You know, when it comes to the cannabis industry it seems that discussions about cryptocurrencies are unavoidable. It is understandable with the banking and merchant service challenges the cannabis industry is facing that the industry would look at every alternative. Cryptocurrency and blockchain technology are exhausting to think about though, but please understand that I also think they have a value, a perceived value. I became a futures broker in 2005 which was a very grounding experience in the financial world. Truly understanding futures leads to a fundamental understanding of many other aspects of the financial world. Cryptocurrencies like Bitcoin came up in discussion all of the time when I was an active broker and an IAR, and it is still coming up now that I am covering cannabis companies. So, today we review Invictus MD Strategies Corp. (TSXV:IMH; OTC:IVITF; FRA:8IS1) a Canadian cannabis, vaporizer and fertilizer producer. They are also a subsidiary of Global Blockchain Technologies Corp. (OTC: BLKCF; CSE: BLOC:CC; Deutsche Börse: BWSP:FF).
Invictus MD Strategies Corp. just announced that they have added Gene Simmons, the KISS legend, as their Chief Evangelist Officer. This is the very essence of perceived value. Gene Simmons is just like a commodity such as corn, silver or sugar. They all have real value and then they have perceived value created from the existence of the market system and investors. Gene is being touted as the Chief Evangelist Officer. An evangelist is technically a person who seeks to convert others to various things. In this instance, Mr. Simmons is trying to make investors believers of not only Invictus MD Strategies Corp., but also by default cryptocurrency and Global Blockchain Technologies Corp.. Global Blockchain could argue that there is nothing perceived about their value since their OTC stock has a very real market capitalization of roughly $1.535 million, which is not a tremendous amount of money for a publicly traded company, but all the same is a very real value. I also believe that the blockchain technology, which is the foundation of a decentralized currency such a cryptocurrencies, is a much more secure system than the current centralized system most banks and general businesses currently use. It is that security and belief in the blockchain technology that is the source of all of its perceived value.
Let’s tie all of this together. A futures contract is actually deliverable, meaning that it is called a futures contract because there is an actual delivery date for the wheat or the oil to be delivered some time in the future. I believe that once (I truly believe this will happen) marijuana is descheduled and is accepted by the general and investing public, they will create a cannabis futures contract. So, let’s create a hypothetical where there is a 1,000 ounce cannabis flower futures contract created and each ounce is currently trading at $283. The whole contract would then be worth $283,000 and on whatever future date was set in the contract, the buyer of the contract would owe $283,000 and the seller would owe 1,000 ounces of cannabis flower to the buyer. That is all real value, but futures contracts can have massive liquidity and in all reality there is not enough of the commodity to ever make all the contracts purchased deliverable all at once. That ends up being okay because most buyers and sellers are not interested in taking delivery. Most futures traders plan on exiting the contract before delivery and just accepting the cash difference as a gain or a loss.
For those futures traders there is only their own perceived value of the contract. Cryptocurency exists only in the realm of a traders perceived value, just like most of the futures contracts traded everyday. In fact, cryptocurrency is so like a futures contract that Global Blockchain has even hired Jim Rogers, the Warren Buffet of the futures and commodities markets, as an adviser. Gene Simmons is a real music artist and has a real value, but add him to Invictus MD Strategies Corp. and he adds even more to the perceived value of the company and also to the credibility of Global Blockchain.
As reported by the Invictus MD Strategies Corp. press release concerning the inclusion of Mr. Simmons, “Gene Simmons is a branding and merchandising genius, who not only created one of the most iconic bands of all time, but has spent decades building successful brands internationally in various industries,” said Dan Kriznic, Chairman and CEO of Invictus. “Gene will lead marketing initiatives that will help spread the positive messages that dwell at the heart of Invictus in accordance with the strict regulations of Health Canada’s Access to Cannabis for Medical Purposes Regulations (ACMPR), the Food and Drugs Act (FDA) and the Narcotic Control Regulations (NCR)” said Kriznic.
“Values and family are very important to me, and when I first connected with Dan at Invictus, I understood immediately that we enjoyed a shared passion for these key life foundations,” said Gene. “Instead of launching straight into business, we talked about the things that matter the most.”
Invictus MD Strategies Corp. has a chart very similar to many other cannabis stocks. It struggled earlier this year with the rest of the cannabis sector and is now battling with its 50 dma as resistance.
However, we can see that Global Blockchain Technologies Corp., like most cryptocurrencies, is a very volatile asset. Crypto’s values fluctuate just like their investors perceived value of the concept fluctuates. Perhaps all banks will switch over to a more secure decentralized system, until then though, there is still an inherent risk with investing in something that only exists for its perceived value. There are all sorts of pump and dump schemes associated with cryptocurrencies with YouTube tutorial videos on how to do it easily accessible on the web. Companies use the enthusiasm towards blockchain technology to raise money for their companies by issuing ICOs or initial coin offerings where investors are basically buying an IOU from them. Marijuana is very real though and is already quite volatile while in its transitional phase of leaving an illegitimate market to a legitimate one. Is there a real need to add to its volatility by attaching such an unknown variable like cryptocurrencies? That is up to you.