Legal marijuana is a $5 billion business in the U.S., and Steve Janjic figured he’d get a piece of it. With a commodity exchange. For a product that can’t be transported across state lines.
Not to worry. “It’s never easy to pioneer an industry,” says Janjic, a former foreign-exchange executive at Tullett Prebon LLC who has put $1 million into Amercanex Corp., an electronic cannabis-trading platform that handles sales of about 100 to 150 pounds of weed a week.
That’s not exactly blockbuster in a country with an estimated 20 million marijuana consumers. It may not be too bad, though, in the case of a young exchange for a psychoactive substance transitioning to legitimate, or sort of legitimate, considering it’s illegal under federal law. Janjic and other Wall Street veterans backing Amercanex take the very long view.
While only four states and the District of Columbia have sanctioned pot for recreational use, Nevada may join them after a November vote. In 23 states, the drug is allowed for medicinal purposes. Polls show a majority of Americans believe it should be as licit as beer, giving Amercanex high hopes.
“I look at this as an early Nymex,” says Richard Schaeffer, a former chairman of the New York Mercantile Exchange. “I look for this to become a very substantial matching engine bringing buyers and sellers together.”
Schaeffer, 63, is Amercanex’s chairman, and Janjic, 49, is chief executive officer and co-founder. Others from the financial world involved include futures trader Timothy Petrone, a member of Nymex and the Chicago Board of Trade, former Nymex board member David Greenberg and James McNally, who’s been a member of Nymex, the Commodities Exchange and the Hong Kong Futures Exchange.
For the record, none is a cannabis user, which is probably neither here nor there. Even the gluten-intolerant can get rich in wheat futures.
But is there serious money to be made trading the flowers and leaves of the cannabis plant? Amercanex isn’t alone in betting there will be, someday. Sohum Shah, a 26-year-old with a degree from the University of Arizona, started the Cannabis Commodities Exchange three months before Amercanex got off the ground.
CCE operates only in Colorado, which in 2012 became the first state to vote to make recreational-pot legal. Amercanex is in Colorado and California, the first to OK weed for medicinal use, and Janjic says there are expansion plans.