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The shares of Tilray Inc. (TLRY) have increased by 630% since the beginning of the year. Canopy Growth Corp. (CGC) is up 133% this year. Aurora Cannabis Inc. (ACBFF) is up 55% over the year. Medmen Enterprises Inc. (MMNFF) is up 118% this year.
The cannabis industry, volatile but promising, may have just experienced another downwind.
Cannabis will be completely legalized across Canada starting Wednesday, October 17. Canadian law allows provinces to adjust certain rules as they see fit, but the legal age to buy has actually been set at 18.
Industry experts continue to exercise due diligence in determining the amount of cannabis spending, but this number is likely to be significant compared to other major global industries. "It's certainly a very big number," said TheStreet Smoke Wallin, CEO and founder of Vertical, a Los Angeles-based cannabis vendor. Constellations Brands Chief Operating Officer Bill Newlands told Jim Cramer at the initiation session at Action Alerts Plus on Saturday "Our view is that over the next 10 years, this trade will be more of $ 200 billion worldwide. " He added, "And some would say [that’s] underestimate the case. "
The cannabis space has been compared to the alcoholic beverages industry, as beverages are becoming a potentially intriguing product for cannabis users, which could weigh heavily on the drug market. long-term alcohol. "If the alcoholic beverage sector is about $ 260 billion, cannabis, combined with the medical side, may be more important than that," said Wallin. The global cannabis market is currently worth less than $ 30 billion and, depending on the context, a relatively optimistic view of Grand View Research suggests that the global market could reach $ 146 billion by 2025. Thus, the easing of regulation in Canada starting on Wednesday could very well propel the industry heights.
For investors, the purchase of cannabis stocks at all levels may not be the best strategy. While this may certainly be lucrative, a better strategy might be to buy stocks in the right companies because the market share in Canada between sellers will be won and lost with branding.
No company in the region necessarily has a competitive advantage, so market share could be spread fairly evenly. At this time, Canadian cannabis vendors are limited to generic packaging and are not allowed to advertise that differentiates their products, as shown by the Canadian Cannabis Act. "What would you do advertising if you could not differentiate yourself?" Wallin said. "There could be a very long discovery process in which consumers have to find out for themselves," he said.
In addition to Canada's expansion, this could have positive consequences for the United States, since legalization in Canada could encourage the United States to do the same. "Absolutely," said Wallin. He added: "Now, there is so much dynamics, and Canada is helping us in this dynamic, so we are not very far, and yes we are getting ready."
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