Category Archives: investing

Canada makes final preparations before cannabis becomes legal

Canada will soon become the second country in the world to legalize cannabis—with the provinces left to work out the details of Prime Minister Justin Trudeau’s landmark measure.

From October 17, Canadians will be allowed to grow, possess and consume marijuana for recreational purposes—five years after Uruguay passed pioneering legislation on the issue.

Derivative products such as edibles, cosmetics and e-cigarette products containing pot will not be allowed until 2019.

But nonetheless, legalization is expected to boost the Canadian economy, generating $816 million to $1.1 billion in the fourth quarter—without taking into account the black market, which is expected to account for a quarter of all joints smoked in Canada, according to Statistics Canada.

A $400 million tax revenue windfall is forecast as a result—with the provinces, municipalities and federal government all getting a slice.

In total, Statistics Canada says 5.4 million Canadians will buy cannabis in legal dispensaries in 2018—about 15 percent of the population. 4.9 million already smoke.

And the world will be watching how Canada gets on.

“There is a lot of interest from our allies in what we’re doing,” Trudeau, who has admitted to smoking cannabis himself a handful of times, told AFP in May.

“They recognize that Canada is being daring… and recognize that the current regime (of prohibition) does not work, that it’s not preventing young people from having easy access to cannabis.”

Provinces decide

Preparations are underway ahead of the reform, promised by Trudeau’s Liberal Party, with businesses and local authorities forced to review their rules and regulations.

That’s because even though the cannabis ban, in force since 1923, was overturned by the federal government, how legalization plays out in practice has been left to Canada’s 10 provinces and three territories to decide.

Several have already said they will not fully implement the law.

For example, even though federal law will permit each household to grow up to four cannabis plants, central Manitoba and Quebec in the east say they will ban it—and go all the way to the Supreme Court over the matter.

Like with alcohol and tobacco, the question of legal age also falls to the provinces. Nineteen seems to be the standard, but it is 18 in Alberta—while Quebec, whose new government will enter office the day after legalization, wants to raise the age to 21.

With regards to sales, some provinces such as Quebec will implement a public monopoly—while others, including Ontario and Nova Scotia, have decided to trust the market to the private sector.

As for law enforcement, federal police will be ordered to abstain for 28 days before working, as will police in Toronto.

Officers in Montreal, however, are simply asked to not show up to work high.

Another issue for the provinces to mull over is open consumption, with Montreal deciding to impose the same rules as those for tobacco—while people in other provinces will have to light up at home.

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Trump plans to push cannabis reform after election, GOP congressman says

Death penalty ruling would seem to apply to drug war; Congressional Budget Offices scores marijuana bill; Trump looks at replacements for Sessions


Rep. Dana Rohrabacher (R-CA) says he’s spoken to White House officials about pushing marijuana reform after the midterm elections.

  • “It could be as early as spring of 2019, but definitely in the next legislative session.”

The Congressional Budget Office released a score for a marijuana research expansion bill approved last month by the House Judiciary Committee, a reminder that it is being more seriously considered than hundreds of other cannabis proposals filed in Congress in recent years.

The Washington State Supreme Court’s ruling striking down the death penalty due to its racially disproportionate enforcement and lack of deterrent effect reads just like an indictment of the war on drugs. You only have to swap just a few words:

  • “Under article I, section 14, we hold that Washington’s death penalty is unconstitutional, as administered, because it is imposed in an arbitrary and racially biased manner. Given the manner in which it is imposed, the death penalty also fails to serve any legitimate penological goals.”


President Trump is reportedly weighing candidates to potentially replace U.S. Attorney General Jeff Sessions, including Health and Human Services Secretary Alex Azar, Transportation Department general counsel Steven Bradbury, former Attorney General Bill Barr, Deputy Secretary of State John Sullivan and Janice Rogers Brown, a retired appeals court judge from the District of Columbia Circuit.

Separately, President Trump that he would overrule Sessions if he tries to undermine criminal justice reform efforts, but he added that “some categories” of drug offenses should see tougher punishments.

