Topic: Cannabis Investing

Cannabis in the news November 7, 2018

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Three weeks after legalization, news on cannabis and cannabis stocks continues to mount. We carefully filter all of the stories and select the ones that should mean the most to you as a Canadian investor.

1. A growing number of medical cannabis users say they’re worried Canadian suppliers have prioritized the recreational market over filling their prescriptions.

Advocacy group Canadians for Fair Access to Medical Marijuana has been fielding complaints from its members since the legalization of recreational cannabis on Oct. 17, 2018.

There is no direct requirement for producers to prioritize the medicinal market over satisfying recreational demand.

Health Canada, in an email to the CBC, says licensed producers reported more than 90,000 kilograms of dried cannabis and 41,000 litres of cannabis oil at the end of September.

While recreational demand has been brisk across Canada, it was likely no more than a fraction of that supply.


2. Cannabis companies are looking to Asia for significant future growth, despite current bans on marijuana use.

Hong Kong hosted the Cannabis Investor Symposium on Thursday, drawing industry executives as well as local residents. That attendance hints at the kind of future demand if cannabis users succeed in getting East Asian governments, such as China and South Korea, to change their laws.

“When people see legalization in the U.S. is being accepted, it’s very likely the same trend will happen in Asia,” Jim McCormick, CEO of marijuana packaging company KushCo Holdings, told Bloomberg News. “Sooner or later, it’s going to happen.”

For now Japan has joined China and South Korea in cautioning their citizens against cannabis use while visiting Canada.


3. A new report is suggesting a complete opening of the U.S. market would more than justify the current high valuations of Canadian cannabis stocks.

“We believe current valuations for Canadian LPs are elevated when only the Canadian cannabis opportunity is considered,” write the authors of the Bank of Montreal report, analysts Tamy Chen and Peter Sklar.

The report pegs the value of the global cannabis market as $194 billion in seven years. That depends on the U.S. and those international markets.

Mexico is the latest country to open the door for legal marijuana sales: last month, the Supreme Court  ruled a ban on the drug unconstitutional.

Bank of Montreal has been among the most active of the Big Five in underwriting cannabis-related deals.

4. The U.K. has now added cannabis to the list of medicines available through its National Health Service.

The addition was made November 1, 2018; it means medicinal cannabis can now be prescribed by specialist doctors.

The change is the result of lobbying by advocates and public opinion, which has softened in its opposition to legal cannabis use.

Still, not everyone will have access. Doctors will prescribe cannabis-based products on a case-by-case basis. Even then, the patient must first have tried licensed products.

A leading U.K. psychiatrist suggests pain, multiple sclerosis and epilepsy patients are among the most likely to immediately win prescriptions.


5. Molson Coors suggests it may well be the first to bring a cannabis-infused drink to the market in 2019.

Molson CEO Mark Hunter told analysts last week that the company expects to launch its drink under the brand name Truss. The beverage giant announced a joint venture with cannabis producer Hexo even before legalization on Oct. 17.

The federal government has yet to reveal a planned date to legalize cannabis edibles. Still, it has pledged to add those candies, baked goods and drinks by the end of 2017.

Canopy Growth and Constellation Brands are also expected to bring their own drink to market as soon as it is legal. Smaller producers will likely add to the non-alcoholic drinks market within weeks, or days, of the Molson launch.

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