Tomorrow is legalization day in Canada. Saying that Canada is not ready for legalization is not quite right. Canada is, its governments are not. Apparently there will ba one fully licenced “legal” marijuana store in BC. None in Ontario. But there will be plenty of pot.
For the moment the grey and black markets are ready to sell lots of pot into an eager recreational market. The licenced producers will sell as well but without legal, retail, outlets this will be more difficult. All of which was entirely foreseeable and, frankly, shows what clods the Liberals are when it comes to actually getting stuff done. In the longer run, legalization will eventually gain traction but it may be quite a long run.
Meanwhile, for investors paying attention, Bloomberg had a very interesting piece on where the real money is likely to be made:
Medical marijuana sales are expected to dip in Canada when recreational use becomes legal, but significant growth is expected in markets where medical marijuana programs are emerging, according to a report from Arcview Market Research and BDS Analytics. The global medical pot market could be worth more than $50 billion by 2025, from $8 billion in 2017, 10 times the projected size of Canada’s total marijuana sector, according to PI Financial Corp. Medical “is potentially bigger, for sure as a percentage growth,” says Bruce Linton, chief executive officer of Canopy Growth Corp.” bloomberg
Our friends at FSD Pharma (C.HUGE) and Canntab Therapeutics (C.PILL) are well aware of the potential of the cannabis pharmaceutical industry. The fact is you have to grow very high grade, carefully controlled, cannabis to work with pharmaceutical companies. And you need to address the key issues of dosage and timing of dosage to answer physicians’ questions about whether to prescribe cannabis to their patients.
For the next few days there will be a lot of media coverage of stoners filling their bongs with marijuana in public. The pot they are smoking will almost certainly not be “legal” but that will not matter in the media frenzy. But in the background serious companies with real business plans are building the capacity to service the real market: tested, dose controlled, medical marijuana.