The ASX pot stocks looking to get high on Canada’s $3bn market
Health & Biotech
Health & Biotech
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ASX pot stocks with exposure to Canada never really gained from the post-legalisation boom, but things could be different this time around.
Canada’s cannabis industry boomed in 2018 when recreational marijuana was legalised. Unfortunately the market became flooded and 2019 witnessed a correction.
Investors are likely to be more excited about Australian cannabis following the TGA’s announcement of plans to re-classify certain CBD oil and pills so they can be purchased over the counter at pharmacies.
But investors are yet to get excited about Canada despite more moves being made in the country and the market increasing in value.
When marijuana was legalised, it did not include edibles containing cannabis and cannabis concentrates. But these are now legal too.
Deloitte says the Canadian cannabis market is currently worth $C2.7bn ($2.82bn) annually. Nearly one in four Canadians are either consuming or likely to consume cannabis.
Althea (ASX:AGH) boss Joshua Fegan doesn’t believe the second cannabis wave will fizz out like “Cannabis 1.0” did.
Althea has a stake in Canadian cannabis product manufacturer Peak. Yesterday Althea announced Peak had been handed a processing license and could begin operations immediately.
Fegan told Stockhead the first cannabis boom was based on a “basic medical market” and basic adult use products.
“So now those types of producers are looking at companies like Peak,” he said.
“Peak’s probably at the front of the queue, and there’s not many anyway that can take that active cannabis ingredient and process it into a refined finished product for wider audiences more likely to consume beverages and things like that.
“In our categories there’s probably only one or two other drinks available right now in Canada and that’s a big focus for a lot of our customers.
“They’re flying off the shelves. As soon as these products are landing they’re getting sold. There’s certainly a shortage of supply on that front and that’s great news for us.”
MMJ Group (ASX:MMJ) was Australia’s first listed pot stock and has evolved into a cannabis venture investor.
Its investments include stakes in Canadian production companies Embark Inc and Harvest One Cannabis.
Rounding out the list is Cann Global (ASX:CGB), which grows and researches medicinal cannabis and has partnerships in Canada as well as Australia, the US and Israel.