PROFITS UP IN SMOKE
Canada has announced a bill to legalise cannabis by July 2018 , paving the way for the country to become the first G7 member to fully legalise the drug . The industry is expected to yield billions for the Canadian economy
NEW LEGISLATION BEING introduced in Canada for 1 July , 2018 will legalise , regulate and restrict access to cannabis , and allow Canadian provinces to decide how the drug will be distributed and sold , which presents huge business opportunities for growers , distributors and manufacturers .
Medical marijuana is already legal in Canada and business is booming with the industry bringing in CA $ 869mn in legal sales in 2016 . Taking this into account , Deloitte estimates the current cannabis market has a base retail value between $ 4.8- $ 8.7bn , which would rival the size of the Canadian spirits market , which is $ 5bn . Vivien Azer of Cowen & Co . said in a recent report : “ When you consider ancillaries such as growers , testing labs , security , etc ., the economic impact could range from $ 12.7 to $ 22.6bn . These numbers do not include the impact of tourism , business taxes , licensing fees and paraphernalia sales , which could drive the economic impact higher .”
It ’ s clear that there is a lot of opportunities for businesses in Canada that want to capitalise on this new legislation . This is being led by those already in the industry who are keen to see proper regulation of the drug for recreational purposes , but also understand that it will bring increased investment , innovation and new jobs too .
Just after the announcement of the legislation , stocks in publicly traded marijuana businesses spiked . Shares of Canopy Growth Corp . were up 11 % in trading , Aurora Cannabis rose 10 %, Aphria rose 7.9 %, SupremePharma jumped 6 % and OrganiGram holdings rose 10 %. The rapid rise has dropped off since , but as we move towards July next year an overall upward trend is to be expected .
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