The Biggest Irony Behind Recreational Marijuana's Legalization in Canada
Main · Videos; What countries is weed legal yahoo dating slings we don't saunter to officiate someone to the saunter that they are abated through the first date. Last year, Mexico legalized medical marijuana, while Canada is currently in the final stages of becoming the first developed country in the. Uruguay is the only country in the world right now where recreational and medical marijuana is completely legal. Beyond that, there are around.
All three states have witnessed a significant and precipitous decline in the per-gram price of dried cannabis that began not too long after retail sales commenced.
While economies of scale will help bigger operations survive a significant decline in the price of cannabis, it's pretty evident that, based on what's happened in a select few U. So it's probably not a top-tier priority for cannabis growers beyond Here's what has the Canadian cannabis industry and investors intrigued Rather than devoting their attention to dried cannabis, growers will be focusing on alternative products that bear significantly higher margins and are much less susceptible to commoditization.
This includes cannabis oils and extracts, edible products, and even cannabis-infused beverages. It's worth pointing out that edibles won't be legal come Oct. View photos A vial of cannabis oil next to a cannabis leaf.
Cannabis oils are a particularly popular product that a number of large and mid-tier growers are focusing on. In addition to garnering a higher price point and juicier margins than dried cannabis, oils are a valuable export product. Despite more than two dozen countries having legalized medical cannabis, not all of these countries allow patients to smoke dried cannabis.
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What's more, physicians generally dislike the idea of prescribing a medicine that needs to be smoked. Meanwhile, cannabis oils are almost universally accepted by countries where medical cannabis is legal, and they're a go-to prescription for physicians in these countries. Putting two and two together, growers that make oils a focus should have strong demand for their product domestically and overseas, along with higher margins than their peers.
More than half of the company's sales from its most recent quarterly report were derived from oils, with the remainder coming from dried cannabis. Admittedly, CannTrust is still in the process of expanding its flagship Niagara Greenhouse facility, which will boost its share of dried cannabis production. But it's pretty evident that CannTrust's management team understands the importance of product diversification.
View photos A potted cannabis plant sitting next to a bottle of red wine.
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Infused beverages could be another very interesting dried cannabis alternative. THC is the psychoactive component that gets you "high," while CBD is the nonpsychoactive component best known for its medical benefits. Molson Coors has seen its share of the Canadian beer market shrink over the past decade, and most alcohol companies are now facing the possibility of losing sales to legal cannabis.
By partnering, Molson Coors could add a new channel of sales, as well as share a higher-margin product with a top-tier grower. In short, while dried cannabis might be the oft-talked about centerpiece of legalization, it'll likely take a back seat to cannabis alternatives over the long run.
The Rohrabacher-Farr Amendment, which has to be approved each year, ensures that medical weed businesses can't face federal prosecution for operating in one of the 29 legal states. The short answer is yes, but it'd be tough for him to gut the industry. Current Attorney General Jeff Sessions absolutely despises marijuana's domestic expansion and has gone as far as to send a letter to a few of his colleagues requesting the repeal of the Rohrabacher-Farr Amendment.
Without this amendment in place, Sessions could have a field day. He is a major obstacle to the industry. Are there tax implications for U.
Since marijuana is an illegal drug, U. This means profitable pot businesses are paying tax on their gross profits instead of net profits, leaving them with less to reinvest and hire than a "normal" business. View photos A judge's gavel next to a pile of dried cannabis buds.
Most marijuana companies are cash-only businesses since banks often want nothing to do with them. Basic financial services, even including a checking account, may be off-limits because financial institutions report to the Federal Deposit Insurance Corporation, a federally created entity. What other unknowns are holding the industry back?
There are also concerns about what might happen to adolescent access if marijuana were legalized. It's presumed that legalization would involve a home-grow option, which would in turn give adolescents easy access to weed. Some clinical studies have shown negative impacts to long-term memory for the developing adolescent mind, so this is a clear concern. Additionally, lawmakers are worried about regulating drivers who use cannabis. Unlike alcohol, which has clear tests for impairment, there are no guidelines for cannabis use.
And unlike alcohol, THC from cannabis can stay in a user's system for days or weeks. That makes testing for use and impairment all the more difficult. Are any marijuana stocks making money? Yes, a few actually are. MEDFF reported full-year profits. In terms of their most recent quarterly reports, just Aurora Cannabis and Aphria delivered a profit.
Considering the reinvestment ongoing in the industry right now, most pot stocks are losing money. View photos A bottle of cannabis oil extract next to cannabis leaves on a table.
What pot products offer the highest margins? Despite what you might believe, dried cannabis and edibles offer rather pedestrian margins. Due to changing consumer habits and growing demand, reinvestment is currently gobbling up a lot of this margin.
Instead, cannabis oils tend to have some of the highest margins in the industry. MedReleaf, which tends to target a more affluent medical clientele in Canada, possesses a large chunk of its domestic cannabis oils market.
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How are pot stocks funding their businesses? Since most marijuana stocks aren't profitable, and most have little or no access to traditional banking, common stock offerings in the U. The good news is there's a lot of excitement surrounding marijuana stocks at present, meaning there have plenty of investors to buy these shares. Unfortunately, it also means dilution galore for existing shareholders. Are marijuana stocks listed on major exchanges? Although a few are, like GW Pharmaceuticals, most aren't.
The OTC exchanges have made strides in improving listing standards in recent years, but getting up-to-date financial information on listed companies can still be a struggle at times. View photos A person holding cannabis leaves in their cupped hands. Are there any marijuana ETFs? In less than a month, U. Is the black market a concern? The only question left to be answered is this: Is the green rush right for you?