Yes though an intense about of LUA scripting is involved.
For NPC's you make them similar to Decals and have them always facing. They will be either static or consistently animate. Unless we have new commands that can effect shaders so we can use an atlas for sprite enemies.
Here is a (terrible) example i did before i knew LUA, 2 years ago:
I intend to do a better mock up with what I know now. So that they can walk around.
For weapons you could just use a single plain mesh. Or you could overhaul the weapon system entirely by using sprites in LUA.