President Trump and Kanye West spoke about criminal justice issues during a televised Oval Office meeting, with the president seeming to say he was “open to” rescinding his previous support for stop and frisk policing policies.

U.S. Drug Enforcement Administration Acting Administrator Uttam Dhillon refused to rule out actions against doctors who recommend and pharmacists dole out medical cannabis in Utah.

The dean of academics for the U.S. Air Force Special Operations School was fired for using CBD to treat prostate cancer.

Federal drug trafficking prosecutions along the Mexican border dipped to their lowest level in nearly two decades as the Trump administration focused on launching a “zero tolerance” immigration crackdown that separated thousands of children from their parents.

The U.S. Supreme Court heard oral arguments in a case concerning detention of immigrants after they’ve served criminal sentences in which one of the plaintiffs has two marijuana possession convictions.

Sen. Sheldon Whitehouse (D-RI) and his Republican challenger Robert Flanders both said they oppose ending federal marijuana prohibition during a debate.

Sen. Ron Wyden (D-OR) is applying pressure on trade negotiations with the Philippines due to the nation’s bloody “drug war.”

Rep. Tulsi Gabbard (D-HI) tweeted, “Another way that we can support veterans’ care: ending the federal marijuana prohibition. In 2017, more than 80% of veterans in the American Legion voted in favor of a resolution legalizing medical marijuana at the federal level.”


There’s disagreement among both supporters and opponents of Utah’s medical cannabis ballot measure about whether campaign activities should be suspended in light of a deal on compromise legislation.

Wyoming gubernatorial candidates debated marijuana policy, with each saying they are open to medical cannabis but opposed to recreational legalization.

An independent campaign committee supporting California Republican gubernatorial candidate John Cox for California released an ad attacking his opponent, Lt. Gov. Gavin Newsom (D), for a San Francisco policy providing free syringes to injection drug consumers. Separately, regulators released a short video about the state’s marijuana appellations program.

Washington State regulators said they will pause their move to crack down on marijuana edibles that could appeal to children for 30 days to hear public comment, and issued a clarification about the policy.

The Massachusetts Supreme Judicial Court dismissed thousands more drug cases due to misconduct by a testing lab chemist. Separately, the state’s top marijuana regulator spoke about ongoing efforts to bring the recreational market online.

New Jersey’s health commissioner criticized marijuana’s Schedule I status.

The Vermont marijuana legalization study commission’s taxation and regulation subcommittee met.

More than 20% of Hawaii medical cannabis products are rejected for sale by a testing lab.

Kentucky’s agriculture commissioner tweeted that the state “continues to lead on industrial hemp.”

Ohio regulators released responses to frequently asked questions about the medical cannabis processor licensing approval process.

Here’s a look at efforts to legalize marijuana in New Mexico.


Denver, Colorado regulators released guidance about terminating marijuana businesses and associated licenses.


The UK home secretary said that prescriptions for cannabis medications will be allowed starting on November 1.

Lithuania’s parliament voted 90-0 to approve to bill allowing doctors to prescribe marijuana-based medicines.

Public outrage over a Malaysian death sentence for a man convicted of selling medical cannabis oil to cancer patients has moved the government to eliminate the country’s use of capital punishment altogether.


The St. Louis Post-Dispatch editorial board endorsed one of Missouri’s medical cannabis ballot measures.


MedMen Enterprises Inc. is acquiring PharmaCann LLC in a stock deal valued at $682 million.

MJ Freeway is merging with MTech, and the two will become subsidiaries of a newly formed holding company, Pubco, to be listed on The Nasdaq.

Facebook is removing a block on searching for pages with marijuana-related terms in their names, but only for those who have been verified for authenticity.

Colorado retailers sold $141.3 million worth of legal marijuana products in August, a new monthly record.

The Wall Street Journal looks at the risks for mainstream brands in entering the marijuana industry.


Snoop Dogg spoke in support of Michigan’s marijuana legalization ballot measure.

Rapper Wiz Khalifa brought a giant jar of marijuana to a nightclub.

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Israeli investors to grow marijuana in Uganda

The company said the order for seeds has been placed with a supplier in the Netherlands — considered to be one of the world’s leading cannabis suppliers.

