Eight U.S. states just voted to legalize medical or recreational cannabis. That is great news for the North American cannabis market. However, I see an even stronger catalyst set to hit in April of 2017. There is a strong probability Canada will be voting on legalizing recreational cannabis consumption. This would be a bonified game changer, giving birth to a $10 billion market almost overnight. This is an event every cannabis investors needs to follow.
Canada’s cannabis friendly legal and regulatory environment is helping its cannabis companies establish first mover advantages in international markets. Case in point – Canopy Growth Corp (CGC), Canada’s largest medical marijuana company, just purchased MedCann, a German medical marijuana distributor for $7.2 million. Germany is the largest economy in Europe. Although Germany legalized medical marijuana in 2005, actual cannabis production is still illegal – all cannabis products must be cultivated outside of Germany and imported into the country. That creates a great opportunity for Canopy to fill the gap. The acquisition should give Canopy a nice revenue jolt but more importantly a platform to expand its footprint across Europe.
As the cannabis industry grows, I expect product branding to become just as important as it is in other consumer industries. Think Starbucks and Jack Daniels. The Trailer Park Boys just inked a deal with Organigram (TSX.V: OGI), Canada’s third largest medical marijuana company, to develop a branded line of marijuana products. I view the partnership as a win for both sides.