Cannabis Stocks: Understanding the Market

by Travis C | Nov 30, 2018 | Blog, Science & Technology

With Canada’s legalization passing this year, the stock market, more specifically cannabis stocks, are exploding.

The United States was the largest legal cannabis industry in the world with just the few states that have legalized. That all changed when Canada legalized cannabis on the federal level.

Canada created a national industry that spans the entire country, with a government managed program that handles distribution. Being the first first-world and G-7 country to enact widespread legalization, Canada’s stock market has seen a surge in new cannabis IPOs.

Cannabis Stocks in the US

Canada has the ability to allow cannabis businesses to go public now that it is legal. The United States still classifies cannabis as a Schedule 1 narcotic with no evidence of medical benefits (I still laugh out loud when I type that), and such does not allow legal, recreational cannabis companies to participate in the national stock market.

This puts cannabis businesses in the US in an awkward position. Unless they are an already listed pharmaceutical company that is creating a cannabis-derived medicine. Also with hazy laws currently regarding CBD, companies like Charlotte’s Web are able to be listed.

Other than CBD companies and pharmaceutical companies, the main stock options related to the legal cannabis industry is the supply businesses, i.e. the pick and shovel sellers. To elaborate, during the gold rush, a bunch of people may have gotten rich by finding some gold, but a lot more people got rich selling the picks and shovels to find it.

The majority of cannabis-related stock options in the US currently consist of packaging companies, safety technology companies, equipment companies (hydroponic equipment distributors), consultants and R&D companies or pharmaceuticals.

Cannabis Stocks in Canada

Due to Canada’s new laws and accessibility to the CSE (Canadian Securities Exchange), businesses operating in legal cannabis states in the US have started to list their companies north of the border. Companies like MedMen Enterprises and Green Thumb Industries are American companies that will be listed on the CSE.

It would appear that the majority of companies from the US joining the CSE are vertically-integrated, with businesses throughout the country in many different realms of the industry, from real estate to licensing to distribution. And while it is more difficult to invest in the Canadian stock market from the United States, it is possible.

Other than American companies listing their companies on the CSE, the majority of cannabis stock in Canada is, well, Canadian. With no worry of federal scrutiny, cannabis businesses in Canada can operate without problems from the government, build businesses and eventually list them. For this reason the CSE is expected to consistently list more and more Canadian cannabis stocks as the new industry grows and more businesses thrive.

So while Canada’s new industry is quickly expanding and opening up stock options in the Canadian stock market, the US market in terms of cannabis stocks is still struggling. The larger companies that are taking advantage of the CSE from the US are already multi-billion dollar companies, and thus will be highly sought after stock.

It most likely won’t be until federal legalization passes in the states that we will see cannabis stocks really start to appear for Americans to add to their portfolios. For now, you can invest in pharmaceutical companies, holding companies, and some others. It is also possible that if demand grows enough for the American cannabis stocks listed in the CSE, it will become easier to invest from the states. What will happen is still uncertain.

Canada Legalization Guide: Things to know

by Travis C | Oct 17, 2018 | 420 News, Blog, Business, Culture

It’s October 17th. Canadian cannabis is now fully legal. And it’s a big deal.

What makes the legalization of Canadian cannabis so important is that Canada hasn’t just decriminalized cannabis like some states in the US and other countries. They fully legalized it.

That makes Canada the second country in the world (behind Uruguay) and the first G7 country to legalize the production, distribution and consumption of cannabis.

Being a first-world country with a very large economy, it’s fair to say that all eyes will be on the nation up north to determine the viability of widespread cannabis legalization. While big business and governments are watching for success, we the people get to enjoy legal, Canadian cannabis anytime we visit the Great White North.

But before you grab your jacket and head to Ontario, here’s the essential information to know about Canadian cannabis legalization.

Where to buy legal Canadian cannabis

Each province in Canada is different when it comes to how cannabis will be sold. In some, consumers can only buy their cannabis from the government through an online store. Other provinces will have privately owned and operated dispensaries opening their doors to Canadian cannabis lovers.

For now, it would appear that most cannabis sales starting out will be through the government. Quebec now has 12 government-run dispensaries open, with government employees taking up the positions of budtenders. Saskatchewan will have 51 privately owned stores, and Alberta will have 17 as well as online sales through the government.

What’s the legal age for Canadian cannabis?

In the majority of provinces the legal age for cannabis consumption is 19. Quebec has their current legal age at 18, but will most likely raise the age to 21 in the near future.

Just like alcohol, supplying cannabis to minors carries a heavy offense, with up to 14 years in Canadian prison.

How much can I buy?

This one is simple enough. Country-wide, Canadian cannabis consumers will be allowed up to 30 grams (just over an ounce) of legal cannabis. Since Canada will not be allowing the sale of edibles or concentrates for another year, there is no need for a policy like that of Colorado.

Colorado’s policy allows consumers to purchase one ounce of flower per day, or the THC equivalent. That means that instead of an ounce of flower, a Colorado consumer could instead get 8 grams of concentrates or 800mg of edibles, roughly the equivalent THC of an ounce of dry flower.

Where can I smoke?

Similarly to how age limits in provinces are set, so are the local laws regarding consumption of Canadian cannabis. Ontario, British Columbia and Alberta will allow people to smoke cannabis wherever cigarette smoking is allowed. This makes streets and parks fair game in Ontario, but British Columbia has blocked smoking in parks or community beaches.

Halifax will actually have designated smoking areas on municipal properties that consumers can find through a Google Maps-esque website with green smoking signs signifying the safe zones. While there aren’t any legal cannabis clubs for social consumption, there have been many operating in the black market for years.

Vancouver and Toronto are a couple of Canadian cities known to have thriving cannabis cafes and lounges that fly under the radar. So for most, the enjoyment of legal Canadian cannabis will be at home or a friend’s in a private setting.

If you live in Canada, there’s more to know about growing you own cannabis, driving high and criminal records that you should read up on. And while you enjoy that tasty, legal, Canadian cannabis, tune into the new episode of The Real Dirt Podcast!