Canada legalises marijuana, braces for cannabis gold rush
Survey set to identify potential investment
WHEN Canada legalises recreational marijuana on Wednesday, market watchers predict the birth of a new industry – creating thousands of jobs, investor euphoria and a new tax source for governments.
Hundreds of licensed growers have sprouted in anticipation of t he end of marijuana prohibition, attracting major investment.
In just the past year, the market capitalisation of firms including Canopy Growth and Tilray has increased fivefold, to a total of more than $10 billion on the New York stock market.
And with significant know-how gained since Canada’s legalisation of medical marijuana in 2001, others including Aurora and Aphria are making inroads abroad as more and more foreign markets allow therapeutic cannabis use and research.
Beverage makers and pharmaceutical companies are also partnering in the sector, hoping to develop new products infused with THC or cannabidiol (CBD).
Constellation Brands, the North American distributor of Corona beer and Robert Mondavi wine, recently invested about C$5 billion ($3.8 billion) in Canopy Growth for a 38 per cent stake in the company.
And soft drinks giant Coca-Cola is looking into using CBD, the non-psychoactive molecule in cannabis believed to provide health benefits, as an ingredient in some drinks.
‘Canatourism’
Experts like John-Kurt Pliniussen, a marketing professor at Queen’s University in Kingston, Ontario, are also predicting a bump in tourism worth several billion dollars, citing as examples Amsterdam and a handful of US states where marijuana is legal.
“The same can happen in Canada, because one of the things we have going for us and that no other country in the world has, is the name of our country – it is almost spelled very similar to cannabis,” said Pliniussen.
“And so you could have Canatourism – from a marketing point of view, it lends itself very well.”
In the meantime, an investor frenzy is fuelling mergers and acquisitions, with 48 deals worth a total of C$5.2 billion announced in the first six months of this year alone, according to Price Waterhouse Cooper (PwC).
The consolidation will continue after legalisation, says PwC, as an “expected oversupply takes its toll and forces undercapitalised players into bank- ruptcy” and firms “look to fuel further growth by tapping emerging foreign medical markets.”
There are untold economic spinoffs to be had, for sure.
Tokyo Smoke – a reinvention of the classic coffee shop – promotes cannabis lifestyle, selling pipes, infusers and other marijuana paraphernalia along with shots of espresso (but not cannabis itself ).
The three-year-old company was purchased for C$500 million last month by Canopy Growth and plans to expand nationwide from five locations in Toronto.
“I think Canada will become a world leader in cannabis – it’s exciting and something we can be proud of,” said Tok yo Smoke v ice-president Josh Lyon.
“Legalisation will open the doors to a dynamic, sophisticated industry that will create new jobs, new opportunities for businesses,” echoed Deloitte in a report.
Nearly five million Canadians or 16 per cent of the population consumed 773 tonnes of cannabis in 2017, mostly for recreation, paying an estimated C$ 5.5 billion to buy bud, according to the government stat ist ics agency.
The number of consumers is expected to increase slightly after legalisation, but spending is predicted to remain the same, Statistics Canada said in a recent report. THE Food a nd Ag r icu lt ure Organisation (FAO) has given a $1.3 million grant to Cambodia to conduct an agricultural survey to identif y potential agricultural products that investors can look into.
The Cambodia Inter-Censal Agricultural Survey for next year, supported by USAID and the Bill and Melinda Gates Foundation, was signed yesterday between FAO and the Ministry of Planning to collect agricultural statistics to be used as a guideline for investors.
The year-long inter-censa l programme will be completed at t he end of next year.
FAO representative in Cambodia, Alexandre Huynh, said the Kingdom is the first countr y in t he region to be chosen for this programme.
“Availabilit y and accessibilit y to timely and reliable data a re pivota l for t he development of responsive pol icies a nd a prog ressive ag r ic u ltura l progra mme, It sig nif ic a nt l y c ont r ibute s to t he f unct iona l it y of i nvest ment and market operations in the countr y,” he said.
It will provide a regular f low of a g r i c u l t u r a l s t at i s t i c s , Huynh said, and a llow for a strong basis to improve policy a nd decision-making in t he agricultura l sector.
“This initiative is designed to inform policy makers and f ur t her develop t he sector, i mprove food secu r it y a nd the livelihood of smallholders to reduce povert y,” he said.
T h e f i r s t C a mb o d i a n nationa l agricultura l census sta rted in 2013. It cost more t ha n $ 5.2 mi l l ion a nd was f unded by t he gover nment, AusAid, the Swedish Internationa l Development Agency, FAO and USAID.
The 33-page census findings said 2.2 million out of a possible 2.6 million or 85 per cent of all households were engaged in some form of agriculturalrelated activity, such as growing rice, raising livestock, fishing or extracting rubber.
The senior minister at t he Ministr y of Planning, Chhay Tha n, sa id t he su r vey w i l l work across the countr y in a ra ndomly selected 800-v i llage sa mple to col lec t t he agricultura l stat istics.
T he a g r ic u lt u r a l-r el at e d enterprises and agribusinesses will be included in the data as well, said Than.
“The outcome of the sur vey plays a n i mpor ta nt role i n developi ng Ag ro pol ic y i n order to promote economic grow t h,” he said.