The marijuana industry has become one of most booming industries in the United States. Opportunities for profit in the cannabusiness have only just started to be realized since the 2014 legalization of recreational cannabis in Colorado and Washington. Canadian marijuana enthusiasts are trying to keep up.
More and more states in the U.S. have started to become more accepting of cannabis use. Whether it be legalizing cannabis, making cannabis legal for medicinal purposes, or decriminalizing use of cannabis, a more tolerant society of its use has started to become established. However, it’s not just the United States that has taken on this accepting nature of cannabis. Countries around the world have also started to reap the benefits. For example, Canada legalized cannabis for medicinal use back in 2001, and it is expected that recreational adult use will be in place by 2017. With recreational use on the horizon why hasn’t there been a rise in share prices for cannabis stocks? Numerous companies have publically traded, and prices often fluctuate much like gas prices. For example, Tweed opened at $2.50 in 2014 and has been between $1.50 and $3.70 for the past year.
One reason that Canada hasn’t seen a spike in share prices for cannabis stocks could have to do with the federal task force. The task force will determine and outline the upcoming opportunities of recreational adult cannabis use. The market could be waiting to see the results of this task force to get a better picture of potential profit areas. The task force will release a report in November 2016, and it may give the market a better idea of the trend.
The Marijuana for Medical Purposes Regulations (MMPR) is expected to receive amendments later this year. This will give the medical market a better understanding of what to expect with cannabis, and some experts expect to see a pharmacy model arise. If the results come out as expected, medical cannabis sales are expected to grow substantially. The market has the potentially to increase by $660 million per year by 2024.
Large Pharmaceutical chains like Loblaws and McKesson have the ability to benefit substantially from this new model. Most Canadian Pharmacy chains are privately held, but some like Jean Coutu are still stand alone companies. The reality of cannabis in Canada may have more to do with control and less to do with moral concern.
If cannabis does take off like expected, pharmacy companies are likely to be standing on the front lines and benefitting substantially.