The new Cannabis National Working Group is forming to forster Canadian cannabis position in the world, and businesses such as GreenStar Biosciences Corp. (CSE: GSTR)
Greg Engel, General Director of Organigram (OGI), fears competition from the United States. Engel is at the forefront of one of the largest cannabis companies in Canada. He hopes that the largest business association in the country will help the weed industry to stay ahead of the United States.
Canada was the first G7 country to legalise the cultivation, sale and use of medicinal and recreational weeds, thus gaining a huge leadership and monopoly position in the world. Soon after that, there were several states in America. Engel hopes that the new Cannabis National Working Group will push Ottawa to maintain its leading position. “Canada is uniquely positioned for leadership. We do things on a scale and scope that no one else does.”
Economic potential
According to the Canadian Chamber of Commerce, a new working group is calling for government policy to help the industry realise its full economic potential. The organisation structure includes one of the founding members together with major cannabis producers such as Canopy Growth Corp (WEED.TO) and HEXO Corp. (HEXO.TO). Parties such as Deloitte Canada and Detons Canada LLP are also part of the group.
The interest of investors enabled Canadian companies to strengthen their international position and build facilities for large-scale cultivation. Meanwhile, U.S. federal law restricts the reach of cannabis companies and forces producers to operate at street level.
The American cannabis market
The growing number of states that legalize cannabis and envisage reforms at the federal level means that investors are increasingly focusing on the US. Moreover, Engel said that it is difficult to predict how Washington’s position on cannabis will change.
“What I really see as a threat to Canadian industry is a change in the US from the perspective of the regulatory framework,” says Engel. “We have the opportunity to take advantage of the position that we still have in the short term.”
Some Canadian cannabis companies have already entered the US market, such as an investment company GreenStar Biosciences Corp. (CSE: GSTR). GreenStar is building a diverse portfolio of local cannabis competitors with the highest growth potential in North America. Their partner company Cowlitz is a Washington State-based producer and distributor of cannabis products that delivers high quality marijuana at competitive prices. The company grew significantly with GreenStar’s support. At the end of 2018, the company recorded an impressive $14.6 million revenue after only five years of operations. The company manages a steady $4 million quarterly revenue thanks to high demand on the market and a guaranteed supply.
Legalization and policy
Recently, Illinois legalized recreational use of cannabis, making it the eleventh state to do this in the US. This is still under consideration in many states but there is a good chance that more of them will join. However, cannabis remains illegal at the federal level. It is classified as a substance with no medical value and a high potential for abuse.
Engel said that the new National Cannabis working group is setting priorities. He hopes that within the financial, legal, construction and transport sectors, the group will finally give guidance on policies that advance the interests of Canadian cannabis worldwide.
“The most important aspect is that public policy and decision-making in Canada are really taken as a starting point. However, I believe that in many ways the Chamber of Commerce works closely with the management and is internationally active.”
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