An Israel firm, Together Pharma Limited, has reportedly secured land in Uganda to cultivate a banned crop — marijuana — on a commercial scale.

The firm, said to be the manufacturer and distributor of medical cannabis, disclosed last week that it has placed an order for (cannabis) seeds for a farm the company is establishing in Uganda, according to The Times of Israel newspaper.

The company said the order for seeds has been placed with a supplier in the Netherlands — considered to be one of the world’s leading cannabis suppliers. It also indicated that production from its Ugandan farm could be realised by January next year.

“The order of the seeds represents an important milestone towards growing cannabis on a farm in Uganda and marketing produce to a Canadian customer by the beginning of next year,” Nissim Bracha, the company’s Chief Executive Officer, reportedly said in a statement.

The Times of Israel reported in April that the company had closed a deal to supply five tonnes of cannabis oil to a Canadian firm and that the contract could potentially yield revenue in hundreds of millions of dollars. In the same month, Reuters news agency, reported that Together Pharma plans to grow up to 25 acres of medical cannabis in a “foreign country” in a deal that could potentially bring sales of $75m to $300m, depending on the size of each harvest.

The company indicated that its subsidiary, Globus Pharma, signed the deal with the country it did not name for marijuana cultivation. In the Reuters report, the Israel firm said production from the farm it is setting up in a foreign country could be ready in the first quarter of 2019. The Uganda Investment Authority (UIA) Executive Director, Basil Ajer, said the institution does not license investors for marijuana cultivation.

“That is an area we do not even handle. It is illegal. Probably the health ministry and National Drug Authority (NDA) might know. We do not even license companies to grow marijuana for medical purposes,” he added, “Since not all land in Uganda is owned by the Government, such a company could also partner with an individual to grow the crop on his or her land,” Ajer said. But the mandate of NDA as far as cannabis is concerned does not extend to the crop’s cultivation.

The authority is only expected to monitor the content of narcotics and psychotropics in imported drugs. Each country has its parameters on the volume of the content of narcotics and psychotropics imported drugs should contain — beyond which such medicines are not expected to be allowed into a country.

“The planting of cannabis is actually supposed to be controlled by the Police,” a source at NDA, said. The Police spokesperson, Emilian Kayima, said the force has not been engaged regarding any supposed investment in cannabis growing, but added that the institution charged with keeping law and order would not bless such an undertaking.

“Ideally, if such an option was on the table, it would be handled by the health and internal affairs ministries and then the Police would come in. Without the Police, I do not see it happening,” he added. “There is no way the Police can give such approval. We are already having grave problems. It doesn’t matter the purpose of planting it. You cannot guarantee it won’t be misused. We would be doomed if the country chose that direction,” the Police publicist said.

The law According to the Narcotic Drugs and Psychotropic Substances Act 2015, anyone involved in the manufacture, production, sale or distribution of a narcotic drug or psychotropic substance commits an offence and is liable, on conviction, to a fi ne not exceeding sh2.4m or imprisonment not exceeding fi ve years or both.

The law also prohibits the cultivation of any plant from which narcotic drugs and psychotropic substances may be extracted without permission from the health minister. The prohibited plants, according to the law, include cannabis, coca bush, catha edulis, papaver sominferum (opium poppy) and papaver setigerum.

Together Pharma Limited has permission to grow and market marijuana for medical justifications in Israel. It is estimated that Israel could earn between $285m and $1.14b a year from the industry. There are several companies in Israel engaged in cannabis production. Apparently, a ban on exports is prompting manufacturers of products containing marijuana to look outside Israel for large scale cannabis cultivation.

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Canada: Want future job security? Take a college course on cannabis

Canada is legalizing recreational cannabis for adult use on October 17, so now would be the time to take a college course on cannabis.

With Canadian cannabis businesses offering sky-high wages in exchange for expertise, many are now looking for a reliable way to break into the industry. Prospective cannabis industry workers—and the businesses doing the hiring themselves—are now looking for academia to provide that bridge. Canada is preparing to officially legalize recreational cannabis for adult use on October 17. With the cannabis industry booming, businesses have begun teaming up with universities to expedite the implementation of college and university cannabis courses.

