Canadian Cannabis Companies: Should we invest?
Updated: Oct 18, 2018
I was talking over drinks and dinner with a couple of Canadian professionals last week, and they were explaining how they are investing in the two strongest cannabis businesses in Canada and how happy they are with the results. Which made me wonder, is there some substance to the fear felt by many about Canada dominating the cannabis industry?
Well, as experts have explained, although many believe Canada is new to this game, turns out that our neighbors to the north legalized medical marijuana in 2001, and thus has had time to take things in stride and evolve at a gradual pace. In addition, Canada is set to legalize cannabis for recreational use on October.
Meanwhile, the U.S. market is fractured. Cannabis is allowed in many U.S. states, albeit with a variety of restrictions across states; moreover, its future is uncertain, at least until the federal government liberalizes legal marijuana laws. On the other hand, optimists see light at the end of the tunnel, claiming that the legal marijuana market in the USA will triple in the next five years.
What people seem to be doing, however, is investing in Canadian stocks traded in the market. A recent article on the Investopedia site lists the top 10 cannabis companies in Canada, warning that these stocks are a higher risk investment than more mainstream ones. The companies listed are, in order of appearance: Canopy Growth Corp., Aurora Cannabis, Aphria, Inc., The Cronos Group, The Hydropothecary Corporation, CannTrus Holdings Inc., OrganiGram Holdings, Emerald Health Therapeuticas, Supreme Cannabis Company, and Namaste Technologies.
At least Canopy Growth is listed in the New York Stock Exchange (NYSE) as TSX.WEED, so, if curious, you might want to check it out there. In fact, the top 10 cannabis companies have been up 37 percent according to Small Cap Power, and Canopy Growth Corp is leading with a 79 percent surge. Because people are investing in growing numbers in Canadian cannabis firms, these companies are receiving influxes of cash that allows them to grow even more. American experts believe that the U.S. market still has time to get all its ducks in a row –mainly, reforming marijuana laws at the federal level as soon as possible—but time is running short and Canadian companies are already reaping gains over U.S. companies. In other words, it is probably not time to panic yet, but there is much at stake.
I would argue, however, that the market does not have to be a zero-sum game. That Canada takes the lead does not mean that the U.S. market does not stand to gain as well. Meanwhile, also check out Aurora, a company that this year took over MedReleaf, and has thus become the largest cannabis company in the world. I know I will!
About the Author:
Trudy Mercadal, Ph.D
New Orleans born with a Latina background, I am a writer, social historian & cultural studies researcher with a doctorate in Comparative Studies. My focus on community and popular culture. Main interests are the ways in which people express identity through arts—such as music, graffiti, and magazines—and their consuming practices, that is, the what (and how) they buy, ingest, eat, and wear. In my personal life, I am a dedicated urban mini-farmer and, also, a certified cheese maker who makes a truly kick-ass grilled cheese sandwich.