GreenTree, the parent company of Amercanex, also owns the American Hemp Exchange, Inc. (AHE). AHE utilizes the backbone of the ACExchange platform for the transaction of industrial hemp and its associated products. It will maintain a similar revenue model to Amercanex, one of selling exchange seats, charging transaction fees and warehousing data to package and sell to the global broker community. ETTAS will also be a component of the reporting features found on the AHE platform.
While ACExchange is strictly enforced on a state-by-state basis, the hemp market will immediately provide for interstate commerce. The scalability and backbone of the platform allows for the full launch of the hemp exchange on a national and potential international basis.
Industrial hemp is an agricultural commodity that is cultivated for use in the production of a wide range of products, including foods and beverages, cosmetics and personal care products, and nutritional supplements, as well as fabrics and textiles, yarns and spun fibers, paper, construction and insulation materials, and other manufactured goods. Hemp can be grown as a fiber, seed or other dual-purpose crop. Some estimate that the global market for hemp consists of more than 25,000 products. Precise data is not available on the size of the U.S. market for hemp-based products, but current industry estimates report annual sales at more than $580 million annually. (Source: Congressional Research Service: “Hemp as an Agricultural Commodity”; 2-2-2015).
The Industrial Hemp Farming Act of 2015 (H.R. 525) amends the Controlled Substances Act to exclude industrial hemp from the definition of marijuana. H.R. 525 was reintroduced in January, 2015 by Congressman Thomas Massie (R-KY), Congressman Jared Polis (D-CO), along with a bipartisan coalition of 45 lawmakers introduced federal legislation that requires the federal government to respect state laws allowing cultivation of industrial hemp. Senate Majority Leader Mitch McConnell cosponsored the Senate version.
Currently, legislation that would require the federal government to respect state laws allowing cultivation of industrial hemp is separate and apart from H.R. 525 and that legislation still remains in committee.
ACE aims to become the electronic wholesale transaction platform of choice in the global industrial hemp space. GreenTree believes that hemp is first and foremost a commodity and is considering registering with the CFTC as a Swap Execution Facility (SEF). A SEF is an electronic trading platform designed to provide pre-trade price transparency, improved market efficiency and execution services for eligible market participants resulting in reduced systemic risk. In addition, transactions on SEF’s provide a full audit trail for the regulators. As the market develops and to ensure certainty of transactions, trades will ultimately be required to be cleared through a central counterparty.
SEF’s are central hubs that connect multiple buyers and sellers electronically. For additional information, view the diagram below: