Macro conditions – Cannabis legalization in the world. Part 1.
Cannabis market, as many investors watching the market consider now, is gradually unfolding in the future MEGA Trend. Of course, there is an opposition to this opinion, investors who see no bright future for this market, or even foresee that this is a next bubble.
What are the reasons for the expectation of future rapid growth?
Globally. 2016-2018 have been the years of legal approval of medical, edible and industrial (and in some USA states and countries also recreational) use of cannabis in one country after another. These countries caused re-consideration (or decision to start re-consider) by many other countries of their legislation in favor of cannabis legalization at least for medical and edible applications.
Canada. 2017 – Canadian government led by Justin Trudeau became the first Government in the world which officially decided to legalize the recreational use of cannabis in the whole country; this should happen in July 2018 after the final approval by the Parliament of Canada. This bold and long awaited decision will have many consequences on the economy of the country. Canadian cannabis market (including many companies from the production chain and processing) will thrive and boost the trend, because so far Canada is the only country permitting legal usage of medical, industrial and edible cannabis and upcoming legalization of recreational use.
Legalization of medical cannabis in Canada (including legalization of its growth) has already granted Canada the leadership role in the medical cannabis export internationally. And this is not just to say about inflow of foreign companies’ listings to the Canadian Stock Exchange (CSE) and Toronto Stock Exchange (TSE) as well TXV (Canadian Venture Exchange).
By Deloitte’s estimation the overall Canadian cannabis market will be about $ 22,6 Billion in 2020 (along with base and ancillary usage). So far Canadian companies are the most active leaders in the world in cultivation and distribution of cannabis.
China. China is cultivating the world’s biggest cannabis hemp areas and is silently rushing now to take over Canadian leadership in cannabis too. Though the legalization of the latter is not yet in place but Chinese farmers already achieved excellent results in hemp cannabis yields. Chinese farmers – growers of hemp cannabis are profiting from multiple industries: they sell stems to textile factories producing high quality fabric which has been long in use by Chinese military. Also they sell seeds to food companies for production of snacks, oil, beverages. As well their consumers are the pharmaceutical companies which buy the cannabis hemp leaves for drugs. And the Chinese cannabis hemp industry is designed to grow very rapidly not only in China but also internationally as it is based on extensive R&D by Chinese scientists of possible use of cannabis. Out of 600+ global patents related to the herb over 50% belong to Chinese scientists.
Australia. The country where cannabis was legalized in 2016 for medicinal use, though the recreational use is still illegal the country tries to avoid strict punitive measures for users. In the very next future the country is going to become the biggest world’s medical cannabis supplier.
To be continued in part 2: European countries, USA, Israel and other countries.