Last year, Canada legalized the recreational use for cannabis, but it doesn’t mean that It’s all positive use. Because of slow regulatory and licensing provincial retails and cannabis-related businesses, it has its drawbacks. Many cannabis experts are still hopeful for a positive pace in the cannabis industry in Canada this 2020.
In October 2018, Canada legalized recreational cannabis and people around the world watched the progress. As there were setbacks in 2019 and many problems arisen, the cannabis market in Canada will be challenged in 2020.
Canada Market in 2019
2019 was the year of reset for the investors of the cannabis sector, specifically for investors of stocks in the cannabis market in Canada. However, 2020 will be a great year for the U.S. consider to decriminalize cannabis laws at the federal level.
With Canada’s slow retail rollout and provincial licensing, it was hard to achieve optimistic forecasts for the companies in the canna sector.
Even in one of Canada’s most populated province don’t have any operating retailers until April. Today, Ontario conducted a second lottery to possibly increase the retail stores from 25 to 50.
On the other hand, Alberta, which its population pales on comparison with Ontario has more than 300 retailers up and running.
The legal cannabis industry in Canada is new. So, government matters aside, building a new industry based on cannabis will be full of complications and struggles.
Stocks in the cannabis market skyrocketed last January 2019. But in CannTrust in July got themselves involved in regulatory mischief and the cannabis market took a major hit. They defied the Health Canada’s regulations to not produce any cannabis in an unlicensed grow rooms.
This regulatory scandal pulled down the whole cannabis. Curaleaf, which is also a player in the cannabis market received a warning letter for the reason for promoting CBD-based products unapproved by the FDA.
2019 was the year that most companies changed leadership. CannTrust’s CEO was fired. Bruce Linton, the CEO of Canopy Growth was also terminated. Micheal Monahan resigned, the CEO of HEXO at that time.
This means that changes in the executive level can greatly affect each company’s stock in the cannabis market.
Aphria (APHA0 with Irwin Simon’s leadership seems to be in a more favorable position. It is reported that the company has positive profitability in the current quarter.
Furthermore, demand and supply issues have also influenced the cannabis companies. It also seems that health issues caused by vaping are still on the news
The cannabis market in Canada has been full of difficulties and still hasn’t addressed properly yet. It is only been one year and the cannabis market in Canada still has a long way to go.
On the other hand, there is a lot to look forward to in 2020 as the effort to legalize the cannabis market federally in the U.S is in a good direction.
Despite legalizing recreational cannabis one year ago, Canada is still experiencing setbacks from the growing black market sales.
Firstly, Canada’s regulation process progress very slowly and arduously. This causes delays in legal stores and retails opening.
It’s no wonder why the majority of cannabis consumers are still making transactions in the illegal cannabis market. Furthermore, the cannabis black market offers more varieties of strains and edibles at a lower price.
In the hopes of tackling the illegal market, Canada legalized edibles.
What companies took a hit in 2019?
Last year, CannTrust took the hardest hit. YTD (Year-To-Date) of CannTrust lost about 82.1%.
Canopy Growth and Aurora Cannabis have also struggled with low profitability, revenues and lost share value even they were among the top investors of the Canadian cannabis sector.
Because of it, Constellation Brands, Canopy’s largest shareholder resolved to not make any future investment not until it gains its losses.
Canopy’s stock is down 23.1% Year-to-date while Aurora’s stock is down to 52.6%.
Today, there is a revolution around the world transforming the views towards cannabis and this was primarily lead by medical cannabis.
Legalizing medical cannabis is the key for a wider liberalization with the tendency for recreational cannabis to be legalized
Canadian Cannabis Market in 2020
The cannabis sector in Canada is still unstable and expect fluctuations and changes in it anytime.
Cannabis experts expect some positive results in the industry in 2020.
Canada’s Cannabis 2.0 could be the turnaround for the Canadian cannabis-related companies. which, are very confident in their beverage and edibles expansion plans.
but still, their success is highly dependent on the regulatory procedures.
Meanwhile, cannabis legalization is cranking up in many US states.
The US House Committee approved a new cannabis bill in November 2019. If this bill passed by 2020, it will eventually decriminalize cannabis usage in the U.S.
As cannabis is legal for medical use in 33 states and recreational use in 11 states.
In just a few years, cannabis has gone from schedule 1 drugs to a multi-billion-dollar global industry. At least in Canada and other states.
Canadian Cannabis Trends 2020
A Stronger Importance on Accountability and Quality
Cannabis products began with comparatively low-quality cannabis buds or developed a cannabis-infused product that meets the state’s consumer demands.
Most of these products were just as safe and effective products that revolutionize today’s cannabis market.
This year, we will see drastic changes and an increase in quality and accountability.
Cannabis-related products are consistently getting better with cannabis growers aim to grow much more weed quality to outdone their competitor’s products.
Drastic Changes at the Federal Level
Many cannabis consumers don’t feel the effects of federal cannabis regulation on their everyday basis.
Cannabis remains illegal at a federal level but there are now a number of states that legalized cannabis.
Every business that is involved in the cannabis sector pays a large sum amount of tax for everything they do.
Some of this will change ad will affect cannabis consumers in 2020.
The cannabis industry in Canada took a huge hit last 2019, but experts and entrepreneurs, as well as the finance sector, are positive to receive good news this 2020.