Those interested in investing in the legal cannabis industry can look for the U.S companies offering an opportunity. However, as marijuana remains illegal at a federal level, there is a risk for these companies. A large number of investors have, instead, opted to shift their attention to Canada which has a federally legal marijuana program and is expected to become the first nation with legal cannabis access for adults. Apart from the ability to serve its population, the Canadian cannabis industry has a large number of licensed producers involved actively in international markets such as Latin America, Europe, Israel and Australia. Such companies don’t just export but also prepare to acquire a license for the cannabis cultivation along with local investors. One of the most exciting markets for Cannabis Investment, Germany is engaged in distribution through existing pharmacies.
Health Canada is responsible for the licensing and regulation of the Canadian marijuana industry and it has granted about 90 licenses some of which are given to companies with multiple licenses. About 28 companies trade on the Canadian Securities Exchange, TSX Venture Exchange or Toronto Stock Exchange. Many of them are listed on the OTC as well as U.S listings. 15 of these companies could raise selling securities amounting to 1.17 billion CAD. The access to capital is what makes the difference between the U.S and the Canadian marijuana companies. An index for those interested in cannabis investment gives an idea of the performance of the sector. The top tier of the index consists of the biggest producers and it includes six companies generating annual sales exceeding 16 million CAD. Tier 2 includes those that generate sales but not at the same scale as the leading ones and tier 3 are the companies which have acquired the license to cultivate weed but aren’t yet permitted to sell. Overall, the sector has performed well over the last two years.
The top tier includes companies like Aphria, Aurora Cannabis, MedReleaf, Canopy Growth and CannTrust Holdings. U.S. investors willing to buy Canadian producers can open an account which allows trading Canadian securities but also makes it possible to buy the U.S. listings. Another alternative for Cannabis Investment is exchange-traded funds or ETFs. Canadian LPs currently comprise over 80 percent of the holdings of the Horizons Marijuana Life Sciences Index ETF. The decline in prices has not affected the valuations of Canadian LPs. Future sales are expected to increase with the legalization. Aurora Cannabis and Canopy Growth have market caps of about 6 billion CAD while Aphria has 2.8 billion CAD, MedReleaf 1.9 billion CAD, CanniMed 882 million CAD and CannTrust has a cap of 793 million CAD. The caps of the U.S. market are close to 20 percent lower than the Canadian cannabis industry.
Canadian marijuana companies are safer investment options than those in the U.S as it is federally legal and have performed quite well. The psychedelics industry has arrived, and its quickly gaining attention from investors, the emerging sector gained global media attention as two new psychedelic stocks went public. Magic Mushrooms Canada could be the next investment trend as it have a long lasting positive effect on emotional health.