I’m a wholesale buyer for an MSO and been buying cannabis for years. Why do I need this?

This week, you probably don’t. In 12 months, every MSO in the country will. The strategy here is to create a centralized, state-by-state platform that all state licensed producers and manufacturers trade on. These platforms will also likely be the single point of taxation and regulation. This likely won’t be optional.

Is this auto-execution?

No, there are no market makers and there are no short sellers. Bids and offers are managed on the platform, price first, then the specifics of cultivar worked out in a few seconds on the platform.

How, exactly, is this priced?

Think about chocolate and 3 ingredients. Cocoa, butter, sugar. Pretend we fix the cost of butter at $1.00, Sugar at $.50. Doesn’t matter what they actually are worth; everyone agrees to the same assumptions. We don’t fix the price of cocoa so there is always one degree of freedom. You want to buy chocolate from 3rd parties to rebrand or blend into your own product and are willing to bid $2. Trade executes at $.50, chocolate is delivered in 3 months, pricing equation is solved in reverse, $2.00 gets paid. State chocolate regulators have 100% transparency into every transaction, taxes collected, and everyone has a centrally trade-able, centrally observable, single price trading mechanism.

I own my own farms, why do I need this?

Right now, it looks like the regulatory landscape will be divided up into consumer facing side of the industry and the manufacturing side of the industry. If states mandate central trading, you will be “buying” from yourself just like you normally would but everything is going centrally traded, this is just the least complex way to trade a very complex agricultural product.

Is this exchange traded?

100% no. There are no individual investors, no speculators, no short sellers. Everyone is already licensed and known to everyone else on the platform. You always know who you are buying from or selling to. This is also a key selling point to state regulators who may be hesitant: make cannabis legal in your state and make central trading the required touch point of regulation and taxation.