage the power of a crowd to bring a product to market. Given the steep licensing and start-up costs we referenced earlier, one could argue there’s never been a better time than to apply this model to the field of cannabis cultivation.
Of course, there are other ways to take advantage of the early groundswell of support for crowdgrowing. If you’re not in a position to open up the floodgates to the system’s virtual investors, you can still generate enthusiasm and support using nontraditional techniques such as influencer marketing, as well as following some best practices for launching a cannabis brand.
Are you looking for idea-starters of inspiration? Drop us a line; we’d love to help!