Legal marijuana comes to Canada. Investors feel the opportunity.
- Canada will be another country where marijuana will become legal by the end of this year.
- Its legalization will bring investors dizzyingly high sums.
Chestervile, Ontario.
It belongs to Hamed Asia, a trader from Ontario, who calls it "vertical agriculture."
He has no knowledge of how to grow marijuana or any other plants. His other kind of business is the installation of office furniture; cabinets, tables and table chairs at the opposite end of the warehouse.
This is a financial boom that has not been seen since the dot-com mania of the late 1990s took place in Canada. The legalization of recreational marijuana, scheduled for the fall, is not only a major social change and a public health challenge, but also a rare opportunity for entrepreneurs like Mr. Asi to be at the forefront of what they hope to become a multibillion-dollar industry.
Opportunity for investors
Opportunities soon arise: marijuana growers have celebrated millions of investments that have not yet made a profit, but are worth billions on the stock exchanges. Cities that are as lucky as Chesterville, Ontario, are hoping that marijuana will reverse the economic downturn. Former politicians and lawmakers who once opposed the legalization of recreational marijuana have now joined or formed companies to invest as well.
Some provincial governments predict that tax revenues from the sale of marijuana will help balance their budgets. And companies that offer every service or product - from real estate to packaging - are waiting for the event.
Mr. Asi's dreams of wealth grow in an old factory that was once full of pallets of Nesquik transported by railroad car. Partner and operations manager at a company called the IDP Group, recognizes the risks associated with what has already become a highly competitive industry.
"We can't do it just because everyone else does," he said in his office, which is not surprisingly equipped with the latest office furniture. "Worry? Yes, 100%. We see how good this industry can be if you do business right, but you have to be really careful. ”
Prime Minister Justin Trudeau fired the first shot of Canada's new gold rush this month by announcing that legalization of marijuana would begin on October 17, months later than on July 1. But as before during the mania of technology companies, there are growing concerns that this boom could cause more disappointment than wealth.
Justin Trudeau's government portrayed the legalization of recreational marijuana - Canada has been using medical marijuana since 2001 - as a way to displace the black market, not as a potential job creator or money for the government or investors. In fact, they promised that marijuana would be available, but by no means promoted.
As a result, the federal government will grant licenses to growers in Canada, and then the provinces will decide how to sell them to consumers. In some provinces, particularly Alberta, the government cooperates with privately owned businesses. Others, like Ontario and Quebec, will essentially accept a change in the system of government business that has been used to sell alcohol since the end of Prohibition.
Under recently published regulations, the advertising and promotion of marijuana will be severely restricted - as will the production of Canadian marijuana producers. The packaging must be uniform and plain, except for the yellow health warning signs and small logos. Even baseball caps, T-shirts and all other promotional items that promote marijuana will not be allowed.
Many large companies have their roots in the medical industry associated with marijuana. But their styles have shifted.
Chuck Rifici, founder and former CEO of a company now called Canopy Growth (more than C $ 8 billion, Canada's most valuable cannabis company), once tried to clear the image and reputation of a marijuana processing company.
The shares of Mr. Rifice's company once exceeded 1 billion Canadian dollars and are now worth just over $ 500 million. However, their ability to increase profits also means that they have the ability to make money. In the first three months of this year, the company recorded a loss of more than 10 million Canadian dollars.
The future after October offers nothing but the promise of money, as cannabis will start to flow into shops and new markets, Mr Rifici said.
Global legalization?
"The rest of the world will also begin to legalize marijuana," he predicted. "So the urgency for me is to have people and the ability to be the first driving force in this new jurisdiction. I think one or two of the big multinational cannabis companies will be Canadian companies. "
But before that, Rifici and its competitors must first figure out how they will behave in the domestic market. "The regulations on marijuana look a bit silly or a little across the line," Rifici said. "It simply came to our notice then. The industry will certainly push for it. "
However, this pressure will be met with strong opposition from the Canadian medical community, which has repeatedly highlighted the health risks of marijuana, especially among users under the age of 25.
Cam Battley, who once worked in the pharmaceutical industry and is now CEO of Aurora Cannabis (market value: C $ 5.6 billion, loss in the first half of this year: $ 20 million), acknowledges that the growing value of the cannabis business may not be justified in any case.
Sources: article , image: standartmedia.co; thestranger.com