Canada: the new home of cannabis?

Canada is well placed to become the world's cannabic leader. With the upcoming legalization of cannabis in Canada and the momentum of legalization in the United States, Canadian companies are in the starting blocks.

Experience, investment funds and legitimacy

In Canada, cannabis businesses have been thriving for some years now. Production and sales licenses are distributed directly by the government (40 production licenses to date). They were able to develop with medical cannabis, and are now working hard on recreational cannabis. Unlike in the USA, large companies like Canopy Growth are listed on the stock exchange, and the value of their shares is rising daily. Since the November 8, the multinational's share price rose by 30%.

In the United States, the federal ban on cannabis is scaring off banks, which are unwilling to lend money to entrepreneurs. As a result, almost all cannabis-related financial transactions in the USA are cash-based. Canadian companies, on the other hand, continue to invest in research and development.

R&D also brings technological mastery, greater product knowledge and, consequently, legitimacy in the eyes of customers and financial partners. These first cannabis multinationals are determined to take advantage of the global wind blowing from the «War on Drugs». Germany, which is expected to legalize medical cannabis in 2017, has called on Canopy Growth to supplement its domestic production. Canadians are also present in South America, In the United States, governments are beginning to decriminalize or even legalize the use of medical cannabis.

According to financial analyst Daniel Pearlstein of Dundee Capital Markets: »the longer the federal government delays recognizing legal cannabis, the more Canadian companies are multiplying their international partnerships and imposing their barriers on the market». He adds: »The company that dominates the U.S. market is still 3 or 4 years behind the Canadians. And how far behind France?

Canadian companies are looking forward to spring 2017, but are also keeping their eyes on Europe and South America.

The northern cousin stronger than the American ogre

High Times magazine, which has been campaigning for the legalization of cannabis in the USA for decades, comes to qualify Canada's «new cannabis capital».
Following the legalization of cannabis in 4 additional states, one in five Americans can now freely consume cannabis. The legal market is now worth $10 billion in the USA, and is expected to exceed $20 billion by 2020.

Théo Caillart