The American Weed Industry Should Prepare To Be Overtaken By Canadian Investors
Great White North investors are already claiming equity stakes in the legal weed world.
In case you hadn’t heard, Canada is crushing it, in regard to the legal, and increasingly growing more global, marijuana industry. This past spring, Prime Minister Justin Trudeau proposed the Cannabis Act, an expected-to-be passed bill that would legalize recreational ganja consumption for responsible and consenting adults come July 1, 2018. And in late May, Health Canada moved to streamline the application process for would-be producers looking to get a foothold in the weed industry. With licensed stakeholders entering the Canadian cannabis space more easily, and legalization paving the way for an increase in weedy innovations, Canada is most certainly on track to dominate the weed world—literally.
As Vanmala Subramaniam reported for VICE Money, Canadians have the advantage of being the first country to stake a big claim in the global weed industry. With The Netherlands, Canada is the one of only two countries already legally exporting medicinal marijuana, which is a big deal if you're on the cusp of a global spike in demand for the drug. Indeed, as more producers receive licensing, and the space sees a regulatory framework, Canada will be in an ideal position to meet said accelerating consumer needs.
And, as KINDLAND has reported in the past, America’s nonsensically slow adoption of legal weed has essentially taken us out of the running. Editorial Director Allan MacDonell wrote this past November:
“Maybe it’s poetic destiny that Canada is poised to become the first international superpower in the global cannabis trade. More likely, Canada’s primary advantage in world domination is that the United States federal government is dragging its feet on marijuana and ruining everything for American entrepreneurs. A recent Financial Post analysis suggested that Canada’s marijuana producers are poised to capitalize upon the swell of weed normalization in the United States, and will forge ahead in ways that no U.S. weed company is free to do.”
In fact, Canadian investors are buying up American weed companies at a dizzying pace, Forbes reports. With a finite amount of opportunities for Canadians to invest in cannabis enterprises in their own country, a growing number of venture capitalists are heading south of the border, eager to influence and build American businesses as well.
As Andy Williams, CEO of Medicine Man, a chain of marijuana dispensaries in Colorado, told Forbes of the Canadian investors:
“Their whole play is to gobble up everything they can. When I tell them a price I want, which is high, they don't even blink.”
Of course, there are still challenges to infiltrating a foreign industry, especially one illegal by the Federal government's standards. With residency requirements having non-natives lost in a sea of paperwork, and convoluted legislation that varies between states, some Canadian investors pour as much money as they can into an American weed business without actually buying the organization, simply as a means of gaining control. Canada’s interest in American pot could not have come at a better time for growers, though. After years of battling federal opposition and draconian restrictions, many U.S. cultivators are looking for a simple, yet lucrative exit strategy.
Luckily for them, Canadian producers are proving to be more than happy to take said massive cannabis grow-ops off of their plates.