Investors in Canada's marijuana industry can consider adding grows to their portfolio

Three Things to Keep in Mind for Investors in Canadian Marijuana

Posted on Categories: Knowledge CentreTags: , , , , , ,

News coverage about marijuana investing in Canada sometimes suggests the industry is nearing a plateau, and that it already is mature.

Don’t believe it.

Entrepreneurs and investors have been participating in the cannabis industry for a few years in Canada and the United States, but it remains a fledgling industry. We all remain on the ground floor, which can be a good place for investors. Especially if you are investing in marijuana in Canada.

As Canada marches towards full recreational legalization in 2018, the country stands apart for investors. By this time next year, Canada should be the only Western country in the world with recreational legalization in place in all directions, although provinces will likely enact regulations that differ from one another.

Things to Evaluate while Investing in Marijuana in Canada

Marijuana Grows Matter

Investors eyeing cannabis have much to consider, including cannabis ancillary businesses (like software and technology companies, packaging manufacturers and ingredient suppliers) and brands producing cannabis products. All of the above are worthy of close scrutiny. But don’t forget about grows. Canadian growers are poised to harvest millions of pounds to meet consumer demand, and as the plant becomes more normalized in society what already amounts to strong demand is expected to climb even higher. Growers supply the backbone of the entire industry, which potentially includes edibles and concentrates. As product offerings expand into areas beyond eighth-ounces of flower, demands on growers will mount. This is good news for those who invest in grows.

Marijuana Management Matters

The cannabis industry in the United States has witnessed extraordinary success stories, as well as flame-outs. With most of the failures, the problems weren’t with the commercial idea or even the products themselves. Instead, industry flops tend to stem from the top — that is, poor management. When considering cannabis investments, closely study the management team. Get a sense about their track records, presumably within other industries. Query industry stakeholders about their reputations. The best ideas in the world will never triumph in the competitive marketplace with weak management teams at the helm.

Marijuana Regulations Matter

The next year presents once-in-a-lifetime opportunities to collaborate with Canadian governments to help build a regulatory framework for what is the fastest-growing industry in Canada, as well as North America. Imagine being a brewer on the ground floor — yep, we still are there with cannabis — when the Canadian government and provinces first hammered-out regulations for the alcohol industry. It is an enviable position for businesses in any industry. So far, Ottawa and the provinces have made a number of wise choices regarding cannabis. But the year ahead presents plenty of fresh opportunities for those of us in the industry to help inform authorities about the details of our budding industry. Roadblocks that could stop growth? Regulatory ideas that could help nurture strong growth, while protecting Canadian kids and communities? It all will be on the table in coming months. Participation among marijuana industry stakeholders is highly encouraged.



As investors and investments increasingly migrate towards cannabis, people should strongly consider Canada.

Cannabis Investors Should Look to Canada

Posted on Categories: Investing, Knowledge Centre, Marijuana investingTags: , , , , ,

The U.S. market for cannabis is booming, holds immense promise for continued expansion but remains saddled with risks. With marijuana illegal under federal law, and the United States’ Attorney General Jeff Sessions continuing to question the wisdom of cannabis legalization — and even hinting at law enforcement crackdowns — investors in U.S. cannabis should be vigilant as they help to build one of the world’s next great industries.

Things are much different in Canada.

While Canada faces challenges covering everything from regulations to supply to manufacturing infrastructure, cannabis entrepreneurs and investors are not proceeding every day with the threat of national or provincial law enforcement professionals hampering business development and investments.

Advantages of Investing in Canadian Cannabis

  1. Lack of regulatory malice. Sure, as Ottawa and provinces hammer out laws and regulations there likely will be hiccups, as well as triumphs. But investors in Canadian marijuana companies do not need to constantly look over their shoulder, wondering if Ottawa will dismantle the cannabis industry. Legal, recreational cannabis is here to stay. In addition, signals from provincial governments so far have been encouraging, and Ottawa’s decision to permit edibles was a big step in the right direction.
  2. Banks are On Board. Cannabis is a multi-billion dollar industry in the United States, and fast-growing — some analysts call it the most rapidly expanding realm of commerce in the United States. Yet banking, the backbone of most industries, is absent. Many transactions are done with cash, and despite this hurdle the marijuana industry in the United States is positively effervescent. Cannabis entrepreneurs and business in Canada, on the other hand, can work with banks. Opening an account and processing credit and debit transactions — taken for granted in every other industry, but not permitted in the United States for cannabis companies — is straightforward in Canada. Lending involves more hurdles, but it is possible and many Canadian cannabis companies have developed strong relationships with bankers. The banking sector is helpful, too, for cannabis investors; simply put, banking involvement is essential for any industry, including cannabis.
  3. Nationwide sales and distribution. Growth in any business requires access to new markets. If you launch a potato chip company in Vancouver and it performs well, you then seek markets across British Columbia. After triumphs across the province, you start pursuing stores in Alberta. Soon, you are chasing fresh opportunities in Ottawa and Quebec and at some point, if your potato chips are awesome and your management team is savvy and hard-working, those chips are available from Whitehorse to Halifax. This growth model applies to nearly every sphere of business and in Canada that includes cannabis. Yes, laws might vary between the provinces, but with the “it’s legal” imprimatur of the Canadian government significant roadblocks are removed. Edibles companies and grows, for example, should be able to sell their products in provinces across Canada. Growth? In the United States growth has been tremendous, despite manifold complications including an inability to ship marijuana products across state lines. In Canada, the most vexing complications have been removed. Growth here could be powered with jet fuel.

Canada Ripe for Marijuana Investors

In sum, people and companies seeking investment opportunities in the flourishing marijuana industry have manifold opportunities, from grows to brands to ancillary businesses. Investors should strongly consider all of the above in Canada, the first nation in North America to legalize marijuana nationwide.