The cannabis company Sunniva, one of Canada’s licensed producers under the newly legal recreational cannabis legislation, has already partnered with Okanagan College in British Columbia.

The college recently created an advisory board in order to consult with legal cannabis companies like Sunniva directly, as to better inform their courses that train students to work in the cannabis industry. The courses offered to students range from programs on investment and trading, business, to cultivation and more.

While courses are often developed with governmental input, the cannabis industry is simply moving too fast. And as a new industry, cannabis businesses themselves are more experienced and can offer practical guidance. As thousands of new job opportunities crop up as a result of legalization, colleges need a way to keep up with the industry.

Cannabis companies are partnering with colleges1 Want Future Job Security? Take a College Course on Cannabis

This also stands to benefit both students who are looking for work within the cannabis industry and businesses that are seeking professionals to hire. As the CEO of Sunniva, Dr. Tony Holler, says in the Financial Post, cannabis businesses are currently forced to hire and train inexperienced employees themselves, which is both expensive and time-consuming.

Durham College in Ontario is also already offering a two-day course for business graduates to learn about medical cannabis, and this fall is rolling out a new specialization program in partnership with a subsidiary of Emblem Corp, a Canadian licensed cannabis producer. This program includes six courses, some of which require students to be at least 19 years old.

The Ontario college has also partnered with software company Ample Organics Inc, lab testing company Molecular Science Corp, recruitment company Cannabis at Work, and the publication CannaInvestor Magazine.

Niagara College is also now offering its own graduate certificate program for students who want to learn cannabis production, which was designed with the help of multiple licensed producers.

While this type of arrangement between cannabis companies and colleges is novel, so is the cannabis industry itself and the university courses needed to help it thrive.

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Border Patrol agents prepare for legalization of recreational marijuana in Canada

Recreational marijuana will be legal in Canada starting Oct. 17.

Border Patrol agents say they are ready for heavier traffic, which can impact anyone going to Canada.

U.S. Customs and Border Protection Chief Officer Aaron Bowen warns anyone that may try to sneak weed back into the U.S. will face anything from a fine to a zero-tolerance policy.

“A smell is obviously going to alert an officer and probably going to get you a secondary exam because we want to make sure the actual marijuana isn’t in the vehicle,” Bowen says.

Medical marijuana will also be seized at the border.

Anyone who gets caught could be arrested and fined $500.

Agents urge people planning to use marijuana in Canada to spend the night or have a designated driver.

Weedcraft Inc. Is A Tycoon Simulator For Future Ganjapreneurs

Expect to play it in early 2019.

The cannabis industry is experiencing an all-time high when it comes to growth and acceptance for the plant that powers their business. Grassroots legalization efforts are happening all across the country, while surging stocks for cannabis companies, like Tilray, have reminded investors of the dotcom boom. Even politicians have turned heel, joining the Green Rush however they can.

Now you too can participate (from the comforts of your computer) thanks to a tycoon game-parody called Weedcraft Inc. Published by Devolver Digital, the game allows players the typical mechanics and systems found in a tycoon game, but wrapped in the specificity found in starting a marijuana business. Instead of a free-for-all sandbox experience, Weedcraft Inc. will follow a loose narrative, as players explore different vignettes of the cannabis start-up enterprise.

According to Alexander, the game will change based on the state and situation players find themselves in depending on the vignette. You can also play the game with varying degrees of morality and legality; bribing cops or building false storefronts to hide your cannabis farms is totally allowed. The line the game developers won’t cross? You won’t see any kids smoking weed on screen. The style in which you play the game will also affect whatever bonuses and abilities you’ll acquire.

“There are certain perks you can only get if you’re super shady,” Alexander said. “There are certain perks you can only get if you’re decent.”

“Right now, it’s like the end of Prohibition meets the Gold Rush,” Scott Alexander, the game’s main writer, told Polygon. “The federal illegality combined with the state-by-state legalization has created a financial morass and just a weird, interesting place. And we thought, ‘Well, that’s a tycoon game waiting to happen.’”

