Marijuana federal laws will have to change dramatically before a marijuana commodity exchange can become fully operational, but there are already two businesses that have launched in preparation of that day—Amercanex and Cannabis Commodities Exchange.
“The notion of a commodities market is so far removed from where we are right now in the marijuana legalization movement,” said Mara Felson, an attorney in California. “It would be a wonderful thing, but it’s hard to envision because marijuana is still illegal federally. Until it’s removed from Schedule 1 status, I don’t see a cannabis commodity exchange taking off.”
Amercanex CEO Steve Janjic is undeterred by the law and convinced of the validity of his vision happening now. “We were approached by several of the largest off-shore foreign exchange brokers to provide them with the data stream of cannabis pricing and indexes so they can build binary options or Contract for Difference (CFD) derivatives with which people can speculate on the price of marijuana,” said Janjic. “These binary products will be available in the marketplace in the next 90 days to six months and traded out of the U.S. where there are no treaties to be concerned with.”
Until then, Amercanex is an online matchmaker for growers and dispensaries charging 22 cents a gram across all transactions of trim and high-grade byproduct with offices in Colorado, Washington and California.
Instead of initiating a commodity exchange from the top down, the Cannabis Commodities Exchange differs from Amercanex in that it is building an exchange from the bottom up. “We are building a concrete business-to-business wholesale service before branching off into exchange trading but we do not warehouse any product,” said Sohum Shah, chief operating officer of the Denver-based company.
Like Amercanex, the Cannabis Commodities Exchange also launched this year, but has 30 users who operate 50 businesses with multiple cannabis licenses. “We do see, at some point, derivatives being traded in cannabis and on our exchange, but we would need some type of standard industry-accepted grading system to price and define batches based on their characteristics,” Shah told HIGH TIMES.
Currently, neither the government nor testing labs have issued industry standard grading of the various cannabis strains available. “Once testing labs are able to define strains, we envision trading cannabis contracts based on cannabinoid profiles and terpene profiles or a combination of these two profiles,” Shah said. “That’s how strains are graded.”
In the meantime, Janjic is already building the infrastructure for a bricks and mortar exchange that will be located in New York.
“Any of the existing exchanges will be able to connect to us in hours and access all our data,” Janjic said. That infrastructure includes 22,000 virtual seats that are selling for $5,000 a piece. Some 2,200 have sold so far.
“Investors feel purchasing the seats now gives them an edge because once the seats are gone they will have to buy a seat from members or lease a seat on the exchange to transact,” said Janjic.