Nationwide recreational marijuana legalization makes Canada a fertile landscape for ganjaprenuers. While some Colorado companies are already cashing in on opportunities north of the border, the effect on the local cannabis landscape is expected to be mostly invisible to consumers, industry advocates say.
People began lining up in the wee hours of Newfoundland time Wednesday morning to make the first legal recreational marijuana purchases in Canadian history. It was a party atmosphere in many places, save for Ontario. That province, home to more than 13 million people and the country’s largest city, Toronto, is still ironing out rules and shops aren’t expected to open for months yet.
“I’m so disappointed,” Colorado cannabis entrepreneur and industry advocate Dan Anglin said Wednesday afternoon from outside his hotel in Toronto. “I was it expecting it to be like Jan. 1, 2014, (the day recreational sales became legal in Colorado) but it is nothing like that here.”
Anglin’s visit to Canada has already been a success. CannAmerica Brands, the company he co-founded and leads as CEO, went live on the Canadian stock exchange Monday, opening at 97 cents Canadian, above his expectations. It closed Wednesday at $1.03 Canadian after a sell off drove many Canadian cannabis stocks down.
“The Canadian market is hot for cannabis right now,” he said. “With national legalization, the environment is ripe and right.”
With a market cap of 50 million shares, the strong showing on the CSE means CannAmerica — which in addition to its flagship cannabis gummies, also sells branding, licensing and intellectual property to cannabis operators outside of Colorado — is now flush with capital to help fuel growth. The company, previously named Americanna, is already working with licensees in Nevada and Maryland. It has aims to expand into California in the next six months, and, as local regulations evolve, potentially Canada later.
Kristi Kelly, executive director of the Marijuana Industry Group, Colorado’s largest cannabis trade organization, sees access to capital being the biggest draw for local companies looking north. Because marijuana remains illegal at the federal level in the U.S., companies are cut off from traditional banking and other financial resources.
“Any new market, Canada’s included, is attractive,” Kelly said. “The added thing Canada offers is a national perspective and pathway forward for business.”
But Kelly does not expect the inviting regulatory environment to lead local companies to relocate to Canada.
“There is probably going to be a little bit of brain drain of subject matter experts here who want to take advantage of these new markets, including Canada,” she said. “For brick-and-mortar (businesses), I think there is still an interest in maintaining a toehold in Colorado’s marketplace.”
Citing more permissive public consumption laws that allow consumers to indulge in places outside their homes — rules Denver is still tangling with — Anglin said he could see Canada becoming a premier marijuana tourism destination. But Kelly isn’t as concerned about that. She pointed to recent research delivered to the Colorado Department of Revenue that found state residents bought 90 percent of the marijuana sold in the state last year.
For all the hoopla surrounding the local industry, a Canadian company reached across the border earlier this week to acquire a Colorado business. Canopy Growth purchased Evergreen-based hemp research firm ebbu on Monday in a deal worth $348 million Canadian when stock was included, according to a ebbu spokesperson. The aim, according to Canopy, is to grow better cannabis with ebbu’s help.
Anglin is hoping Canada’s cannabis industry exports something to the U.S.: Motivation.
“Really the message to the United States government is, ‘You are missing the boat.’ Canada has really created an opportunity for economic growth,” he said. “Honestly, it’s time for Congress to follow Canada’s lead.”
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Author: Joe Rubino
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