So just some food for thought, I figured I'd post it here. What do you think of the likelihood of Marijuana becoming a financial commodity via derivative securities? Just like any other commodity such as coffee, sugar, beans etc, the price is practically controlled by the market. Unlike many of those commodity derivatives frequently traded on the market, Marijuana can be grown anywhere in the world with artificial conditions, thus, making competition much more fierce than with other commodities. Post your thoughts....
I dont know about the liklihood but I would like to see this become a reality, as well as with hemp. Hemp is badass.
The problem with that is the problem that is currently plaguing the states where its legalized. Its on the list of controlled substances which prohibits trade physically or financially. Right now all the Feds are doing is turning a blind eye for the most part. They have not solved the problem. If a transaction was to be made that crosses state lines which they all do you just committed a felony which the entire legal apparatus of the United States can act upon...that includes the IRS. Its why in the legal states those guys deal with cash for the most part, banks won't give small business loans, VISA/MASTERCARD, AMEX will not allow transactions to occur on there network. The SEC will not allow trade in that from of commodity. As for competition say it was legalized and traded as a normal good the individual market won't have a impact. The big name companies will grow this in mass. Pigs, Chickens, Cows can be grown at your house right? Do they make a impact on the prices of those commodity's? No over 90% of those products are farmed by a handful of corporations. Same for virtually everything else. Before anything like that is even a far fetched dream it must be removed from the Scheduled List of Controlled Drugs and that seems highly unlikely anytime soon or even in the next 10 years. Then you have the issue that most nations mirror our laws since if you do not we have the muscle to punish you. So getting MJ legalized here in the US is crucial to world wide legalization.
I agree with what you're saying but unlike pigs or cows it doesn't take $1 million to make $1million with marijuana.The substance itself would have to be freely bought and sold for any of this to happen but that idea isn't completely far fetched...maybe a few decades from now.Regardless of what you're producing, inflation is going to increase the cost, unless efficiently produced and sold, making futures and options contracts more enticing to investors