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CANNABIS CORNER: LevelTradingField Announces OX, a Cannabis Exchange
Traders Magazine Online News, June 25, 2019
LevelTradingField, a leading provider of exchange technology, today announced that it plans to form a new Canadian company, Ontario Exchange (OX), which intends to leverage the LevelTradingField technology infrastructure to establish an electronic derivatives marketplace for cannabis in Canada.
The new company is working with several stakeholders in the Canadian cannabis industry to design and develop relevant contract specifications that meet the risk management needs of industry participants.
OX is expected to include an Ontario Securities Commission regulated commodity marketplace, a regulated clearing organization as well as warehousing and grading operations. The effort is designed to address the risk management as well as the grading and standardization needs of the growing cannabis industry in both the medical and recreational space.
Price transparency is an issue for market participants as there is no single recognized price for cannabis. The lack of standardized grading and an established cannabis marketplace are contributing factors to this problem. The OX marketplace, clearing, warehousing, and grading, combined with LevelTradingField's technology, aims to solve this issue.
"OX is designed to serve as a scalable risk management tool for cultivators, processors, sellers, insurers, institutional traders as well as liquidity providers to hedge their cannabis price exposure with greater efficiency, security and utility and lower costs," said Lanre Sarumi, CEO of LevelTradingField. "We are building the concrete foundation to establish a platform that helps propel cannabis stakeholders to unlock the transformative potential of the crop."
Canada is the first G7 nation to legalize cannabis and no other G7 country has followed suit. As a result, OX will be the only derivatives exchange in a G7 country and indeed the world to provide a marketplace for cannabis futures and options.
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