Making the pot sweeter

News that Coca-Cola is looking at getting into the cannabis drinks market has caused a buzz in the financial world. What it emphasised was just how mainstream attitudes to marijuana have become in the North American business world. As is often the case, a dose of corporate capitalism has proved the catalyst needed to drive social change.

In fact what really blew my mind (man) was that the company it was dealing with — Canada’s Aurora Corp — is worth NZ$12 billion.

And it is just the third-biggest Canadian cannabis company.

The second-largest, Canopy Corp, has a market value of NZ$17b.

Corporate cannabis — or pot stocks as they’ve been dubbed — have become big business fast.

In the past week another Canadian pot stock, Tilray, blazed its way to new highs after it was awarded a limited export licence for US medicinal trials.

It surged 94 per cent in one trading session before mellowing out to a market value of around NZ$20b.

All three companies are now bigger than anything on the New Zealand stock exchange — our largest are A2 Milk and F&P Healthcare (both valued around NZ$9b).

But unlike the hype about cryptocurrencies, or most tech start-ups, the cannabis trade is already a highly profitable business.

Economists at TorontoDominion Bank have estimated legalisation will boost Canadian GDP by about NZ$10b — although they note that some of this is activity already going on, that will simply be formally recorded once it becomes legal.

Canada is not alone. Pot is increasingly being legalised or decriminalised around the world. Mexico and most South America and numerous US states — including California — have decriminalised or legalised.

This surge of corporate cannabis activity serves to highlight just how far off the pace New Zealand is on this — both as a social issue and as a business opportunity.

That’s a shame for country that prides itself both in leadership on progressive social change and horticultural excellence.

We’ll need to get over our 20th century moral hang-ups because, globally, legalisation is happening with or without us.

The disadvantage of waiting too long is that a multibillion-dollar economic opportunity may go begging.