24 Jan Canada’s Next Big Export
Will Donald Trump Help Canadian Weed Companies?
The inauguration of Donald Trump is very good news for many Canadian cannabis companies. American marijuana companies are preparing for the worst with Trump because he plans to keep marijuana illegal on the federal level. Also Mike Pence, Trump’s VP governs the state of Indiana with the harshest marijuana laws in the whole US.
This federal legislation in the US makes it difficult for American companies to raise capital investment and collaborate with the scientific community for new technology. This leaves a market gap for Canadian companies to develop more intricate and developed processes for the production of cannabis. For example, Tantalus just opened a new greenhouse with quality control mechanisms that use the minimum amount of energy and water necessary for commercial production. This types of innovation can only flourish in a market where capital expenditure and research is encouraged.
What Happens if the US Legalizes on the Federal Level?
John Fowler, CEO of Supreme Pharmaceuticals says Canadian companies are poised to be buyers of American cannabis firms once the drug becomes fully legalized across the States in 5-10 years.
“I’ve always maintained that the longer cannabis remains legal in the United States, the bigger a head start Canadian companies have”. Canadian cannabis companies have large capital, hard assets, and real infrastructure compared to their southern counterparts.
This raises the ever-important question, will Canadian companies be able to export to the United States? This looks increasingly unlikely with the hard stance on federal drug policies the Republicans are likely to take. However, Canadian companies are still able to be creative with their approach in entering and capitalizing on the American market. There are over 3,000 fragmented companies supplying the US medical market but only 30 in Canada. This provides a boost to Canadian companies because their patents, innovation and branding will be invaluable to 1 of 3000 companies in the US looking to get a foot up on the competition
Marijuana Business Environment
The US Drug Enforcement Agency (DEA) is not keen on American investment into Canadian cannabis. A large investment fund recently cancelled talks with a Canadian cannabis company over investigation into their investment in cannabis. American innovation is limited in the cannabis industry but Canadian companies can take advantage to proliferate and grow.
When US politicians finally pull their head from their ass and realize marijuana is a medicine, Canadian companies will flourish. Marijuana will become one of Canada’s greatest industries if we can continue to create a business environment that encourages investment, research, and innovation.
2030: Canada’s largest natural exports: Timber, Water, and Weed.
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