Marijuana lights up in Canada
The Bob Pritchard Column
A lot has happened with the marijuana industry. Up until recently, it was a drug that was considered harmful. People lost their jobs or couldn’t even get a job because of the drug. It was life changing, but mostly because of the stigma behind it.
However, a lot has changed in the past two years. Some really big examples can be seen with government legislation and the medical industry. Canada’s public health agency, Health Canada, reported that the number of people in the nation who were registered to use medical marijuana reached 235,621 by the end of September 2017. That’s a 40% increase from just six months earlier. That means 0.6% of the country’s population of almost 37 million were using marijuana for medical reasons. Its not a lot, but it is rapidly growing.
In 1995, a year before California became the first U.S. state to legalize medical cannabis, a Gallup poll recorded that only 25% of Americans supported the idea of making weed legal. This past October, Gallup showed over 66% were in favor of full legalization.
The U.S. Congress continues to make it exceptionally hard for legalization in America. It’s still illegal and has no recognized medical benefits. The U.S. is missing out on a lucrative opportunity because of its stubbornness when it comes to legalizing cannabis.
However, Canada isn’t wasting any time. It legalized medical marijuana in 2001 and has Health Canada oversee licensing and regulation with the substance. Now it looks like Canada could be the first developed country in the world to approve recreational use of marijuana in August or September of this year.
Investors and companies have begun to see the incredible potential and opportunity associated with cannabis. The Canadian developments have had four of the largest publicly traded firms surging — investors want in. The combined market value of the four largest publicly traded firms has reached more than $USD 780 million. Together, all marijuana companies on Canadian exchanges have a combined market value of about $USD 25 billion.
If and when full legalization happens in Canada, it’s going to bring a huge increase to the market’s capital potential. There are going to be a lot of companies that want to be a part of this booming industry.
With the demand for marijuana steadily increasing, there are 20 major companies that began in the mining or oil and gas sectors and have now shifted towards Canada’s marijuana industry. These companies realize it would be more profitable to be part of the marijuana industry rather than spend a lot of money on mining and not actually earn a profit from that particular resource.
Using mining companies as a way to publicly trade makes it easier and faster to list on the public exchange. Companies don’t have to undergo a full securities commission review or file a prospectus, which is what they would have to do for a traditional initial public offering. Canadian exchanges demand that companies present a viable plan to sustain operations and also submit to a review.
The potential is obvious.
If the whole world smoked a joint at the same time, there would be world peace for at least two hours. Followed by a global food shortage