“Playing fully decent is like getting a cultural victory in Civilization,” he added. “[It’s like,] ‘Can I play the whole game without fucking anyone over?’”

According to Devolver Digital co-founder Mike Wilson, you can expect Weedcraft Inc. to debut in early 2019.

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Medical marijuana businesses given deadline to get licensed with state

LANSING, Mich. — The deadline for medical marijuana businesses to get a license from the state has changed, again.

Businesses now have until October 31 to get a license or face legal action from police or the state attorney general’s office.

This is the fourth time this year officials have changed the deadline.

Officials with the state’s Department of Licensing and Regulatory Affairs are trying to force businesses into a licensed system.

Last month, state officials tried to force nearly 100 medical marijuana businesses to close because they hadn’t submitted paperwork by the previous deadline of September 15.

In November, voters will decide whether or not recreational marijuana should be legal for adults in Michigan.

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Boston inches forward with recreational marijuana permits

Every two weeks, at meetings of the Massachusetts Cannabis Control Commission, marijuana officials display a map showing how many completed applications for recreational pot business licenses have been submitted from each county in the state.

Conspicuously lagging behind: Suffolk County, home to Boston — which, unlike most cities in the state that haven’t banned such companies, has yet to issue a local permit to a recreational marijuana operator.

Now, those numbers are poised to grow. Officials in the administration of Boston Mayor Martin J. Walsh told the Globe last week that the city will negotiate its first so-called “host community agreements” with marijuana companies in the first two weeks of October.

Those contracts are required in order to win a state license from the commission, so Walsh’s signature on one would allow that company to move forward at the state level. The deals typically call for payments from the company to the municipality and spell out other conditions, such as the facility’s hours of operation.

City Hall officials declined to put a timeline on when pot shops might open in Boston, however, saying it depends on when the state issues final licenses to applicants from the city. They also declined to make Walsh or other city leaders available for an on-the-record interview.

The officials also gave new details on how they would apply the city’s zoning rules, which require a half-mile buffer between licensed marijuana facilities. In several neighborhoods, two applicants are vying for permission to open in the same area, raising the question of how the city would choose between them.

The officials said those decisions will be made by the office of Alexis Tkachuk, the city’s director of emerging industries, in collaboration with the city’s transportation, planning, and legal departments.

Officials will consider a number of variables: which company applied first, the reaction of neighbors to each proposal, traffic impacts, how the proposal fits within the city’s development and planning schemes, and whether the company is eligible for state programs boosting entrepreneurs from communities disproportionately affected by the war on drugs.

Those variables, however, will not be weighted, and applicants won’t be assigned a score. Instead, officials will simply judge the “totality” of each application.

That behind-closed-doors process is unlikely to placate advocates and some city councilors, who have called on the city to enact more robust mandates favoring companies owned by minorities and local residents over wealthy out-of-state investors.

Shanel Lindsay, an attorney, businesswoman, and the cofounder of Equitable Opportunities Now, a group pushing for equity in the cannabis industry, slammed the city’s “opaque” process. She said the failure to create an objective standard and make decisions in public opens the door to bias and favoritism, and is likely to favor already-wealthy white operators who can afford to hire sophisticated lawyers and former city officials to grease the wheels.

“This is exactly what we were worried about,” Lindsay said. “It’s really vague and subjective. There’s no clear standard, no community collaboration, no transparency, and no clear acknowledgment of the necessity to make equity a prevailing favor in their decisions.”

City officials noted that every applicant must hold a public hearing and address neighborhood concerns. They also said they would consider waiving the half-mile buffer for applicants that qualify for the state commission’s equity programs, explaining that such entrepreneurs might apply later, after prime properties are taken and buffer zones have been drawn around facilities whose owners moved faster. The process for seeking such an accommodation is unclear, though.

Officials further stressed that Boston, unlike other municipalities, hasn’t categorically zoned marijuana businesses out of residential areas or off of main streets. They also pledged not to impose onerous conditions on or demand large payments from marijuana operators, saying the city’s host community agreements would mostly be focused on addressing concerns raised by neighbors — for example, agreeing not to install benches and picnic tables where people might hang out and smoke weed.

