Almost a year ago, Canadian authorities legalized marijuana. What have they achieved with this, and why, despite the business hopes, is legal cannabis production not growing as fast as expected and why are Canadian companies like GreenStar Biosciences Corp. (CSE: GSTR) looking to the USA for profit?
Unlike coffee shops in the Netherlands, where you can sample cannabis legally, here you can only buy hemp, but not use it on the spot. From 400 to 700 people of all ages visit Oliver Coppolino’s hemp shop every day. It’s one of 50 in Ontario. “The demand for cannabis products is gigantic, says Coppolino DW. Suppliers don’t have time to deliver. Top products are sold very quickly.”
Canadian business is delighted to legalize cannabis trade
The medical use of cannabis herb became legal in Canada in 2001. And since October 2018, Canada has become the first major country to legalize the use of cannabis herb. Under the new law, adults will be able to purchase marijuana for personal use from authorized retailers and carry around 30 g in public places.
Even before legalization, Canada was one of the countries with the highest per capita consumption of cannabis herb. According to various estimates, the annual black market turnover in this area was 4 billion euros. It is clear that the transformation of cannabis trade into a legal business has caused a cheerful mood among businessmen involved.
GreenStar Biosciences Corp. (CSE: GSTR) is a company that has a management team experienced in Canadian cannabis market. This is a company that helps other smaller companies succeed while utilizing their experience. Despite their knowledge of the Canadian market the GreenStar team has elected to set their sights on conquering the United States.
GreenStar already successfully started its expansion to the US. The company broadens a partnership with their tenant company Cowlitz County Cannabis Cultivation Inc. in Washington state. Cowlitz offers cannabis products at low prices but of high quality. It currently represents one of the top cannabis companies in Washington State. GreenStar plans to replicate this success in other states over the coming years.
Legal marijuana in Canada will soon replace the black market
A number of companies started preparing to work in this field even before the free sale of cannabis was allowed – with great risk for themselves, as it was not known for a long time whether legalization would take place. It was made by one of his election promises the current Prime Minister Justin Trudeau. He argued that this was the best way to combat the illegal sale of marijuana and its use among young people.
Despite the strong demand for products, the market for cannabis production and sales is not developing as fast as planned. In order to get money from investors, the companies promised the moon and the stars, but in fact, it will take at least three more years before the legal production of marijuana will meet the demand, says Mark Rendell.
Legalization was the result of a complex compromise of many political forces. This is striking when one looks at the legal framework regulating this sphere. All legal producers and suppliers must obtain a federal license. It regulates the distribution of marijuana and determines the age at which consumers can buy it, in each region of the country independently.
Analysts from the Analysehaus Arcview Group center share the same opinion. According to them, the legal marijuana market will reach a volume of 4 billion euros by 2024. So far, according to Canadian experts, it has won only 20 percent of the black market.