There’s a bigger buzz about the marijuana industry than ever before. Thanks to a recent vote in Oklahoma, 30 states now have laws in place that broadly allow the legal use of medical marijuana. Nine states plus the District of Columbia have legalized recreational marijuana, with Michigan potentially joining their ranks pending a vote on the issue in November.
That’s just looking at home in the United States; Canada’s recreational marijuana market opens nationwide in October. Germany, the largest economy in Europe, has an expanding medical cannabis market. Other countries across the world are relaxing laws to allow the legal use of medical marijuana.
Keith Speights: The short answer to this question is “absolutely.” The longer answer is that how viable the marijuana business is depends on the country. The marijuana industry is definitely viable in Canada and Germany, two developed countries that have legalized cannabis at the national level. There are marijuana growers operating quite profitably in these markets, notably including one of the larger players, Aphria (NASDAQOTH:APHQF).
As for the market investors probably care about the most — the U.S. — the answer is still “yes.” There are certainly serious constraints for the U.S. marijuana industry, particularly with onerous federal regulations about how banks can interact with marijuana businesses. However, there’s also a lot of money being made. Last year, $8.5 billion was spent on legal cannabis in the U.S., according to ArcView Market Research and BDS Analytics. That’s more than Americans spent on ice cream in 2017.
Sean Williams: Today, medical cannabis is legal in more than two dozen markets worldwide — yet it remains a wholly illicit drug in what would be the most lucrative market in the world, the United States. In countries like Canada, and in states such as Colorado, Washington, and Oregon, the business model does appear to be viable on paper, but it’s clearly not without some serious drawbacks that investors need to be aware of.