Canadian Law Group

Cannabis in Canada: One year later Here’s where to grow your U.S. Green

Hemp, Cannabis, Canada

This October marks the One-year anniversary of Canada’s legalization of cannabis (or marijuana). Here is a valuable update for our readers about what’s happened and what you can expect to see in Canada and the USA:

On October 17, 2018, Canada became the first industrialized country to give the green light to the recreational marijuana industry. Adult-use weed from Canadian licensed-stores generated CA$53.68 million in October, and by July sales hit a whopping CA$104.5 million.  Canada’s first year of full legalization will likely generate between CA$950 million and CA$1 billion, and they are forecasted to do around $5 billion annually within five years.

At this time, only 29 U.S. states have legalized cannabis (or marijuana). Many states still uphold their anti-cannabis laws. Some allow it for medical usage, but not recreational. The U.S. Federal government, on a national level, has yet to decriminalize the growing, selling, and buying of recreational cannabis.  How confusing. And this confusion has caused investor uncertainty in the U.S.A.  In the meantime, a “braindrain” is going on where highly specialized growers, scientists and investors from the U.S. are making their way to Canada to develop a successful enterprise, free from the chaos of the confusing American stance on cannabis.

Many expect national legalization of cannabis in the United States within the next few years. But what to do in the meantime? We believe that U.S. businesses and investors have a great window of opportunity to “grow” their money - from concept to brand - in Canada. Our Canadian Law Group, which has offices in the USA, has already helped many jumpstart their green by mobilizing executives and investors into enormous Canadian opportunities.

Still, for those sceptic or unsure about Canadian opportunities for Cannabis, keep reading.

Will Canada legalization stick?

Yes. It may have been the liberals who kept their election promises to legalize cannabis, but no other party plans to repeal the law.  The practice to buy cannabis legally has also grown. From June 2018 to June 2019, legal sales have roughly tripled and legal medical and recreational marijuana counts for 26% of the market.  The Canadian government’s top priority in this area is to replace black-market sellers with legal retailers.  But consumption and use are on the rise in general for both medical and recreational users.

Join the Green Rush

In the past year alone, approximately 110 cultivators, processors, and sellers have been issued a license by Health Canada under the Cannabis Regulations. These license holders are authorized to either sell to wholesalers, distributors who supply retailers, and/or individuals who are registered as medical recipients. Licensees may also conduct activities such as possession, transportation, storage, destruction, research, development, and bulk sales to other federal license holders. 

Is all of Canada the same? Where should I start?

No. Specifically regarding Quebec compared to the rest of Canada. Given the governmental control over the cannabis retail sales in Quebec, the demand for product is higher than in the rest of Canada. While there is still a demand surplus in the privatized Cannabis industry all over Canada, Quebec would be the ideal place to get started. If you are considering investing in the Cannabis industry, the best places are Quebec and rural areas where the large companies have not yet settled.

How is the Supply and Demand in Canada?

There is high demand, but lack of supply. Legal sales should be far better in Canada, but retailers have been slow to open in some regions such as British Columbia and Ontario. That means at this point, Canada needs you. The demand for legal product is there and it’s waiting. What better place to start to grow your investment in the cannabis industry, than a country that is close by, already fully legal with no intention of repeal, and has consumer demand?

Please contact our Canadian law group vmalka@ckrlaw.com we can help you “grow” your investment in Canada and set you up for local success when the time comes.