Opinions and Legal Insights

What Happens When Cannabis Becomes A Commodity?

I’m often asked to comment on whether or not cannabis will ever truly attain the status of a commodity. While the answer has generally been yes, we have a ways to go.

First of all, it’s necessary to understand what exactly a commodity is. For our purposes, and in the context of cannabis, we’re talking about a raw material or primary agricultural product that can be bought and sold. Modern examples of commodities include copper and coffee.

In order for cannabis commoditization to come to fruition, you must have standardization. While there are many efforts at standardizing hemp and marijuana crops, like ASTM International and FOCUS, there are currently no existing universal standards. This is critical because a commodity requires that such a basic good used in commerce is interchangeable with other goods of the same type. Furthermore, commodities are most often traded on exchanges and presumed to meet specified minimum standards.

Read the full article on Forbes

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