The Canadian cannabis market has witnessed a lot of buzz and investment in the last three years with the growth of the market premised on two cardinal activities. First the public acceptance of cannabis as a drug with enormous healing potentials for erstwhile challenging to treat ailments and second the Canadian government’s move to full legalization of the drug for both medical and recreational use.
These moves, interchangeably and alone have sparked an interest never seen before in the Canadian cannabis industry. It has attracted significant investments to the industry and has by effect created a new economic sector in Canada.
It’s no longer news that enormous investment potentials exist in the industry and it is these potentials that forms the crux of today’s publication.
Investment Potentials in the Cannabis Market
There are various ways a potential investor can take a plunge into the Canadian cannabis market. The options are varied with each offering a unique proposition for the investor.
The growths of the cannabis industry in Canada has opened up support industries, created jobs and have also opened up new investment opportunities in the new economic sector. An investor looking to make investments in the Canadian cannabis market can choose to invest in core cannabis producer companies; those involved in the cultivation and or distribution of cannabis, cannabis support industries or through cannabis ETFs.
In response to the question of how to invest within the Canadian cannabis market, we have outlined a few positions that should appeal to any investor.
- Cannabis Licensed Producers (LPs): At present, there are 29 publicly traded Canadian cannabis producers. These groups of licensed producers have their stock open for purchase on the Canadian stock market at the prevailing price. FSD Pharma trading as HUGE on the Canadian stock market has great growth potential for any investor.
The company is looking to expand its holding on market share, towing the steps of two of the most prominent LPs on the market by investing in the largest indoor cannabis production facility in Cobourg, Ontario.
Other private licensed producers exist, but investments in these group of producers are often closed and can sometimes require more substantial capital investment than might be needed when investing in a public quoted company.
- Cannabis Support Industry: The cannabis industry cannot stand alone. Although the industry is the catalyst for growth in this new economic sector, there are several other support businesses/industries that it must rely on to continue to survive.
The packaging industry is one of such. There is also the retail cannabis industry, and the agriculture technology industry which includes companies involved in the manufacture of essential equipment used in the growing of cannabis such as the manufacturers of Neoprene clone collars, greenhouse technology and automated sprinkler systems used in hydroponic farms to mention a few.
These industries present an opportunity for investors. You can choose to setup your business in any of the available niches or rather make investments in already existing businesses in the industries.
- Cannabis ETFs: Cannabis ETFs is also another way of how to invest in the Canadian cannabis market.
ETFs are special purpose investment vehicles designed to offer you a wide range of investment options in a particular industry at a low barrier of entry and without the encumbrance of high risk.
You have the opportunity of owning blanket stakes in various cannabis companies through your investment in the cannabis ETF.
Although the risk may be lower here, so also is the rewards.
The Canadian cannabis market offers plenty of opportunities, and in our opinion, FSD Pharma holds a lot of prospects for any investor.