What we learned about pot from the Ontario budget

From a baker in Grand Bay to a Fredericton restaurant owner who recently closed his business to get into the industry, entrepreneurs in the province are hoping to get a piece of the edibles pie. But it may not be the easiest road to get their products carried in Cannabis NB stores come October 17 this year. Currently, people are allowed to make edible in their homes for personal use but it’s illegal to sell them.

Can you name one way in which Canadian banks definitively have the edge over their U.S. counterparts? Try involvement and working knowledge with legal weed.

American banks have next to no experience in the legal marijuana sector, while Canadian banks have been scoring points for servicing some of the country’s best producers of the sticky green stuff over the past 12-18 months.

Over the next four years, there's arguably no industry that's expected to grow faster and more consistently on a global scale than the legal marijuana industry. Between 2018 and 2022, Arcview Market Research and BDS Analytics have called for a compound annual sales growth rate of 26.6%, leading to $31.3 billion in revenue by 2022.

As Canada’s six-month anniversary of marijuana legalization day approaches, it’s clear that it's been a bit of a rocky road.

Supply shortages have left customers and retailers frustrated across the country. Some provinces have already laid off workers or cut hours at government-run cannabis retailers, while others are still having trouble getting their retail networks off the ground.

A possible positive to take from the past six months is that there has been no indication of serious spikes in criminal activity or public health emergencies due to marijuana being more readily available – but even that could change as time moves on and more data is compiled.

It’s been an interesting year for pot stocks, as we saw a big sell-off happen after legalization in October and then a strong recovery early on in 2019. Below, I’ll look at two stocks that have done very well lately and one that’s struggled that might be an option for investors to buy on the dip.

The marijuana industry is budding into a big business model before our eyes. Gone is the notion that this is an industry that simply sells dried cannabis to casual users. Now, the legal weed industry consists of a number of cannabis alternatives, such as oils, vapes, concentrates, topicals, and even beverages, and it’s targeted at everyone from medical marijuana patients to upscale recreational consumers. This broad reach and ongoing maturation is a big reason Cowen Group expects the global industry to hit $75 billion in annual sales by 2030.

The marijuana industry is absolutely growing by leaps and bounds, and Wall Street has had no choice but to take notice. Since 2016, a majority of pot stocks have seen their valuations soar by a triple- or quadruple-digit percentage, with none racking up the gains quite like Canopy Growth (NYSE:CGC). Today, Canopy Growth is the largest publicly traded pot stock in the world, with a market cap of just shy of $15 billion. This also makes it the only marijuana stock with a true large-cap valuation, albeit Aurora Cannabis is closing in with a market cap of $9 billion.

Aurora Cannabis Inc. (ACB.TO 3.67%) said it is expanding the size of a marijuana production facility currently under construction in Medicine Hat, Alta., by 33 per cent. The Edmonton-based pot producer said in a release Wednesday that it is increasing its high-tech Aurora Sun facility from an original plan of 1.2 million square feet to 1.62 million square feet, as the firm seeks to ramp up production amid growing global demand for medical cannabis.

Aurora said it expects the Medicine Hat facility will produce more than 230,000 kilograms of cannabis per year.

Cannabis stocks gained momentum Wednesday after losses earlier in the week. 

The North American Marijuana Index, which tracks the top cannabis stocks in the US and Canada, was down 1.3% to 299.89. The Horizons Marijuana Life Sciences Index ETF was up 1.6% at C$21.26.

Buds 

WeedMD Inc (CVE:WMD) shares popped on Wednesday after the company announced it had acquired an additional 60 acres of neighbouring land with an aim to expand its outdoor cannabis footprint at its Strathroy, Ontario property. 

Shares were up 2.1% at C$1.95.