(Photo Credit - Jason Rogers via Flickr)

Background:

Closely related to the marijuana industry is the industrial hemp industry. Hemp has been used for years for food, oils, ropes, fabrics and more, and its uses are expanding to applications like a strengthener in concrete mix. 

So, what is the next big trend in commodities? We believe it is the commoditization of hemp and marijuana. Following the CFTC announcement yesterday, the next big trend is already here. 

CFTC Approves Seed SEF LLC:

It was announced on August 23rd that the CFTC granted Seed CX, Ltd.'s subsidiary Seed SEF LLC "fully registered status with the CFTC as a Swap Execution Facility (SEF)." 

This is a huge deal in the hemp industry and the commodities industry, paving the way for hemp derivatives to start trading. Hemp derivatives are necessary for both producers and users of hemp products to manage risk and protect profits. Also, by having these transactions go through an exchange, this brings transparency and regulatory scrutiny to the market, protecting all parties. 

According to Seed CX's blog, they plan to initially launch products "including hemp seed and hemp extract." Additionally, this brings us one small step closer to the potential CFTC approval of other competing and complimenting exchanges such as Amercanex, bringing further transparency to these growing markets.

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