4 sources of noise distracting the cannabis industry
October 17, 2018, marked a historic day in Canada – full federal legalization of adult-use cannabis. It was a momentous step for the cannabis industry in Canada, and a turning point for the global cannabis industry. It marked the emergence of a new global industry, which we believe is a once-in-a-lifetime opportunity – for medical patients, for social activists, for investors, for everyone. But the roll-out was never going to be perfectly smooth, for a few reasons:
The stigma is still very real. Nearly a century of prohibition and continued illegality in most jurisdictions globally means that a stigma around cannabis still exists. This will take time to go away.
The black market persists. Estimates show that the black market continues to capture a significant percentage of cannabis activity across jurisdictions where it is legal. High prices, taxes, and limited access to products have done little to shut out illegal operators.
Fragmentation around legalization in the U.S. creates barriers. The U.S. market remains fragmented and is plagued by legal complexities. We believe this patchwork regulatory system prevents businesses from investing in a market-efficient manner, and legal concerns have caused the capital to remain on the sidelines.
Growing pains are inevitable. As with any new industry, cannabis companies have grappled with rapid growth and, along with that, the scramble for top tier talent. Negative headlines still garner much more attention than positive ones, and there have been plenty of the former.
There is still a lot of noise, but we try not to let it distract us.
We are not investing in the cannabis industry of today – we are investing in the cannabis industry of tomorrow.
To read more about Canopy Rivers’ plans, download our letter to shareholders.