$24 Billion Canadian Cannabis Industry Set to Grow Abroad and at Home
Unless you are living under a rock, you know that Canada is about to legalize cannabis commerce across the nation. Once federal, provincial, and local officials finalize all the rules and regulations, the Canadian cannabis industry is set to create more jobs and revenue once sales go live. Statistics Canada estimates that Canadian residents spent about $4.63 billion (C$5.7 billion) on cannabis in 2017, but it is easy to see that more money will be spent on cannabis in Canada in 2018 and beyond after regulated stores provide more convenient access across the Great White North for residents and tourists alike. What many people may not know is that Canadian companies are poised to grow even more thanks to their strong position on the global market, as cannabis reforms move forward nation by nation.
The $24 billion (C$31 billion) Canadian cannabis industry is poised to continue to grow with its head start on the worldwide market. There has been tremendous growth in Germany’s medical patient population, and the numbers will likely continue to rise as cannabis becomes more mainstream with doctors as insurance companies are already reimbursing patients for the cost of cannabis that they pick up from their pharmacies.
Countries like Spain, Italy, and Colombia are likely the next growth opportunities for Canadian cannabis companies after a flurry of consolidation at home.
Canada has emerged as a global leader in the pot industry as it becomes the first Group of Seven countries to legalize the drug for recreational use later this year while a ban at the federal level keeps pure-play U.S. pot companies from major exchanges south of the border. There are now 90 publicly listed companies in Canada with a market value of about $31 billion. (Editor’s note: the Financial Post valuation is in Canadian dollars, which is over $24 billion in U.S. dollars.)
Recent mergers and acquisitions have given the companies the scale to start looking internationally for growth, said Dan Daviau, chief executive officer of Canaccord Genuity Group Inc., the leading Canadian investment bank in the sector. Countries like Germany, for example, allow patients to be reimbursed for medical marijuana to treat a variety of symptoms, he said.
I was particularly pleased to see that Dan Daviau of the Canaccord Genuity Group told the Financial Post that he sees room in the cannabis space for smaller businesses, stating, ”Biggest isn’t always the best. There are going to be some more big guys and some smaller niche guys.”
While there are legitimate concerns that Canadian companies may be valued too high on the stock market, there are many reasons to expect the cannabis industry to continue to grow as regulated sales continue to grow in the coming years. It is reasonable to conclude that investors aren’t basing the value on current sales numbers, they are looking at the future of the cannabis industry and that future is indeed bright.
Those in the cannabis industry, or thinking of joining, will have the opportunity to learn more about the burgeoning Canadian cannabis industry from top entrepreneurs, investors, and advocates at the upcoming International Cannabis Business Conference this June 24th-25th. With representatives from Canopy Growth, MMJ Canada, Hello Cannabis, and more companies joining the stage with advocates on the ground like Jamie Shaw, Kirk Tousaw, and Robert Laurie, the ICBC will provide the latest news and information and the opportunity to network with top cannabis industry experts. Get your tickets by June 6th to save $200!