Canadian Cannabis Industry Still Holding its Own, According to Some Experts
In Canada, marijuana is big business. In fact, according to stockhouse.com, the Canadian Government’s Statistics Canada website is reporting that the country’s legal cannabis industry generated about $8.65 billion for the country’s economy this past May and contributed about $4.66 billion to Canada’s gross domestic product (GDP) as of May 2020. That’s up about 11% since the same period a year earlier.
In recent months there’s been some discussion about whether the industry can sustain itself after having a highly profitable 2019, but things appear to be going just fine according to those in the industry.
In Toronto, for example, former energy drink executive George Scorsis is among those who continues to lead growth in the fledgling market. His Canadian company, WeedMD, Inc., a Federally licensed producer of cannabis products for both the medical and adult-use markets, is a thriving enterprise that owns and operates a 158-acre state-of-the-art greenhouse and processing facility in Strathroy, Ontario. The company recently posted a 327 percent increase in revenue and announced a new deal through which it will soon begin producing medicinal and therapeutic products under another company’s private label.
“It’s a great time to be in this industry,” says George Scorsis. “While it is true that some companies are experiencing a bit of a sales plateau, our experience is that things are going very well. Also, this industry is still very much in its infancy, and I believe that many very bright days lie ahead.”
He may be right.
Last month, the Ontario Cannabis Store, that city’s only cannabis wholesaler and distributor, received the go-ahead from the provincial government to expand its privately operated distribution network when necessary. It appears that that may take place in the very near future.
“Ontario is expected to open a second distribution warehouse by September, which we believe should drive an increase in sell-in” during the fourth quarter of 2020, wrote Bank of Montreal analyst Tamy Chen to investors, citing industry sources.
Lest you think the boom is all about medical marijuana, think again.
It’s said that many Canadian producers are closely watching the 2020 U.S. presidential election. Depending on the outcome, some believe that mass legalization of marijuana in the States could provide opportunities to Canadians in the industry.
It’s been reported that Canopy Growth, a Canadian cannabis company — one of the largest in the world by market capitalization — signed a $300 million deal in April 2019 to acquire the rights to buy Acreage Holdings, a Canadian-based cannabis company with significant holdings in the United States.
“If the U.S. federal government legalizes cannabis,” writes Ari Zoldan, CEO of Quantum Media Group, LLC, “Canopy Growth will buy Acreage Holdings for $3.4B. If such an event transpires, this will give Canopy Growth a leg up on its competition and position it well for future success across North America, and perhaps even further.”
Meanwhile, the cannabis industry is getting support from the government.
“In July,” Scorsis notes, “Federally licensed Canadian cannabis companies were notified of an extended deadline to pay an annual regulatory fee in light of disruption caused by the COVID-19 pandemic.”
This means that license holders in their first full fiscal year or later fiscal years, who were required to pay the annual fee for the 2020-21 period by Sept. 30, 2020, will now have until March 31, 2021.
What does this mean for customers, medical or recreational? Well, Prime Minister Justin Trudeau has a progressive attitude toward the industry, but there are rules that need to be followed.
According to Thrillist.com, “in most provinces across Canada, the legal age to purchase and consume marijuana is 19. However, in Alberta the legal age is 18, and the newly elected government in Quebec raised the minimum age to 21.”
And as for where smoking is legal, the law states that in Ontario, British Columbia, and Alberta, people can smoke cannabis anywhere they can smoke cigarettes. Recently, though, Halifax also designated 84 designated zones on municipal property throughout the region.