Will Cannabis Ever Become a Traded Commodity?
There’s a lot of questions with the cannabis industry right now and one of the biggest ones involves how cannabis moves into the world of trading.
There currently a lot of federal block heads in the way of cannabis and money. They’re issues from banking, physicality of transactions, and plenty of other issues that prevent cannabis from taking a place in the market comparable to other products.
However, we could see a future world where cannabis is traded much like coffee, copper, or other common commodities. Let’s take a look at what commodities are and how cannabis accountant integrates into today’s markets.
What is a Commodity?
What is a commodity? Well, it’s not like the cannabis products you buy and have you asking how you can start boiling carts in milk. It’s a different concept altogether.
Commodities are standardized goods that can be traded on the market. Think about things like coffee, or, and wheat. These are all commodities because they’re considerably standardized and can be interchanged on a trading market.
You can, for example, trade an equivalent value of wheat for the same value of coffee. This is because these two items are standardized and individuals making these trades know what they did stand to gain or lose by conducting the transaction.
Cannabis is not a standardized product. They’re currently just aren’t accepted standards for what quality cannabis looks like, especially at the commodity level.
This begs the question, what would a cannabis exchange look like?
What Would a Cannabis Exchange Look Like?
Once cannabis becomes legal on the federal level, we could see the cannabis exchange start to emerge. This would in all likelihood closely resemble the exchanges for products including coffee, hops, or tobacco.
Individuals will be able to purchase cannabis commodities very similar to how they trade and exchange stocks.
Obstacles Preventing Cannabis From Becoming a Commodity
The problem with cannabis being traded as a commodity is like learning how to smoke the last bit of oil in a cartridge. It’s a challenge, but if you can figure it out, then you have that much more cannabis to enjoy.
One of the largest obstacles preventing cannabis from reaching the level of commodity is a lack of standardization. There are countless strains of cannabis in a complicated genetic history of crossbreeding these plants which makes standardizing them incredibly difficult.
Cannabis has also been in a gray market for over 100 years. This means that there isn’t an established, legal, tradition growing and cultivating cannabis plants. This is another factor that makes standardizing cannabis as a commodity even more difficult.
The cannabis industry is also incredibly new. Who produces what and how much cannabis gets made are still questions that entrepreneurs and business people are working to resolve.
However, the biggest stoppage preventing cannabis from being traded as a commodity comes down to federal law.
Cannabis Trading and the Law
Going back to our cartridge analogy, the legal issue is like having oil stuck in mouthpiece of cartridge. There’s some good cannabis products there, but also plenty of hassle in the way of getting to it.
This is the big thing that prevents cannabis from being traded as a commodity. It’s currently difficult for entrepreneurs to have a regular banking account for the cannabis business let alone trade their products on the open market.
In order for cannabis to be treated as a commodity, it would need to be legalized on a federal level. This is the basic requirement that cannabis needs in order for it to reach the level of a commodity. Regardless of what happens to cannabis on the industrial and commercial levels, federal legalization is the floor for being traded as a commodity.
The Future of Cannabis Trading
There’s a lot to consider when we talk about the future of cannabis training. We need to weigh our hopes of where this industry is going with a few different factors.
One of the most positive signs that the public is overwhelmingly in support of cannabis legalization. Americans from all walks of life are in a majority support of legalizing cannabis throughout the country. This bodes well for individuals who want to see cannabis traded like a commodity
However, the institutions in place are slow to change especially when it comes to public opinion. This means that there is going to be some work ahead for individuals who want cannabis to become more commercially successful.