These are 3 of the Most Attractive International Cannabis Markets…

While Canada’s cannabis market continues to be under pressure, companies are expanding into emerging international markets and this a trend that should accelerate over the next year.

Some of the markets that are seeing an influx in the number of companies that are levered to the cannabis sector include but are not limited to Brazil, Colombia, Israel, Mexico, Spain, the United Kingdom (UK), France, and Germany.

Today, we want to highlight 3 international markets that we expect to continue to attract North American cannabis operators and consider these countries to be attractive long-term growth opportunities.

France is an Up-and-Coming Cannabis Market in the EU

On several occasions, we have highlighted Germany as the most attractive cannabis market in the European Union (EU). Although we remain bullish on the opportunity there, we are bullish on the recent developments in France.

Last month, 31 senators in France co-signed a letter that requested authority to launch a consultation process to propose legislation to legalize recreational cannabis. The senators believe that decriminalization is not the right direction for the country and argued that legalization is a social issue that should be adopted by public authorities.

Although we expect the process to legalize recreational cannabis in France to be extensive and time consuming, we believe the push by the senators shows how sentiment has changed in a ultra conservative market.

Tilray Brands Inc. (Nasdaq: TLRY) (TSX: TLRY) is one of the few companies with leverage to France and we will monitor how its management team is able to develop a brand to capitalize on the market.

Is Mexico the Future of the Latin American Cannabis Industry

We consider Mexico to be the jewel of the Latin American cannabis industry and hope to see clarity on the government’s plan to legalize cannabis. So far the legislation has been met with resistance from the Senate and we believe this has put pressure on companies with leverage to the Latin American market.

Although we are the most bullish on Mexico in Latin America, we cannot ignore the advancements by Colombia’s cannabis industry. Over the last year, we have seen improving sales numbers in the country and believe that Khiron Life Sciences (OTC: KHRNF) (TSX Venture: KHRN) and Flora Growth Corp. (Nasdaq: FLGC) have the most attractive leverage to this region.

During the last year, both Khiron and Flora have focused on expanding into markets in the EU and this is a trend we are favorable on. We expect to see an increasing amount of cannabis being exported from Colombia and imported by countries in the EU. We believe the market has not yet assigned much value to this region.

Israel is a Burgeoning Cannabis Market

We consider Israel to be one of the most attractive international cannabis markets and have noticed rising sales from companies which are levered to it. When compared to Canada or the US, the cost to cultivate a gram of cannabis is much lower in Israel. As a result, the economics that are associated with cultivating cannabis are much more attractive in Israel and our readers should be aware of this.

Another pillar of our thesis on the Israeli cannabis industry is related to its location. By having leverage to Israel, cannabis companies can ship products faster and cheaper to the EU. We consider the lower shipping costs to be an underappreciated part of Israel’s cannabis market and will monitor how the industry evolves in 2023.

Cronos Group (Nasdaq: CRON) (TSX: CRON) recently reported quarterly earnings and recorded strong revenue growth in Israel. We believe the company is well positioned to be a long-term beneficiary of the growth of Israel’s cannabis market and want our readers to be aware of its leverage to it.

Last year, Aurora Cannabis Inc. (Nasdaq: ACB) (TSX: ACB) announced what it believes to be the largest shipment of medical cannabis to Israel to-date. The Canadian cannabis company has benefited from being an early mover on the Israeli cannabis market and we anticipate that the region will be a more significant part of its growth profile in 2023 and beyond.

If you are interested in learning about companies which are positioned to capitalize on the global cannabis market, please send an email to support@technical420.com with the subject “Leading International Cannabis Operators” to be added to our distribution list.

Share

Tags

Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

Top Stories