During the last year, the cannabis industry has benefited from the growth of international markets and this is a trend that we continue to closely follow.
From Israel to Argentina, Germany to Jamaica, we have seen several countries jump on the legal cannabis bandwagon. Companies that are levered to these markets have formed strategic relationships with leading Canadian Licensed Producers (LPs) which are starting to benefit from being able to export to these markets.
Although Canada’s cannabis export business has been recording strong growth, the import market is pretty much non-existent. Recently, we have heard complaints from several international cannabis producers as it relates to Health Canada’s willingness to grant import licenses which has held back the growth of these international businesses.
According to an article on MJ Biz Daily, small operators that are based in international markets have been the most affected by Health Canada’s decision to not grant import licenses. As a result of this, many of these operators have forced operators to shut down operations and this is not a trend that we are favorable on.
We believe that one of Health Canada’s reasons to not approve import licenses is related to the amount of cannabis is being produced domestically. On average, Canadian LPs have been steadily ramping up production capacity and there is a glut of product on the market.
Although Canada’s legal cannabis market has been reporting improving monthly sales numbers, leading Canadian LPs have been forced to close production facilities. The reason for the closures is related to companies expanding too large, too fast and this has put pressure on the entire Canadian cannabis sector.
The cannabis 2.0 market is expected to be a major revenue generator for the Canadian market and refers the cannabis derivative products (edibles, topicals, vape pens, concentrates, drinkables, and more). We expect the cannabis 2.0 market to lead to an increase in the amount of demand for cannabis and will monitor how the trend changes in the back half of the year.
Over the next year, we expect the international cannabis market to record incremental growth and expect markets like Germany, Israel, and Colombia to record substantial growth when compared to the prior year. We have been focused on identifying companies that would benefit from the trend toward the international market.
If you are interested in learning more about leading international cannabis companies, please send an email to email@example.com to be learn more.