Welcome to gossip about gossip. Powered by Hedera Hashgraph. And each episode will cut through the hype of blockchain promises and explore real world examples of organizations creating the next generation of decentralized applications, which will bring trust back to the internet for us all. Hello everyone, and welcome to the latest episode of gossip about gossip. The podcast where we talk about real world applications of distributed ledger technology. My name is Nubia gods Chuck and I'm SVP of communications here at swirl labs, helping to grow the Hedera ecosystem. I am delighted to be joined by Julie Lerner from an exchange. Hi, Julie, how are you? I'm well, Zenobia. How are you? Good, Thank you. So I think for a number of our community, this will be the first time they have heard about an exchange. Can you tell me a little bit about the company and your role there? Absolutely Yes. So I'm the CEO and founder of pan exchange were an ESG focused commodity data and consulting firm. We're the leading benchmark trading and consulting firm in the US hemp industry and we've just launched the first vertically integrated program for agricultural carbon credits that's economically viable for the farmer and gives them 100% ownership of the credits. And that, to our knowledge, no one is doing. That's very exciting. So you said, no one's doing it right. Why did you decide that now was the time to go build this and bring it to market? Well, we I have designed the trading platform and it was always built to scale across multiple markets. The hemp industry constricted quite a bit, is just rebounding. It can only grow so fast. And we started looking at New opportunities and we started looking at carbon credits. Our passion is always agriculture and then realized, well, this is too expensive for the farmer and they're not even getting the credit. Some are just getting an allowance for be a good boy and don't tell and you get $0.20 an acre and others are getting like, I'll sell the credits for you, Mr farmer, and I'll give you. You're just going to have to trust me. I'll give you a little piece of it. And, you know, it was a lot of risk with very little reward. And we're always passionate about protecting the farmer. It's a massive, massive global opportunity. And there is a way to do it. That root justly rewards the farmer. Yeah and it it is it seems like something that also has to be incredibly simple. Right, and transparent. You're asking people to do something that is not their core competency. You can't ask them to take to understand a whole new industry just to be able to benefit from this. It has to look simple. This is one of the most flea markets we've stood up a lot of. It's from hemp to the 80 million ton profit market here in the US as well, and getting our East African agricultural commodities online in a way, all of it prepared us for this. And it's really a legal quagmire. But you're right, we have to keep it simple for the farmer or they're not going to do it. And so why did you decide that blockchain and DLT needed to be a part of this solution? Well, I need to preface that by saying in agriculture, I was at one point called the grim reaper of blockchain. You know, the grim reaper. I still believe that I am. I do. It will not work in the next 20 years in physical deal flow like boatloads. Happy to discuss why. However, when it came to a digital asset, a carbon credit, it very suddenly became essential. We have to have that irrefutable paper trail, the buyers demanding it, and especially now that we're offering forward contracting, we have to have the real time information about the status of that credit. Is it even issued? Has it been retired? So, you know, I went from saying it's never blockchain to solution, looking for a problem to solve to, Oh my god, we really need this. I think that's the best kind of story that we can hear. OK so once you have that aha moment, can you walk us through a little bit of how you then began sort of thinking about, OK, now I know I need this, where do I go from there? Well, yeah, so we so so that so the distributed ledger is the missing link that, that connects our program, of generating the credits with the platform. Again, this, this trading platform for physical is already in production in hemp. It's customized for carbon. We're just waiting for a pipeline of inventory to build so that. We can go live with this thing. And then we need to put this distributed ledger in there. And one of the reasons we love the header and network is the low cost, low energy and the speed of it. We when you're talking about saving the environment, you have to walk the walk and you have to go with the vendors that don't consume vast amounts of energy to run it. So so we are still early days in that it is it's the missing link, but it's also the last piece to be perfectly transparent. Right now, the priority is getting carbon credits. It's not an overnight process. And so we want to there's no point in having this super robust platform without the inventory of credits to trade. So simultaneously this year, we're onboarding the clients, getting the first credits issued, and then getting that ledger piece implemented. And as you work with clients, what has their feedback then? What is their response to this? So it depends on the type. You know, our goal has always been let's leverage our network and have to get going in this US market and then we'll expand from there. Hemp happens to be an exceptionally carbon friendly crop because it's tight, tight. This may be too much information, but this is great hemp. Hemp for fiber and grain are tight rope crops with deep and deep roots that sequester the carbon. So they are all for it. As long as we can get to the earlier point, keep it as simple as possible with the bigger corn and soy, which are the traditional crops in America. It's still a little bit of a gray area