By Brad Weissberg/Dec. 10. 2017
Michael Herron is the president for U.S. markets of Amercanex, the first fully electronic marketplace in which wholesale and retail distributors of cannabis can buy and sell their inventories. CannaTechie spoke with the innovator to discuss how Amercanex’s ACExchange platform will disrupt the current way cannabis products are bought and sold.
When did you start the company and why?
A: We started in 2014. My team and I are experienced Wall Street professionals and we’ve worked in the financial markets for decades. We looked at the world of cannabis as an opportunity to translate our experience and technology solutions to the cannabis marketplace. We saw cannabis as an over-the-counter under-regulated market and thought the only way for the industry to expand and become legitimate is for the federal government and subsequent states to treat it as an agricultural-based commodity.
Can you describe Amercanex’s role in the cannabis industry?
A: We’re a one-stop-shop for retailers, cultivators, manufacturers and distributors to come into an open environment to buy and sell their goods in a transparent and compliant fashion. Think of us the ebay of weed for wholesalers complete with a carfax report and a PayPal system.
Can you explain how the Amercanex trading platform works?
A: We felt that if there was a system that had its roots on Wall Street and incorporated that with state-of-the-art technology and programming infrastructure,the software would rival all the financial marketplaces that are out there. The cannabis market gave us an opportunity to cast the biggest net. Ultimately, these technologies will translate into other markets such as launching a crypto currency exchange, utilizing blockchain and launching our own future and options exchange. This includes strain-specific cannabis and hemp and eventually we’ll get into other markets such as water, biodiesel, credit trading and others. Our exchange can be used for sourcing other commodities such as hops and material that goes into medicines.
Can anyone trade on the platform?
No. We sell membership-seats on the exchange. Think of it as a membership, you have to join to use our platform. There’s a finite number of them— 8,000, of which 4,000 have already been sold. We sell them for $10, 000 one-time-fee currently and anticipate raising that price sometime next week. We also will allow seat-owners to lease their seat to licensed business; the current rate is $99.
Can you explain how ACEpay works?
A: We launched in Denver 2015 but we found quickly, that much like ebay, we could not settle the transaction. Ebay solved their problem by buying PayPal, but a PayPal does not exist for our industry so we utilized our experience and understanding of compliance and applied that to a solution. We partnered with a bank and a credit union and created a platform, which connects our Acepay product, which is an eWallet. It works just like ApplePay but it utilizes blockchain. We make sure all our members are licensed and compliant and we provide this entire closed-loop ecosystem to law enforcement, free-of-charge so they can see that everyone is legal and compliant.
Are there other services?
A: Yes. We make sure all data from lab testing is available and updated in real time. We tie in our transportation solution. We meet with State tax boards to track tax collection and capture it and explain that money can moved by a digital fashion instead of cash, solving the issue of public safety and collection.
Is the data you collect reported to the government?
A: The reality is we built the backend of our platform first. What we did know was the reports we wanted to see. We know what’s complaint and what is not when it comes to handling the commodity and the cash. Be built in the reporting all the way down to where it can be loaded into QuickBooks. An account can see everything and everything is tracked.”
Can you tell us about how AceTrack?
A: AceTrack is a white-label version of track-and-trace products. Our marketing partner is Adilas and it’s integrated into our platform.
What is the business model?
A: We make our money from a transaction fee. Transaction fees run from one percent to five percent based on the dollar volume when it comes to flower. In Colorado, we are limited by the Marijuana Enforcement Division (MED) and have to charge a flat-fee regardless of size. We have an eWallet charge and it’s typically 2.95 percent. AceTrack is fee based; on average cultivator pays about $150 a month for AcePay. We also get a percentage of fees collected when a customer utilizes AcePay.
Is your data for sale?
Yes. We’re also working with two major data-collection firms to pack our data and sell it to the international broker community.
When will you launch?
A: We’re going live in Colorado sometime this month and we’ll go live in California in January.