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Jamaica makes First Shipment of Medical Marijuana Extract Oil to Canada

The Honourable Audley Shaw, Minister of Industry, Commerce, Agriculture and Fisheries, is pleased to announce Jamaica’s first legal export of medical marijuana extracted oil to Canada. The shipment to Canada was authorized through an import permit issued by the Government of Canada through Health Canada for Jamaica and an export permit issued by the Ministry of Health in Jamaica. The shipment marks the first step in positioning Jamaica as the medical marijuana hub for the world.

According to Minister Shaw, “Jamaica is uniquely positioned to be a global player and we are committed to providing the leadership and resources required for opening the international markets including Canada and Europe for our licensed and regulated Jamaican companies.”

The Minister’s statement was endorsed by Lincoln Allen, CEO of the Cannabis Licensing Authority (CLA) who has also identified international export opportunities as a major target for the CLA.
According to the CEO, the CLA is fulfilling its mandate as well as a commitment to enabling the timely development of a regulatory framework to position Jamaica as a global leader for the export of cannabis for medical and scientific purposes.

The Import permit from Health Canada was obtained on behalf of Jamaican-based Licensed Producer Timeless Herbal Care who was then granted an export permit by the Ministry of Health in Jamaica.

According to Courtney Betty, President and CEO of Timeless Herbal Care, “Timeless continues to be a trailblazer in Jamaica and the accomplishment of landing the first shipment of extracted oil which was cultivated and extracted at our facilities in Jamaica is a fulfillment of a mission we began five years ago. This was made possible by our commitment to the development of small farmers and local communities and through partnerships such as our Research at the University of Technology. Our international partners such as Open Vape and Mount Sinai Hospital are also helping to guide us in producing the highest grade extracted oil which can be used for clinical trials leading to the development of medicinal products for the world.”

With this announcement and the commitment of the Government of Jamaica as well as several other key programmes to be announced shortly, Jamaica is rapidly moving to take its rightful place in the fast growing medical marijuana industry globally.

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Everything you need to know about investing in Canadian marijuana stocks

Here’s your complete guide to investing in Canadian marijuana stocks. Marijuana stocks have become a hot commodity over the last couple of years. And there’s one country above all where the stocks are the hottest: Canada.

Canada has become the center of attention for the marijuana industry because, unlike the U.S., marijuana is legal at the federal level. The cannabis industry in the country has exploded, with many Canadian marijuana stocks skyrocketing as well. What’s going on now with marijuana in Canada? What threats exist for the cannabis industry? What are the best ways for investors to profit from the rapidly growing marijuana market? Here’s everything you need to know about investing in Canadian marijuana stocks.

Overview of the Canadian marijuana market

The first thing for investors to know is that there are two Canadian marijuana markets: medical marijuana and recreational marijuana. Canada legalized medical marijuana in 2001. However, the then-current regulations were geared toward patients growing marijuana for their own medical use.

In 2013, though, new regulations called the Marihuana for Medical Purposes Regulations (MMPR) dramatically changed how medical marijuana could be obtained. Under these regulations, Canadians could no longer grow marijuana at home but instead had to obtain medical marijuana from licensed producers.

The MMPR didn’t stay in effect for very long. In February 2016, a Canadian federal court ruled that the regulations were unconstitutional because they prohibited Canadians from growing medical marijuana at home. As a result, yet another set of regulations was passed, Access to Cannabis for Medical Purposes Regulations (ACMPR), which retained the licensed producers but also allowed individuals to grow medical marijuana at home. The ACMPR went into effect in August 2016.

In 2015, then-candidate Justin Trudeau promised to legalize and regulate marijuana for recreational use by adults if he was elected Canada’s Prime Minister. Trudeau did go on to win the election. He also made good on his campaign pledge. The Canadian Senate voted a final time to legalize recreational marijuana on June 19, 2018. Under the Cannabis Act (also known as bill C-45), Canadian adults will be able to purchase marijuana for recreational purposes starting on Oct. 17, 2018.

