Commodities market launches for Colorado marijuana
A Cannabis Commodities Exchange for Colorado marijuana retailers launched in April as an online marketplace for wholesale transactions of cannabis flower and cannabis products for its members, the exchange announced last week.
Eventually, information gathered through the exchange will allow for the creation of a futures market and allow licensed businesses to trade cannabis just like corn, soybeans, or any other agricultural commodity, the founder of the exchange said.
Because the cannabis industry as a whole is undeveloped, a number of supply-side issues are commonly found in state-regulated marijuana programs, according to founder Sohum J. Shah.
“Marijuana cultivators and products manufacturers often fall victim to poor harvests, inconsistent testing results, and regulatory intervention,” Shah said. These pitfalls affect all growers and producers, regardless of expertise, and are constantly limiting the supply of inventory held by marijuana dispensaries, he said.
Currently, licensed marijuana businesses typically resort to calling other licensed establishments in their industry network in order to resolve supply and demand issues.
As a result, establishments are left with a limited variety of inconsistent quality cannabis and are often forced to pay top dollar for inferior products out of sheer desperation to meet demand.
“We want to solve these problems by offering licensed marijuana businesses a user-friendly online platform where they can interact with the entire licensed marijuana business community to solve their supply issues,” Shah said.
Using the exchange, licensed marijuana businesses can list their surplus, post requests for specific strains or products, and browse, filter, or search listings to manage their inventory.
The website allows users to easily search through listings by utilizing recognizable symbols, color-coding, detailed filters and intelligent search logic.
“They can talk about listings with other members using our encrypted messaging service, which will deliver the message simultaneously to both the user’s inbox and smart phone,” he said.
After utilizing the messaging service to agree on a price, users can confirm the deal and print a receipt of the transaction for their records.
The application also automatically updates the listing if less than all of the quantity offered is purchased.
Shah is also negotiating with a local courier service to provide flat-rate shipping throughout Colorado on all transactions made on the cannabis commodities exchange.
“Our advanced, back-end database collects transaction and listing data from users such as historical prices for various strains and products, seasonal trends, and user historical activity,” Shah said.
Users can analyze this data to make informed trading decisions and increase profitability in its operations, he said.
Eventually, this information will allow for the creation of futures market and allow licensed businesses to trade cannabis just like corn, soybeans, or any other agricultural commodity, Shah said.
Visit cannaxchange.com for more information.