Cannabis still won’t cross borders easily

But the pole position that Canadian companies enjoy doesn’t guarantee long-term success, said Matt Bottomley, an analyst at Canaccord Genuity Group Inc.

“There’s so many countries that still have to come online, and it’s hard to say what Germany and Australia and some of these countries in the EU might do in terms of starting to give favours to their own domestic players,” he said.

A lot also depends on how readily cannabis is adopted by the medical community. As Aphria’s chief executive Vic Neufeld explained to analysts and investors on a call following the acquisition of Nuuvera, expansion into countries such as Argentina depends on how many illnesses doctors are legally allowed to prescribe cannabis for.

“Allowing only (cannabis) oil to service epileptic seizure control, there’s no good business case that allows us to do what we really want to do long term,” Neufeld said. “I threw out a number to the (Argentinian) minister of health several months ago: you bring me five or six approved chronic illnesses that you will allow the medical into Europe and Australia.

There are also logistical hurdles. For example, if you’re flying a crate of cannabis to Australia, the plane can’t touch down in Singapore, a country with harsh anti-drug laws. Throw in the fact you’re working with living plants and the process becomes a logistical nightmare.

In the fall, Canopy ran into reams of red tape when shipping plants from Canada to a state-run lab in Victoria state, Australia. It took months to prepare and stabilize the plants in Canada before getting the Canadian Food Inspection Agency to examine and certify each individual plant, Sinclair said.

Once the plants arrived in Australia, they were quarantined for another three months in a federal facility.

But despite all these potential issues and the pummelling weed company stocks took in the past two weeks, there’s still a good chance that the Johnson & Johnson of global cannabis will have a Canadian postal code.

“It’s not a slam dunk by any means,” Canaccord’s Bottomley said. “But if I had to handicap and pick my favourite horses right now, I’d bet on lot of these Canadian names to be large players down the road.”