SXSW stage is a collision of weed, metaverse, NFTs, acid and saving the planet – PitchBook News & Analysis

When South by Southwest held its debut festival, it was a four-day music showcase of 177 artists playing 15 venues. Thirty-five years later, it reaches way beyond music and plays out over 10 days citywide on scores of stages where it gives a preview of a future that will be funded by venture capital.

SXSW this weekend is wrapping up the 2022 edition of what has exploded into a mega-event known globally for its futuristic exploration of art, media, technology, sports, wellness, politics and activism.

A launch pad for ideas, brands and personalities that later become household names, SXSW each year draws tens of thousands of people to Austin seeking forward-thinking solutions and novel approaches to big problems.

Which is to say that the event has secured its place as a vital part of the venture capital ecosystem and its ever-optimistic quest to create the future of everything. And this year's installment has been no exception, featuring experts delving into some of Silicon Valley's biggest passion projects, from crypto and climate science to the metaverse and psychedelic drugs.

The return of SXSW following a pandemic hiatus also comes at a time when the city of Austinthanks in part to the festival itselfstars in another drama that hits home for the VC ecosystem: The rise of hot new metropolises winning over tech and other corporate leaders seeking locales that are more accommodating of their business and personal ambitions.

Conference visitors who were trying to plan out time slots in the packed schedule could be forgiven for feeling that they had to choose between equally buzzy but competing sessions: one could be about saving the world from climate change, the other about saving musicians' profits through shrewd use of NFTs and decentralized platforms.

It's a boom time in so-called Web3 innovations that empower musicians and other artists to claim economic control of their brand and intellectual property outside dominant channels owned by publishers and companies like Spotify.

Non-fungible tokens, or NFTs, created by artists are grabbing much of the spotlight, especially at music-crazy SXSW. The blockchain-based tokens can certify ownership and authenticity of digital creative assets and even physical ones (like an artist's branded merchandise). Musicians are tapping into them for a sizable revenue stream of royalty payments for sales of their branded work on secondary markets.

Kelsey Byrne, the singer-songwriter also known as Vrit, is one of them. Byrne educated herself on tokens during her own pandemic isolation and emerged with a rising name in music but also a knack for using NFTs to make a sustainable living as an indie singer. "The whole point of this is to work outside the system," she said on a panel.

Another panelist told of several artists with small followings who've been able to rack up meaningful revenue. "You can have less fans but make more money," said Sam Hysell, co-founder of digital media company NFT Now. The model is taking off. In December, investors valued NFT marketplace OpenSea at over $13 billion in a $300 million VC funding round.

Take weed. Organizers programmed at least 20 panel discussions or featured speakers on the topic as seen through issues including racial equity, regulation, consumer products, social change and international markets.

Investment in VC-backed cannabis companies retreated to $2.8 billion last year from its high point of $3.6 billion in 2019, according to PitchBook data. Investors are taking aim at the world cannabis market estimated to be worth more than $32 billion last year, mostly concentrated in North America. But opportunity for weed businesses in other world regions looms large, with 50 countries (not counting the US) having created legal cannabis markets on a national level, according to Prohibition Partners, a UK-based cannabis research firm.

"I think that provides an amazing opportunity, but it also leaves a question mark as to when the US will join the ranks," said Stephen Murphy, managing director of Prohibition Partners, who moderated a panel looking at the global pot business.

Another dozen or so other talks focused on the future (and present) of psychedelics: Psychedelics in wellness. As a market opportunity. In public policy. In tourism. Even in Judaism.

One of the best-attended panel discussions this year focused on the prospects for psychedelics to treat severe depression, PTSD and behavioral disorders. Such therapies remain on the fringes of Western medicine. But authoritative research is gaining traction, of course with Silicon Valley VC funding, among companies such as therapeutics specialist Atai Life Sciences, which is backed by Peter Thiel and recently got federal approval to do a clinical trial of a non-psychedelic form of ketamine intended for use as an antidepressant.

Another high-profile adherent is the influential entrepreneur Tim Ferriss, who took to the SXSW stage with a group of eminent psychologists to share intimate details of his experimentation with ketamine in his own battle (with "life-changing" effectiveness, by his own account) against chronic depression.

Outside the meeting hall, a passerby's T-shirt read, "Make Acid Great Again."

Regardless of how seriously you view the use of psychedelics in medicine, it's clear watching Ferriss speak that he has done his homework on the research and can hold his own delving into the scientific minutiae alongside some of the field's top experts.

Ferriss and his co-panelists like Roland Griffiths, a Johns Hopkins University pharmacology professor, said they see much promise in clinically supervised treatments through altered states of consciousness, but they also plainly acknowledged that modern medicine is in its infancy of truly understanding psychedelics.

To Pico Velasquez, a designer whose work has straddled physical and virtual dimensions, the power of the metaverse is to capture "beautiful intricacies of this world." But she also maintained it's not just about games or entertainment.

"Instead," she told one session, "it's an evolution of our lives, the future of work, the future of culture. The future of absolutely everything is going to get transported into this new space."

Some efforts to demonstrate the idea didn't quite land. At a late-night party thrown by Blockchain Creative Labs, an NFT-focused startup studio backed by Fox Entertainment, guests were invited into a pop-up exhibition that was meant to evoke the dazzling imagery associated with highly stylized digital environments. It was basically a flashy electronic installation on the walls.

At a demo kiosk for Qualcomm-owned chip designer Snapdragon, visitors could create their own digital avatars having their likeness scanned using face- and body-recognition software. My avatar, showing a fully bald man, was totally unrecognizable, but it did at least allow me to show I had a receding hairline of my own, using any color of my choosing.

Featured image of the Blockchain Creative Labs exhibit by Alexander Davis/PitchBook News

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SXSW stage is a collision of weed, metaverse, NFTs, acid and saving the planet - PitchBook News & Analysis