OrganiGram Holdings Inc (OGI)

[john1311]

She sounds intelligent too...

Maybe ask her if she could please give us her opinion on this:



Cannabis in Canada – Klondike goldrush reloaded


http://comcap.media/market-trends/60-cannabis-in-canada-klondike-goldrush-reloaded#.V-v-aTELh_g.twitter


In April 2016, Canada's health minister Jane Philpot announced in front of the UN General Assembly in New York plans of Canadas Prime Minister Justin Trudeau and his Liberal government to legalize cannabis in spring 2017. In June, this public statement was hardened when Canadian Justice Minister Wilson-Raybould proclaimed the launch of a task force to advise the Canadian government on the subject. With the prospect of full legalization of marijuana to adults and thus the opening of the markets aside from medical use (which is already allowed in Canada) for investors, it is time to have a closer look on the situation in Canada.


In our last article we gave an overview of the cannabis industry in general, with a look at the market and big participants, the legal situation in the United States, as well as a brief history of Cannabis and its medical applications aside from recreational use. This article will focus on the market as well as the current legal status in Canada.

Historical and social context

A report of the Canadian Centre for Addiction and Mental Health indicated in 2014 that the country has one of the highest rates of Cannabis use worldwide. The study stated that more than 40% of the Canadian citizens have used cannabis at least once in their lifetime and that about 10% have used it in the year before. And this although cannabis was prohibited and added to the Schedule of the Opium and Narcotic Control Act in 1923.

The (il)legal status of Cannabis stayed like this until the year 2000, when the Ontario Court of Appeal ruled that Canadians had a constitutional right to use cannabis as a medicine. One year later Medical Marijuana Access Regulations (MMAR) admitted legal access to cannabis for medical purpose, this way allowing authorized ill people to grow marijuana or to receive it from authorized producers. In 2014 Marihuana for Medical Purposes Regulations (MMPR) substituted MMAR. It treats marijuana as a narcotic, regulates the MMJ (medical marijuana) industry and consists of three key components: “authorizations to possess dried marihuana; licenses to produce marihuana, which include Personal-Use Production Licenses and Designated-Person Production Licenses; and access to supply of marihuana seeds or dried marihuana” (Health Canada). Today around 30 MMPR licenses are held by approximately 21 licensed producers (LPs), with 1300 applicants being in queue for a license.

According to a survey by Nanos Research, conducted in February 2016, in total 67% of the Canadian population support marijuana legalization. The same study states that 44% of the Canadians would prefer buying marijuana in dedicated dispensaries, pharmacies (43%) or regulated liquor stores (36%). Multiple choice answers were possible.

Legal considerations about fully legalizing cannabis in Canada

Canada signed three international treaties that oppose possession and production of non-medical marijuana: The Single Convention on Narcotic Drugs of 1961, amended by the 1972 Protocol; The Convention on Psychotropic Substances of 1971; and The United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988. All contracts however have clauses implemented that grant the right to withdraw from these UN conventions by written notification to the UN Secretary-General, taking effect one year after the date of notification was received.

Moreover the legal framework has to be adjusted for a complete legalization. Schedule II of the Canadian Controlled Drugs and Substances Act, which implements the UN conventions on a national level, has to be repealed. New penalties for operating outside of the legal system have to be installed. Government Taxation of marijuana has to be established as well.

Investment opportunities

Mackie Research Capital Corporation projected a powerful growth of registered MMJ clients from 38,863 in 2015 to 715,000 in 2020 (+1,740%). They did so based on data provided by Health Canada as well as the US states of Colorado and Oregon, where cannabis is already legalized for both medical and recreational use. They also calculated a rise of the amount of MMJ sold annually to clients from 6,432 kg in 2015 to 124,443 kg in 2020 (+1,835%), a number which correlates to the increase growth of MMJ clients. For dried marijuana sales it was from 6,388 kg in 2015 to 87,110 kg in 2020 (+1,364%). Extracts and oils sales are forecasted to explode a shaking 84506% from 284 L to 239,998 L in 2020. The total market size is projected to rise from C$49 million to C$1,146 million in 2020 (+2,238%). With a complete legalization of cannabis in Canada in 2018, Mackie Research calculated a total market size of C$2,800 million by 2020 (+5,614%), respectively C$ 2,047 million by 2020 (+4,077%) with a more conservative approach, assuming full legislation in 2020.