When the world gets closer.

We help you see farther.

Sign up to our expressly international daily newsletter.

Already a subscriber? Log in .

You've reached your limit of one free article.

Get unlimited access to Worldcrunch

You can cancel anytime .

SUBSCRIBERS BENEFITS

Exclusive International news coverage

Ad-free experience NEW

Weekly digital Magazine NEW

9 daily & weekly Newsletters

Access to Worldcrunch archives

Free trial

30-days free access, then $2.90
per month.

Annual Access BEST VALUE

$19.90 per year, save $14.90 compared to monthly billing.save $14.90.

Subscribe to Worldcrunch
Economy

Crypto And Cannabis, Best Buds At Last

As cannabis is legalized in more places, investors are taking note. One Luxembourg-based, Uruguayan-led fund has found an innovative way to bypass banking obstacles and raise capital.

A jar of weed

Marijuana is the most commonly used addictive drug after tobacco and alcohol, according to the U.S. National Institute on Drug Abuse.

Natalia Vera Ramírez

Soon it will be possible to buy shares in a fund that invests in the nascent cannabis industry, on Ethereum, a blockchain portal. The fund is Global Cannabis Capital (GCC), formed in Luxembourg and soon to offer shares as tokens (digital value units representing the value of a stock), instead of the traditional initial public offering (IPO).

GCC's founder is the Uruguayan Andrés Israel, also CEO and founder of Cannabis Company Builder (CCB), an incubator that helps Latin American startups devise a business strategy for the cannabis sector. He said tokens were "a much more efficient channel for attracting capital" than share issues, and legal frameworks already exist covering their use. The legalities, he said, were "one of our major challenges. We chose Luxembourg as we found legality both in the blockchain sphere and the cannabis industry. It was a double challenge for us."


GCC has 30 firms in its portfolio and aims to raise capital through token sales whose proceeds are to be reinvested in its portfolio. The main objective, said Israel, is to "do it in a diversified manner, both in the various verticals of the cannabis industry and in different world markets, and put together an absolutely diversified portfolio. Our projection is to have 60 firms in the portfolio by mid-2023, before floating Global Cannabis Capital on the Luxembourg stock market. It can either be a public firm in that country or our token can become an index or an ETF (Exchange-Traded Fund) of the cannabis industry."

Blockchain to fund growth

The first sale, scheduled for early June, is a private placement, so GCC could not reveal the price of a token or the sums expected to be raised. But investors were showing keen interest. "Before this we held a pre-sale in which all our tokens were sold in 10 days. This is highly auspicious, as we expected to end the pre-sale in June," Israel said.

Some 50 investors bought all available tokens and for 80% of them, this was their first investment in a cryptocurrency or in digital assets.

Israel explained that a token gave you a stake in GCC and its value was backed by GCC's portfolio valuation, which was in keeping with its stake in other firms in the sector. He said that all money raised by token sales was reinvested to boost the GCC portfolio — and every token's value. "What I can say is that the firm's valuation is currently at $25 million," he said.

The firm will create 100,000 tokens, which will be its entire stock capital, to be offered in stages over three years before the fund's listing on the Luxembourg stock exchange. The first private placement will sell off 6% of all tokens.

A woman checking cannabis plants.

Cannabis can be grown for medicinal purposes, like in this facility in Ecuador.

David Diaz Arcos/dpa/ZUMA

Solution to banking obstacles

Using tokens or crypto-assets is an increasingly common way of raising capital in the cannabis sector. In addition to legal restrictions on cannabis in many countries, which hinders public listings or more traditional fundraising, many actors in the sector see blockchain technology as a faster financing instrument.

A much more liquid model.

For buyers, says Israel, tokens also open the way to a secondary market for resale, giving their assets liquidity. "Funds generally need five to seven years for limited partners to recoup their investment. We have a much more liquid model because through our technology, once investors acquire the token, they can sell them on the secondary market. It is very important for us to generate a large volume of investors, because we are generating this secondary market and need big numbers," he said.

In parallel with GCC, the incubator firm CCB is working on industry projects not yet mature enough to receive capital. Its focus is on finding projects relating to research and development, genetics, final products, branding and in brand creation both in the cosmetics and pharmaceutical sectors. CCB currently has seven cultivation projects of this type, limited to Latin America.

GCC on other hand is aiming for global-level investment. Israel says: "We're going to diversify the geography to invest in Canada, California, Colombia and Switzerland. We'll go to more advanced countries in terms of legislation. We want to be a push factor as cannabis firms currently have a financing problem. Most venture capital firms do not invest in cannabis startups, simply because at the federal level it is not yet legal in the United States. There are banking obstacles that are a break on the industry, and we're trying to lift that with GCC."

You've reached your limit of free articles.

To read the full story, start your free trial today.

Get unlimited access. Cancel anytime.

Exclusive coverage from the world's top sources, in English for the first time.

Insights from the widest range of perspectives, languages and countries.

Ideas

The Unifying Power Of Art In A World Divided By Religion And Morality

Political battle lines are becoming increasingly entrenched, and opposing views are being pushed towards ever greater extremes. Language has become a battlefield. If morality pushes us apart, and religion does not help in the process, we may find a solution in our sense of humanity, writes German psychiatrist Manfred Lütz in Die Welt.

The Unifying Power Of Art In A World Divided By Religion And Morality

Eugène Delacroix - La liberté guidant le peuple (1830). Commemorates the French Revolution of 1830, also known as the July Revolution.

Manfred Lütz

-Essay-

BERLIN — In the Middle Ages, people didn’t read texts about the meaning of life. Most of them couldn’t read at all, and they saw the meaning of life in the images in their churches. Academics have recently started speaking about the “iconic turn”, the return of images, and it is true that the Instagram generation prefers to communicate visually. Could pictures offer a way for our deeply divided society to come together once again?

For the latest news & views from every corner of the world, Worldcrunch Today is the only truly international newsletter. Sign up here.

Both in terms of foreign and domestic policy, political views are becoming increasingly entrenched, and on both sides of the debate, opposing views are being pushed towards ever greater extremes. In the world of today, many people are cut off from any contact with those who think differently, living in echo chambers, surrounded by people who confirm their worldview. When those who disagree with their position condemn them from a moral perspective, this only serves to vitalize the group under attack.

The public pillorying that dominates social media can be a cause of great anxiety for individuals. But for those who feel they are part of a community, their fear often transforms into an aggressive form of self-defense. The topic itself isn’t as important as the sense of being attacked.

That is a possible psychological explanation for a strange phenomenon, whereby attacks on groups such as the right-wing Alternative for Germany (AfD) party and some of their individual members have strengthened the sense of community within these groups and brought together a surprising mix of people, from radical free marketeers to nationalists, conspiracy theorists, pro-lifers, COVID deniers, right-wing extremists, conservative Christians and racists.

They are united by a single experience, that of being excluded. Conversations within these groups are reminiscent of chats around a pub table: the more harshly someone criticizes “those in power”, “the lefties”, “right-wingers” or even, “the others”, the more likes they get.

Keep reading...Show less

The latest