As is the case with medical marijuana, recreational marijuana will be supplied by licensed producers or can be grown by Canadians for their own use. Canadian provinces are allowed to establish their own regulations about how recreational marijuana will be distributed and sold.

Not all types of recreational marijuana will be permitted beginning in October 2018, though. The rules permit the legal sale and use of dried cannabis, cannabis oil, and cannabis seeds. However, cannabis edibles and cannabis concentrates used for vaping were excluded — at least temporarily. Health Canada, the federal agency in Canada responsible for public health, felt that more time was needed to develop regulations for these types of cannabis products. Finalization of these regulations is expected sometime in 2019.

Impact of legalization

Red Canadian maple leaf cut-out next to marijuana buds and pack of recreational marijuana cigarettes

The number of patients receiving medical marijuana in Canada increased quickly to nearly 270,000 in 2017. This figure is expected to grow to more than 285,000 patients in 2018.

As a result, medical marijuana has become a relatively large business in Canada. Last year, total sales were estimated to be around $600 million. However, it seems likely that medical marijuana sales won’t continue to increase very much and could even taper off somewhat as Canada’s legal recreational marijuana market opens.

But the recreational marijuana market is expected to soar. Arcview Market Research and BDS Analytics project that recreational marijuana sales between Oct. 17, 2018, and the end of the year will approach $700 million. By 2022, this total could increase to nearly $5 billion.

The potential for such tremendous sales has attracted more marijuana growers, even prompting produce growers to convert greenhouses to growing marijuana. It’s also generated considerable interest in the Canadian recreational marijuana market, with major beverage makers looking to market cannabis-infused beverages.

Changing relationships with banks

Although the Canadian marijuana market really began to blossom in 2013, raising money was a challenge for some marijuana-related businesses. Most banks wouldn’t touch marijuana growers with a 10-foot pole because of concerns that they could be penalized for doing so. This left marijuana growers with limited options for obtaining the capital needed to fund expansion.

One alternative used by many marijuana growers was bought-deal financing, a type of stock offering where an underwriter commits to buy all of the stock being offered. These deals also often included warrants and convertible debentures — loans that can be converted later to stock. Some companies also were able to secure loans from credit unions.

Bank of Montreal (BMO) cracked the door open somewhat, though, earlier this year with its capital-markets business leading a round of equity financing for Canopy Growth. BMO CEO Darryl White called Canopy “a bona-fide business operating within the boundaries of the law.” He also raised the possibility that BMO could do similar transactions with other marijuana businesses as long as they met the bank’s criteria for such deals.

But it took the passage of the Cannabis Act in July to really throw the doors open for banks to work with the Canadian marijuana industry. BMO again led the charge soon after the law was passed by agreeing to a major debt facility for Aurora Cannabis(NASDAQOTH:ACBFF).

Threats to the Canadian marijuana industry

Raising capital could continue to be problematic for some members of the Canadian marijuana industry. Although banks will be more amenable to doing business with the major marijuana growers, it could be a different story for smaller players.

There’s also a lingering threat from the way that some marijuana businesses structured their bought-deal financing in the past. Companies that heavily used convertible debentures — loans issued that can be converted into stock — could face a ticking time bomb. If investors convert those debentures to stock, companies could experience significant dilution in the value of existing shares.

Probably the most worrisome threat for the Canadian marijuana industry, though, is the possibility of a supply glut within a few years. Marijuana growers have scrambled to increase their production capacity in anticipation of tremendous demand once the recreational marijuana market opens. The problem is that the top five Canadian marijuana growers alone are on track to have annual production capacity within the next couple of years that is much greater than even the most optimistic demand projections.

This prospect has led some in the Canadian marijuana industry to predict a “squeeze” scenario. As supply catches up to and surpasses demand, the laws of supply and demand dictate that prices will fall. Marijuana growers with higher production costs would likely struggle in this scenario. A natural consequence would be a wave of consolidation within the industry as smaller players are gobbled up at bargain prices by larger marijuana growers.

