Marijuana Derivatives ‘Still a Way Off,’ CFTC Chief Says

(Bloomberg) -- The head of the Commodity Futures Trading Commission doesn’t see marijuana derivatives trading in the U.S. anytime soon.

Futures contracts are "still a way off" as the substance hasn’t been federally legalized in the country yet, Chairman J. Christopher Giancarlo said in an interview following a panel discussion at an Ontario Securities Commission event in Toronto Thursday.

"When social policy catches up, the markets will adapt very quickly and you would see cannabis futures," he said, adding that he hasn’t started looking at these contracts yet.

Cannabis is now legal across Canada, and U.S. firms are rushing north of the border for public listings and to access capital markets. In the U.S., meanwhile, the steady creep of legalization has companies buying up licenses and expanding operations.

This week Michigan became the 10th U.S. state -- and first in the Midwest -- to legalize recreational pot. Sales there, estimated to start in 2020, could grow to as much as $1.7 billion in the coming years, according to the trade publication Marijuana Business Daily. The total legal U.S. market is expected to hit about $11 billion in sales in 2018.

In the aftermath of the midterm elections, attention in the cannabis industry is turning to Congress and the 2020 presidential ballot. Democrats in the House may hold hearings on marijuana and pursue legislation that would ease banking restrictions or even end federal prohibition.

A marijuana futures contract "would be like another agricultural future," not very challenging from a markets point of view, Giancarlo said.

"The challenging side is the social side, and that’s not my responsibility," he said.

©2018 Bloomberg L.P.