Company setting hemp commodity prices via proprietary platform

By Hank Schultz

- Last updated on GMT

Getty Images
Getty Images
Setting firm commodity prices will be one brick in the wall of a fully legitimized hemp industry. One company has set about doing so with a proprietary trading platform.

Called PanXchange​, the company is headed by CEO Julie Lerner, who has had experience as a commodity trader with Cargill. Lerner stated her company in 2011.

Experience with sugar and sand

The company uses a proprietary platform to bring buyers and sellers together and set prices. As a proof of concept market, Lerner started with sugar trading in East Africa, and says Cargill is now one of her clients in that market.

After that initial success, Lerner branched out into the trading of sand used for fracking.  This is a niche market, one which consumers are little aware of, but one which is a critical component of the current energy mix in the United States. 

‘Frack sand’ must meet certain specific requirements to function in the slurries injected at high pressure into wells to free up hydrocarbons in tight geological formations.  It was another market that is similar to the CBD/hemp world in that there was little visibility as to what prices ought to be.

Lerner took part in a panel discussion of the emerging hemp economy at the recent NoCo Hemp Expo, which took place on March 29 and 30 at a hotel events space in Denver.  Lerner said setting prices will be a key part of the growth of the industry.

You need reliable third pricing and ideally with some historicals. It’s what you need to make go-no go, build or buy type of decisions and of course, for purchase and sales negotiations​,”​ she said.

Site excludes tire kickers

Lerner’s platform is based on restricting access to accredited users to who pay a fee to use the service. 

“This is the only system that is built by a trader for traders,”​ Lerner told NutraIngredients-USA.

When companies bid on the site, that activity forms the basis of a contract, Lerner said.  It’s a way to screen out the tire kickers who just gum up the system, she said.

Lerner has made the platform available to hemp traders since the end of January. Prices are set on what’s called “crude” and “biomass,” meaning bulk oils and harvested hemp that has yet to be processed. Even with that fairly short experience in the market, Lerner said she’s confident the prices on the site reflect the true value of the commodities.

Commodity prices starting to come into focus

“We are already confident because we have a published methodology on how we get the frack sand prices. That’s now a $120 million market and we are the leading benchmark price provider in that market. We take this very seriously because we know people are using it for their businesses,”​ she said.

Lerner said her site is mostly focused on historical information as it relates to prices on the market today.  It’s not really intended as a forward looking exercise.  So she said it’s hard to say if the CBD market is at the crest of a wave and primed for a swoon, or if the upward trend is just getting started.

“I don’t think I know enough to talk timing, but I think CBD is in a high cycle,”​ she said.

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