As the cannabis industry continues to evolve, so too does the investment landscape. With over a dozen publicly traded cannabis companies now trading, investors have a wide array of companies to choose from. Below are three companies I believe are worth a closer look.
Cannabis is a $7 billion industry that is exploding. The only problem is that many people don’t know the whole truth about the industry. It’s not only growing, but people are now investing in it. And the government is doing everything in its power to stop it.
The cannabis industry is changing. Entrepreneurs are discovering new ways to use this plant in a variety of applications, from beauty products to medicine. But with legalization in some states and a host of new products coming to market, investors need to be aware of the different business models (including financing structures) being employed by companies in this sector.. Read more about what investors look for before investing and let us know what you think.
Andrew Ward is the author of this piece.
After ruling that cannabis usage and possession restrictions were unconstitutional, Mexico’s Supreme Court decriminalized the drug in June 2021, making it the third country to do so. The judgment came after Congress failed to meet numerous deadlines, forcing the court to intervene.
Cannabis reform continues to progress in little steps. A medical bill was passed by legislators in 2017. The market was estimated at $47.3 million the following year by Grandview Market Research, with a roughly 28 percent CAGR through 2025.
Still, there are worries. Since the legalization of medicinal marijuana in 2017, Mexico’s industry has suffered significant setbacks owing to legislative delays. In January 2021, a framework for the medical market was published. Adult-use permits were in limbo as of August for would-be businesses.
Despite the considerable challenges, experts and operators tell Benzinga that the industry is on the verge of becoming a worldwide leader.
As international players enter Mexico’s cannabis market, there are many investment opportunities.
Mexico’s cannabis industry will become a worldwide leader, according to operators.
The country’s topography and environment, according to Janko Ruiz de Chavez, COO and creator of CBD Life, are perfect for growing. He also mentioned the country’s population of nearly 127 million people and its proximity to Latin America as selling factors.
He said that “Mexico’s location enables local and global companies to utilize Mexico as an export center.”
Ruiz de Chavez believes that the country’s laws will continue to change in order to help the domestic sector create new products and services.
CBD Life stated in June that it has entered into a license deal with Clever Leaves Holdings Inc. (NASDAQ: CLVR, CLVRW) to enter the Mexican market.
Goldcann International Inc. is a private company based in the United States. After legalization, CEO Roderick MacDonald thinks Mexico would be the biggest foreign market. He referenced the country’s herbal medicine history, describing it as “a lengthy heritage with different kinds of herbal medications and uses.”
Other major companies are keeping a close eye on the industry.
Jenny Ng, a communications expert for Aurora Cannabis Inc (NASDAQ: ACB), a Canadian-based worldwide brand, said Mexico’s reform efforts are encouraging. At present moment, Aurora does not conduct business in Mexico. According to Ng, the firm is still keeping an eye on the market and its possible effect on North America.
“While there is still much work to be done,” Ng said, “we are cautiously hopeful and curious to see how this will impact the broader North American dynamic.”
Non-citizens may invest directly in the market, thus global investors may discover possibilities. “We see a growing potential in a relatively young cannabis sector,” said Ruiz de Chavez, who added that cannabis funding had been accessible for many years. He also emphasized the country’s strategic position, cheap labor overhead, and low manufacturing expenses, all of which assist reduce transportation costs.
Lawmakers and the black market wreak havoc.
Many of the industry’s pain points, according to sources, are caused by legislative delays combined with the illegal market.
The effect of regulatory uncertainty on investors was emphasized by Catherine Krol, a research analyst at Euromonitor International. She believes that a controlled market would assist to standardize the industry and increase efficiency. However, the supply chain may bear a considerable strain.
“As there is no precedence for this industry, it will likely take a few years to manufacture effectively,” Krol added.
The medical market, according to Krol, also faces challenges, since existing regulations restrict imports and exports. Exports are restricted to cannabis-derived goods, and seeds may only be imported by medicinal firms, according to Krol.
The medicinal sector, according to Jorge Escalona, a cannabis consultant and co-founder of Nabis Group, “requires a clear route for imports and raw materials.”
While reform may result in more clear laws, criminal cartel activities may continue to thrive. “If Congress delays complete regulation of the sector again, the illicit market will prevail,” Escalona said.
Others had similar reservations. According to MacDonald, unregulated market pricing are often low, simple to acquire, and entail little police intervention. He believes that the competitive illegal market would gain from the rising cost of imports, since people will be unable to purchase imported products.
Krol doesn’t know how much, if any, of the illegal market will make the transition to the mainstream. She did point out, however, that northern states like Sinaloa, Chihuahua, and Durango had “generational expertise of cannabis cultivation.”
Krol thinks that the knowledge and closeness to the United States and Canada will be helpful in the long run.
In the past, people thought marijuana was a taboo drug that caused brain damage. That was before medical marijuana was legalized in countries like the US, Canada, and Israel. What most people don’t know is that marijuana is one of the most versatile and profitable commodities in the world. In fact, dozens of countries have legalized marijuana for medicinal use, and it’s estimated that worldwide sales of the drug could reach $50 billion by 2020.. Read more about what do investors look for in a pitch and let us know what you think.
Frequently Asked Questions
What investors look for in entrepreneurs?
Investors look for entrepreneurs who have a clear vision of what they want to do, and are willing to work hard towards achieving their goal.
What investors should know before investing?
There are a lot of risks involved with investing. It is important to know what youre getting into before you invest your money.
How do investors help entrepreneurs?
Investors help entrepreneurs by providing them with capital, which allows them to grow and expand their business.
This article broadly covered the following related topics:
- what investors look for before investing
- what investors look for in financial statements
- what investors look for in a business plan
- what do investors look for in entrepreneurs
- what do investors want in return