NOTE: this article appeared as a column in the Michigan Cannabis Industries Report’s November 2018 issue.
Cash-In with Canadian & Michigan Cannabis:
The Time is Now
Canada is a country with a rich heritage, and is home to many “firsts.” The zipper and the heart pacemaker were invented in Canada. Canadian’s introduced the world to the great sport of Hockey. Canada trained the worlds first female jet-fighter pilots. And, recently, Canada has become another “first.”
On Wednesday, October 17th, 2018 Canada has made another significant mark in the world. Canada is the first of the major developed countries to legalize the recreational and medicinal use of marijuana. In this article we will discuss what impact this has on the overall marijuana industry in both the country of Canada and the state of Michigan. We will identify who benefits from this economically and how can savvy stock market investors capitalize on this momentum.
The new Canadian law specifically allows individuals to publicly possess up to 30 grams of cannabis, which is about 1 ounce. In addition, they can grow up to four plants per residence. Many Michiganders have expressed concern for how the new Canadian law will affect the Southeastern Michigan region economically, considering the city of Detroit borders the city of Windsor, Ontario. According to Wikipedia, “The Detroit–Windsor area acts as a critical commercial link straddling the Canada–United States border and has a total population of about 5,700,000. It is North America’s largest cross-border conurbation.”
As many know, Michigan has an extremely important vote for Proposal 1 coming up on Tuesday, November 6th, 2018. According to John Wisely, Detroit Free Press, “The proposed Michigan (marijuana) law would be more permissive (than Canada’s), allowing possession of up to 2.5 ounces and up to 12 plants per household.” More relaxed laws, reduces the amount of criminal cases, and allows more money to flow throughout the economy. Not only can people earn money from being a cannabis grower, processor, or seller. There is money to be made in everything from hydroponics to cultivation products to professional training & education, consultancies, marketing & media companies, and a host of new technologies. Legalizing cannabis has already proven to be financially beneficial to the provinces in Canada, as well as the federal government. According to CTV News, “Cannabis sales are
taxed at $1 per gram or 10 per cent of a product price, whichever is higher. Provincial governments receive 75 per cent of the tax with 25 per cent going to the federal government. The federal portion is capped at $100 million per year.” Legal cannabis sales grew into the millions of dollars after the first couple of days alone.
According to Global News Canada, “Nearly 10,000 cannabis sales were made in British Columbia on Wednesday, generating $41,000 in revenue. Alberta reported $730,000 in sales. Nova Scotia had $660.000 in sales. Quebec had $220,500 in cannabis sales. Prince Edward Island said it made a total of $152,408 in sales after tax on Wednesday. New Brunswick chose not to release it’s first day sales numbers. Saskatchewan does not track cannabis sales.”
It is evident that the marijuana industry now has another historical catalyst which can help justify the speculation in both the Canadian cannabis industry as well as Canadian-based cannabis stocks. Over the last few month, cannabis stocks have seen significant gains. Some, have experienced meteoric gains.
Here are a few of the major players in the sector, that you should consider adding to your watch list according to Marketwatch.com, who generate legitimate revenues and have tangible assets that can be leveraged for expansion:
1. Aphria (APH): Aphria is positioning itself as a low-cost pot producer.
2. Aurora (ACBFF): Aurora Cannabis investments may be more valuable than its pot.
3. Cronos (CRON): Meet Cronos, the Heinz Ketchup of weed.
4. Canopy (CGC): Canopy Growth is the cannabis business’s $4 billion gorilla.
5. Tilray (TLRY): Vancouver Island–based Tilray has global ambitions.
It is important to keep in mind that any investment can involve risk. No returns are guaranteed. And, the cannabis space has been quite risky over the years. It is critical that you do your homework and necessary due diligence prior to speculating with your money.
— Ken “Blanks” Harrell, Stock Market Strategist
Bullish Institute of Financial Literacy, LLC
BullishInstitute.com – 313.744.3489