How Long Will Canadian Cannabis Exports Increase?
Canada was not the first nation to pass a national adult-use cannabis legalization measure. That title will always be held by Uruguay which beat Canada to the legalization punch by roughly 5 years. However, Canada was the first G-7 nation to pass such a measure and has reigned as the international champion of legal cannabis commerce ever since.
In addition to cannabis being legal for adult use throughout Canada, and consumers having robust options for acquiring legal cannabis, Canada also exports a considerable amount of medical cannabis to other countries.
International cannabis exports are arguably the most complicated business transactions on earth, and the sector is still largely in its infancy. Still, Canadian cannabis companies are exporting cannabis products at an increasing rate, and new data from Health Canada is providing some insight.
According to initial reporting by Stratcann, Health Canada has received 1,211 applications from entities wishing to export cannabis since the beginning of the fiscal year (April 1, 2023), and of the applications received, 1,147 were approved.
“The number of applications and permits issued has been increasing on an annual basis, with 1,805 permits issued in 2022-2023, 1,421 in the previous year, 1,267 in 2020-21, 1,213 in 2019-20, and 272 in 2018-19.” Stratcann stated in its coverage.
The new data begs the question, how long will current trends persist? As with many things in the business world, getting to a market first is paramount, and Canada is already an established exporter to key markets such as Australia and Germany.
Canadian cannabis companies and companies in other nations that legally export cannabis internationally will continue to benefit from the imbalance created by prohibition. Many countries have yet to modernize their cannabis policies, and several more have only reformed their laws to permit medical cannabis imports.
Conversely, only a handful of countries have legal cannabis export operations up and running to meet the current demand. As full prohibition nations slowly reform their laws, allowing imports, at least initially, makes implementation easier. That all contributes to a bright future for Canadian cannabis exporters, at least in the near future.
Yet, there is a storm brewing, with Germany being a great example of what is to come. Germany currently imports a significant amount of medical cannabis products from Canada. However, domestic production in Germany will eventually supplant much of the supply that is currently coming from Canada. When adult-use cannabis is legalized in Germany, that will likely further speed up the trend.
Germany is not alone in its pursuit to pass a national adult-use legalization measure. Many other countries are pursuing the same goal to some degree, and eventually, all of those nations will likely permit domestic production in some manner. Of course, some nations will take longer than others, but in the long run cannabis modernization will win out in most parts of the globe.
Eventually, cannabis will become like every other major international crop, with some countries producing the raw harvests at a much cheaper price compared to other nations. For example, Colombia is primed to become the top producer of raw cannabis on earth due to its climate and expert cultivation community.
In the meantime, Canadian companies will continue to benefit from the patchwork of international cannabis laws and regulations.
