Canada’s position in the global market and the maturation of investors were topics in focus at the 2019 edition of the Lift & Co. (TSXV:LIFT) Cannabis Business Conference (LCBC) in Vancouver.
Thursday (January 9) marked the kickoff of this year’s expo, and as at previous shows the first day was reserved for the LCBC, with the doors open to experts and leaders within the industry.
The event began with a briefing and recap on the current state of the overall cannabis market from Nick Pateras, vice president of of strategy at Lift. He told the audience Lift projects that the current shortage of legal cannabis product will balance out in 2020.
The executive also revealed that consumers are not fully attaching to existing brands from Canadian licensed producers (LPs). Pateras said a recent survey shows 64 percent of consumers named a strain rather than a brand or company when asked about legal products.
Read on below to find out more about the event and which conversations investors need to know about.
Investment panel highlights — TSXV maintains stance on companies with US assets
As part of a finance and investment panel later in the day, Brady Fletcher, managing director and head of the TSX Venture Exchange (TSXV), clarified that the exchange doesn’t plan to change its policy of blocking cannabis companies with assets in the US from listing.
“That regime that we are operating in, and the integrity that those international pools of capital trust us to maintain, does require that the businesses have a legal business in all jurisdictions that they operate in,” Fletcher told the audience.
He added that the exchange’s operators can’t change policy based on sentiment, and as it stands the federal illegality of cannabis in the US overrules what different states in the country have done.
This decision has caused these companies to flock to the Canadian Securities Exchange (CSE), a smaller listing house in Canada that has seen exponential growth thanks to the marijuana business.
Fletcher said cannabis listings represent nearly C$40 billion of the total TMX Group (TSX:X) exchanges, with 45 issuers listed.
Penny Green, president and CEO of The Yield Growth (CSE:BOSS), said one of the most immediate themes she has noticed within the cannabis space recently is how willing and excited American investors are for companies in Canada.
When asked what type of investors, she said mostly retail investors looking for gains with companies at the venture stage.
The panelists agreed that cannabis investors are maturing and are beginning to ask more complex questions about their investments. They see financial statements in 2019 as crucial for the market.
What’s next for Canada, and what has been learned from a start to rocky legalization
Moderated by Rosy Mondin, CEO of Quadron Cannatech (CSE:QCC), one of the day’s panels evaluated how far the Canadian market has come and what is on the horizon for the players in the space.
Peter Aceto, CEO of CannTrust Holdings (TSX:TRST), indicated that he expects 2019 to bring an added level of legitimacy to the industry, and more acceptance of cannabis as an effective medicine, alongside any new innovations with the plant.
Answering about themes in the public market @PeterAceto from $TRST says 2019 will be marked by investors taking a decisive look at companies and really evaluating accomplishments and execution instead of hype and promises #lcbc #cannabis #investing
— Bryan Mc Govern (@McGbryan) January 10, 2019
The new leader of CannTrust said that after multiple regular discussions with financial people, the common theme for 2019 is that investors will not settle for promises and instead will make sure they have steady investments.
“2019 is the year where people who are thinking about investing, or are investing, are going to be looking to see how these companies are executing on their promises, where the discipline and the trust related to what you say vs. what you do, delivering on financial results and responsible capital allocation, is going to be at a premium,” Aceto said.
Adam Greenblatt, lead of business development in BC with Canopy Growth (NYSE:CGC,TSX:WEED), said he expects a variety of new products to be introduced as real competition begins amongst LPs.
Brad Goble, director of regulated industries with Shopify (NASDAQ:SHOP), said Canada needs to be able to demonstrate to the world stage that the legal cannabis market will truly be able to disrupt illicit sales. Shopify offers online solutions for cannabis e-commerce.
The audience of cannabis enthusiasts was also treated to a panel featuring Joanne Garrah, director of licensing and security for the Cannabis Legalization and Regulation Branch of Health Canada.
After a quick discussion between the panelists, the question-and-answer period was dominated by queries to Garrah. One question came from Dr. Shane Morris, senior vice president of product development and regulatory affairs at Aurora Cannabis (NYSE:ACB,TSX:ACB).
Garrah explained that Health Canada is attempting to scale up and respond as quickly as possible to all the roadblocks legalization has brought about.
“Where I’m seeing pressure points in the program that will inform future changes are that there are many applicants in the queue. People want reasonable access to the market and have been waiting for a long time.” -Joanne Garrah of @GovCanHealth #LCBC
— Lift & Co. (@liftandco) January 10, 2019
The fight for leadership continues — Canada holds it together, but will it last?
Despite multiple calls for cheers and applause any time a panelist spoke on Canada’s leadership status in the global cannabis marketplace, Peter Guo, a partner and enterprise risk services leader for BC with accounting firm MNP LLP, challenged the audience to recognize that US market leaders are coming.
During a talk on the approach of 48North Cannabis (TSXV:NRTH), a second-generation marijuana brand firm seeking to provide products for women, Kristen Gauthier, chief marketing officer for the company, explained how in the cannabis business coming in second place isn’t the worst thing.
She added that extra time allows for players in similar positions to 48North to learn from growing pains and adapt to the existing market.
Don’t forget to follow us @INN_Cannabis for real-time news updates from the show floor at the Lift & Co. Expo in Vancouver.
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Yield Growth is a client of the Investing News Network. This article is not paid-for content.