These problems could be exacerbated if growth in the Canadian recreational marijuana market isn’t as strong as expected. One potential way that growth could fall short of projections is if the Canadian government doesn’t finalize regulations for cannabis edibles and concentrates next year.

Future of the Canadian marijuana industry

While the total marijuana market in Canada is likely to increase rapidly over the next several years, the real future of the Canadian marijuana industry is probably going to focus on other countries. Several of the leading Canadian marijuana growers are already forming partnerships and establishing operations in Europe, Australia, and South America.

Germany is currently the biggest and most important marijuana market outside of North America. The country claims the largest population in the European Union. Germany legalized medical marijuana last year. Most of the largest Canadian marijuana growers now have subsidiaries in Germany or partnerships with German medical cannabis distributors.

Arcview Market Research and BDS Analytics project that the global medical marijuana excluding Canada and the U.S. will total $3.1 billion by 2022. Over time, though, this market could increase well above that amount. BDS Analytics CEO Roy Bingham thinks that the global cannabis market will top $100 billion over the long run even without any movement in Asia to legalize marijuana.

But the biggest wild card for the Canadian marijuana industry is what happens with the country’s neighbor to the south. The United States still has federal laws in place that outlaw the use and sale of marijuana. However, medical marijuana is now legal in 30 states plus the District of Columbia. Nine states plus D.C. have legalized recreational marijuana. And those numbers are likely to increase, as four other states will vote on the legalization of either medical or recreational marijuana in November.

The major Canadian marijuana growers are staying away from the U.S. for now. All of the largest marijuana businesses have their stocks listed on the Toronto Stock Exchange, which prohibits members from establishing operations in any jurisdiction where marijuana is illegal at the federal level.

However, the possibility exists that the U.S. could change its laws. Sen. Cory Gardner, a Republican whose home state of Colorado allows the legal use of medical and recreational marijuana, is promoting a bipartisan bill that would prevent the federal government from interfering in states that have legalized marijuana. President Trump has indicated that he will likely support this legislation.

Should laws change in a way that allows Canadian marijuana growers to expand into the U.S., the future of the industry could be very bright indeed. The projected U.S. cannabis market in 2022 is nearly three times the size of the combined marijuana market in the rest of the world, including Canada.

Different ways to invest in Canadian marijuana stocks

There are three primary approaches for investing in Canadian marijuana stocks:

  • Buy “pure play” marijuana stocks
  • Buy stocks of companies outside of the marijuana industry that have ties to the industry
  • Buy marijuana exchange-traded funds (ETFs)

“Pure play” marijuana stocks are those of companies that derive all or nearly all of their revenue from the cannabis industry. Investing in these stocks comes with significant risk because of the threats mentioned earlier. However, the stocks also have the potential for nice returns — especially if global marijuana markets open up more quickly than expected.

For investors wanting to dip their toes into the Canadian marijuana industry without taking on quite as much risk, buying stocks of companies that have ties to the industry but aren’t in it directly is an alternative. Perhaps the best example of this type of stock right now is Constellation Brands (NYSE:STZ). Although Constellation Brands is a large alcoholic beverage company, it has a presence in the cannabis industry thanks to its multibillion-dollar investment in Canopy Growth.

Companies like Constellation Brands see an opportunity to create a new class of cannabis-infused beverages. Constellation and Canopy, for example, plan to develop a wide variety of low-calorie drinks mixed with different cannabinoids. Some of these drinks would be nutraceutical products containing cannabidiol (CBD), which has some medical benefits but isn’t psychoactive. Even beverage giant Coca-Cola is reportedly interested in developing CBD-infused beverages for relief of cramping, inflammation, and pain.

ETFs provide a way for investors to buy a basket of marijuana stocks. Buying an ETF offers the ability for investors to spread their risk across a large number of stocks. However, the downside of ETFs are that they charge annual fees that investors don’t have to pay when buying individual stocks. There are currently two primary marijuana-focused ETFs that have holdings consisting largely of Canadian marijuana stocks: Horizons Marijuana Life Sciences ETF and ETFMG Alternative Harvest ETF.

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