NEW YORK (MainStreet) - Although Amercanex is currently a mere match-maker between cannabis grows and dispensaries with offices in Colorado, Washington and California, its founder has a bigger vision that involves launching an international marijuana commodity exchange.
"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 CFDs with which people can speculate on the price of marijuana," said Steve Janjic, CEO with Amercanex.
However pundits aren't convinced of the immediate feasibility of Commodity Futures Contracts for Difference (CFD).
"For a cannabis commodity exchange to succeed and be a true platform, investors need it to be a bigger market for trading because options are based on future products and sales," said Michael Swartz, analyst with Viridian Capital & Research. "It comes down to regulation. If more markets open up, you'll have bigger demand, activity and more buying and selling in those types of products." Although federal laws around marijuana will have to change dramatically before Janjic's dream of a marijuana commodity exchange can come true, he's already building the infrastructure for a brick-and-mortar exchange in New York to be prepared once marijuana is declassified as a Schedule 1 drug or in the event that the plant is suddenly legalized.
"Any of the existing exchanges will be able to connect to us in hours and have all that 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 sold out they will have to buy a seat from members or lease a seat on the exchange to transact," said Janjic. Much like eBay, the marketplace division of Amercanex was initiated in June to service dispensaries such as Red River and The Clinic.
"We don't touch the physical product," Janjic said. "Instead, we provide for the entire transaction then a delivery service or stored facility takes it from there after a seller posts the product they have for sale and a dispensary purchases it." Internationally, however, Amercanex may face obstacles in launching a commodity exchange. "They have serious treaty laws to worry about," said Robert Hunt, partner with Tuatara Capital. "International treaties still supercede even state and federal law until you can navigate unwinding 30 to 40 years of treaties with foreign countries on controlled substances."
But Janjic is undeterred and even convinced of the validity of his vision.
"These binary products will be available in the marketplace in the next 90 days to six months," Janjic said. "They will be traded out of the U.S. where there are no treaties to be concerned with."
Until then, Amercanex is content to charge a standard 22 cents a gram across all transactions on the site for trim or high grade byproduct and looking forward to launching in Canada in January.
"We also allow trading of oils, waxes and over the next few months we will integrate baked goods," said Janjic. "Canada will be a huge marketplace for us because in Canada grows are able to sell to the retail public not just dispensaries."
--Written by Juliette Fairley for MainStreet