Amanda Luketa   |   August 08, 2018

Digital Marketplaces for Cannabis and Hemp

Global trade is opening up as a possibility within the rapidly-evolving cannabis and hemp industries. Take an in-depth look at IT-driven trading platform CMTREX, as well as three other up-and-coming digital marketplaces.
Amanda Luketa is a freelance technical writer and former cannabis industry mechanical engineer. She believes strongly in helping others, federal legalization, and the power of curiosity. In her free time, she enjoys rock climbing and yoga.

CannabisTech sat down with Saul Singer, CEO, and co-founder of CMTREX, to discuss how online trading can meet the urgent needs within the cannabis and hemp industries. CMTREX aims to provide a B2B digital marketplace to offer efficient, secure, transparent, and compliant trading options for both sectors. The company is set to launch a series of products over the next 18 months which would likely improve upon current methods for buying and selling hemp and cannabis on a global scale.

The Vision Behind a Digital Marketplace

“I think it’s important to differentiate between what technology can bring to the cannabis industry going forward, and what market participants actually require today,” says Singer of the need for a digital marketplace. “What I’m hearing from active growers and processors in the market is: we know how to produce the product, but we really need a better means to market and sell the product - not today, but yesterday.”

Within this vision in mind, the goal for CMTREX is a “fully integrated, exchange-based trading system with all the bells and whistles: whether that’s derivative trading, instruments, financial liquidity, or IT-driven authentification processes. Suppliers are really crying out for the ability to market their inventory to as many relevant buyers as possible. This is what CMTREX is going to be focused on in its preliminary stages of services,” Singer states.

Current Legal Challenges

“The biggest question,” Singer says, “surrounds the legal challenges involved with this market, particularly with high-THC products. [Cannabis] is not traded over any real exchange,” says Singer.

To help meet these legal challenges, Singer decided to found CMTREX in Israel, a world leader and innovator in cannabis research and development. Israel is among a handful of countries whose government wholeheartedly supports cannabis research, with cannabis being legal for specific medical uses and recently decriminalized for recreational use.

Being located in Israel has allowed CMTREX to adopt a collaborative partnership model with other organizations, specifically iCAN, to promote further research and development within the trading space.

Exports are the next frontier beyond legalization. Uruguay, Canada, and the Netherlands currently allow for the legal export of cannabis, with cannabis being either federally legalized or decriminalized in all three countries.

“The evolving story of legalization within the cannabis industry is not necessarily a US-centric story. Rather, I think this story has a very global narrative. The US at the moment consists of fragmented markets, with different rules and regulations across different states,” Singer says.

The Future of Cannabis and Hemp Trading

While the CMTREX platform is still in its beta-testing stage, Singer says the company plans to roll out three key products within the next 18 months: a digital B2B marketplace for cannabis and hemp, as well as a tender service and a brokerage service.

“There are a number of key paradigm shifts currently taking place within the market,” states Singer.

“Obviously the biggest shift would be going from an illicit to a legal market, but there are a number of other paradigm shifts happening with research, authentification, and testing spaces as well,” he continues. “Here at CMTREX, we’re looking to start another paradigm shift to move from a very bilateral, over-the-counter, 1:1 transaction model with one supplier and one buyer, to a more efficient mode of trade: initially one-to-many, and eventually many-to-many base transactions.”

Lastly, CMTREX aims to address the issue of price transparency lacking within the hemp and cannabis markets.

“The other piece that’s integral to the CMTREX platform is the sophisticated data capturing and data learning layer that sits behind the transactional layer,” says Singer. “From a stakeholder perspective, this allows for a real-time snapshot of the state of the given market in terms of pricing and demand. And when we speak about price transparency, it’s not really apparent within the industry yet - though it’s moving that way.”

In February of this year, CMTREX signed agreements with both Theracann and New Leaf Data Services to further the advancement of authentification standards and transparent trading within the cannabis and hemp marketplaces.

Other Players in the Digital Marketplace

Take a look at three other companies spearheading the effort to create online trading platforms for the hemp and cannabis industries.

PanXchange

Focusing on the hemp commodity trade, PanXchange draws from a successful background in the frac sand and East African agricultural markets. Their hemp trading platform is currently live and uses independently-verified data. PanXchange aims to expand into the isolate and distillate in the near future.

Amercanex

An online trading, payment, and tracking platform, Amercanex provides licensed wholesale stakeholders, growers, and manufacturers with transparent prices within the cannabis industry.

iHEMPx

The International Hemp Exchange, or iHEMPx, provides wholesale and retail buyers and sellers within the hemp space access to a platform to facilitate trade.

 

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