As investor attention continues to shift towards the US marijuana market, experts are debating the potential for Canadian firms to participate below the border.

During a panel at the recent Lift & Co. (TSXV:LIFT,OTCQB:LFCOF) Cannabis Expo in Toronto, a variety of participants discussed the opportunities available for companies and investors when it comes to the exponential growth seen and forecasted for the US marijuana space.


Currently marijuana remains illegal at a federal level in the US, and this is preventing Canadian producers from participating there. However, there are still opportunities available to leaders in Canada.

Greg Engel, CEO of OrganiGram Holdings (NASDAQ:OGI,TSXV:OGI) and a speaker at the panel, said that, while his firm won’t operate in the US, there is a viable way for the company to set up a cannabidiol (CBD) business thanks to the legalization of hemp.

“As we saw at the (US Food and Drug Administration) public hearing … there is still some uncertainty around CBD,” said Engel. “So when you look at the market you have to look at where the opportunity is, not only today but in the future, and our approach is how do we enter through technology.”

Finding the right American companies to partner with or work alongside can also help companies break through to the US market when the time comes for a legal entry.

This is a strategy Jeannette VanderMarel, co-CEO of 48North Cannabis (TSXV:NRTH), said her company is using.

“We (are partnered) with several US companies to bring well-known brands from the US and take their IP, their technology, their scientists and help them replicate those products in our facility using Canadian cannabis,” she explained.

For VanderMarel, brand awareness is a key focus of pre-legalization efforts in the US. She believes developing brand curiosity and loyalty is beneficial and may provide companies with an edge.

Acquiring companies that make devices or equipment that are used in the sector but are not directly related to cannabis is another way to build a profile in the US.

“There are ways to work within the regulations, but you cannot be cannabis-touching anywhere in the US. I respect the laws of every country we live and work in, and it’s really important to not come anywhere touching that line,” VanderMarel said during the panel.

Morgan Paxhia, managing partner and co-founder of San Francisco-based Poseidon Asset Management, said the fractured nature of the US market creates challenges due to the different regulations.

He noted that right now, as various states like Illinois work through their own regulations, the US market is even more opaque than usual, subject to change at any given moment. “Every state looks so different,” said Paxhia. “And when you get into that market it can look so different in just a couple months’ time.”

He explained how California, a market he is especially invested in right now, offers a view of a state with several ongoing and changing sub-markets.

“(The San Francisco, LA and San Diego markets) are all very different, and how they are evolving is all different. It’s so driven by the regulatory framework,” Paxhia said.

Despite interest in the US space from the investment market, Paxhia said Canada still has a lot of opportunities thanks to the depth of capital in the cannabis industry, along with the innovation seen.

“From Canada’s perspective, this could be the hotbed of innovation for delivery,” he told the audience. “Whether it’s medical, transdermal, topical or a tincture, or any other kind of delivery, I think there is just so much opportunity to develop that here because so much infrastructure has been established.”

When the US will legalize cannabis on a federal level is hazy, but what is crystal clear is that the cannabis industry in America — as fragmented as it may be — is offering investors a new growth sector thanks to investment in multi-state operators.

During a panel at the Lift Cannabis Business Conference, a component of the expo, Vivien Azer, managing director for consumer research in the beverages, cannabis and tobacco markets for Cowen (NASDAQ:COWN), said she could see the current US administration moving forward with a cannabis program before the next elections in 2020.

Azer explained that if the numbers for US President Donald Trump dip in the lead up to the next election, he could employ a precise deployment of the STATES Act or some other cannabis legalization program to help get re-elected.

The STATES Act is a proposed bill that would create protections at the federal level for operations made legal by policies at the state level.

In the meantime, investors looking to get into the US market should look for companies that are closely adhering to all regulations, while simultaneously preparing for legalization.

Don’t forget to follow us @INN_Cannabis for real-time updates!

Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

Lexaria Bioscience Corp. (NASDAQ:LEXX)(NASDAQ:LEXXW)(CSE:LXX) (the “Company” or “Lexaria”), a global innovator in drug delivery platforms, is pleased to announce the appointment of Mr. Al Reese, Jr., to its Board of Directors

Mr. Reese has over 40 years experience in public and private businesses including as CFO of a formerly Nasdaq-listed energy company where he arranged finance transactions totaling over $10 billion dollars during his 20-year tenure. Mr. Reese was a Director and Chairman of the Audit Committee of a community bank in Texas for ten years until such time as it was acquired by a larger banking group in 2018.

Keep reading... Show less

Mexico looks to be closer than ever to cannabis reform, with the country releasing its regulation plans to make the drug legal in medical settings.

Meanwhile, despite the financial hardships seen recently in the Canadian cannabis market, CEOs in the country are still receiving top dollar, as per a new study.

Keep reading... Show less

Not for Distribution to United States Newswire Services or for Dissemination in the United States

Cresco Labs (CSE:CL) (OTCQX:CRLBF) (“Cresco” or the “Company”), one of the largest vertically integrated multistate cannabis operators in the United States, announced today the pricing of its previously announced best efforts overnight marketed offering (the “Offering”) of subordinate voting shares (the “Offered Securities”) of the Company at a price of C$16.00 per share for a total gross proceeds of approximately US$125 Million. The issue price represents a 3.3% discount to the last close of the Company’s subordinate voting shares traded on the Canadian Securities Exchange as of January 14, 2021. 100% of the Offering is expected to be purchased by a total of seven new and existing institutional investors, including current shareholder, Wasatch Global Investors.

Keep reading... Show less

Wall Street Reporter, the trusted name in financial news since 1843, has published reports on the latest comments and insights from leaders at: Tilray, Inc. (NASDAQ: TLRY), Icanic Brands (OTC: ICNAF) (CSE: ICAN) Red Light Holland (OTC: TRUFF) (CSE: TRIP) and Aphria, Inc. (NASDAQ: APHA).

Investors are cheering new and expected legislation which is opening new market opportunities for both cannabis and psychedelics globally. Innovation in premium branding, growing technologies, manufacturing, with operational execution are key, in the drive towards profitability. Wall Street Reporter highlights the latest comments from industry thought leaders in cannabis and psychedelics:

Keep reading... Show less

Lexaria Bioscience Corp. (NASDAQ:LEXX)(NASDAQ:LEXXW)(CSE:LXX) (the “Company”) today announced the closing of its previously announced underwritten public offering (the “Offering”) of 1,828,571 units, each unit consisting of one share of common stock and one warrant to purchase one share of common stock at a public offering price of $5.25 per unit (all prices in US$). The warrants have an exercise price of $6.58 per share, are immediately exercisable and will expire five years following the date of issuance. In connection with the Offering, the underwriter exercised in full its option to purchase an additional 274,285 shares of common stock and additional warrants to purchase 274,285 shares of common stock. The gross proceeds from the Offering were approximately $11.04 million, before deducting underwriting discounts and estimated offering expenses. No securities were offered or sold in Canada, including through the CSE or any other trading market in Canada

H.C. Wainwright & Co. (“Wainwright”) acted as the sole book-running manager for the Offering and is a non-related party to the Company.

Keep reading... Show less