at today's prices. There's a lot of risk involved for them and a big lift for them. And it's a permanent solution. We have to remember we're asking the farmer to change their practices forever. Our program is 5 years, but you must promise me you will never tell again. And you will never do this again and do that again. And that's a huge risk. So it depends on the crop, the specialty crop, small grains and and crops like hemp. Love it. Today, the other ones need to see the price rise a little bit more to make it valuable. And how big I don't I don't know if the answer to this. How big is that hemp market today in the us? Well, we do know, sadly, we're the ones that put out the estimate. It has shrunk to the size of the broccoli crop in the United states, and that's this past year. It's about 20,000 acres. It started it about 200,000 acres. And it was just overdone and it was all about cannabinoids and CBD. But really the future of this crop is in grain and fiber and in hemp create and in building materials and packaging materials and in feed and especially animal feed. So we do think this is the bottom. I for the first time, I think since we started this business, I've said I'm bullish this upcoming year on him. It's definitely going to keep growing. Good, good. And you know what? What have been as you've built this out, as we started to have some conversations, as you started to explore the DLT side of things, is there anything that you have been surprised about, either pleasantly surprised as a former cynic or you know, or things that you say, hey, this is something that other people need to be aware of? I think the legal aspect of it surprised me again. We were already on the forefront bringing these markets that are usually traded by gentleman's agreement. If you can imagine today seriously and maybe just an email with a couple or a text message with a couple of bullet points. Yeah, I'm buying this from you to get to the legal list. I'm actually considering the work we're doing today to get the documents ready for the buyers and Sellers and everything with the distributed ledger. To me, that's an asset. It's Greenfield tech Greenfield work. Right to address how we do this technology. If I can give a shout out to DLA piper, which is the firm we're working with, they've been amazing in helping us with that. They not only note a distributed ledger, they know commodities, which is essential for us. So that to me is the biggest surprise of it. We haven't yet gotten into the actual working with the engineers and getting the text sewn together. So maybe we should chat again because I'm sure there'll be a lot there. But one thing that I would love to see and I hope I'm not jumping the gun on this. I think all of these DLT, all the registries for carbon need to speak to each other and be compatible because one day I think there'll be legislation that will actually require that. And this goes and it goes back to making sure that someone doesn't spell the same credit on four different platforms. That's right. That's right. Yeah you don't want to still have the double spend problem. Right because you have multiple different ledgers checking the same thing. Irrefutably sold for different. Right and you know, you bring up a good point. I think a lot of people don't understand that when you are dealing with sort of old world and existing industries things, in some ways the technology development is the easiest thing, right? Or the fastest thing. It's the legal and regulatory. And then thinking about how that works in with existing processes and frameworks and solutions and systems, that really does take a long time. And that doesn't happen overnight. But it does happen. Yeah, it's that was quite the surprise. So if we think about, you know, tell us a little bit about what you hope your journey will look like in 2023. Personally, I'm a little concerned about the lack of sleep because it is go time right now. So, you know, in Q1, we have two to pushes one again to get these farmers on board before there's only a couple of times a year you can test the crop and do a baseline measurement, get them in before that and then start working with hopefully to Hedera and getting this ledger in place so that we can go ahead and do all the exciting features such as the forward contracting through the platform. So this is, this will be the year that it happens. It's not planning anymore. It's implementation. Very exciting. And Julia, if folks want to learn a little bit more about you, where should we set them? So you can learn a lot about our carbon program on the website and that is Penn exchange p and x AMG. And in fact, as you specifically want to learn about agriculture, we have one is a webinar recording on a go to market strategy and it basically is to the landowner, how do I do this? And then a supplement to that is also a paper on the site, which is a checklist for the farmers and ranchers, and it discusses the other programs we mentioned at the beginning with regard to, well, maybe you just want that allowance and that's good enough for you. You know, we want you to be an educated person on that. With regard to anything technology or more specific, please feel free to reach out directly. And that's Julie at pan exchange and particularly if there are any investors listening in. We are looking to grow this program as quickly as possible. Absolutely well, Julie, Thank you so much for joining us. I would love to have you back on. And as you continue on this journey, I think it's a much needed service that you all are providing. I know there will be a lot of sleepless nights getting this to market as quickly as possible. But we appreciate everything that you are doing for your industry and for the planet. Well, Thank you so much. Thanks for the opportunity to talk about it on the podcast. Absolutely Thanks so much, Julie. Take care. You, too.
