Global spending for recreational pot will reach US$16.9 billion in 2019, a new study says.

The study, done collaboratively by the Arcview Group and BDS Analytics, indicates that in 2018 adult-use cannabis sales racked in US$12.2 billion. The study projects a jump of 38 percent in spending this year.


Findings of the research were made public by the Arcview Group on Tuesday (January 15).

 

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Troy Dayton, CEO of the Arcview Group, called 2018 “a year of historic importance” for cannabis, crediting the entry of established firms from industries such as alcohol and tobacco, along with the legalization of hemp and its derivatives thanks to a new US$867-billion farm bill.

Beyond 2019, the Arcview Group is calling for recreational cannabis sales to hit US$31.3 billion in 2022.

That pace of growth would amount to a 26.7-percent compound annual growth rate over a five-year timeframe starting in 2017, when sales reached US$9.5 billion.

Multi-state operators in the US aid sector growth

According to the study, multi-state operators of cannabis assets in the US boomed in 2018, with five of these companies reaching valuations of over US$100 million.

The report calls this activity a “gold-rush” for these operators, and indicates that those companies reached a combined market capitalization of US$5.5 billion in 2018.

Meanwhile, in Canada five licensed producers (LPs) had reached a combined value of nearly US$20 billion by the end of the year.

Due to the federal illegality of cannabis in the US, companies looking to raise capital and pursue opportunities in legal marijuana states must do so on the Canadian Securities Exchange (CSE).

As cannabis stocks flock to the CSE, the exchange is seeing interest in these stocks raise. According to a report from The Globe and Mail, the CSE attracted C$2.73 billion from the rapidly expanding cannabis sector in the US in 2018. That amount represents over half of the investment seen on the whole exchange throughout the year.

“According to S&P Global Intelligence, there were 32 CSE companies with a market capitalization of at least [C]$100-million as of [January 11]; 31 of those, including the 17 biggest, were in the cannabis business,” the report indicates.

Hemp play raising in value

Since the passing of the farm bill, several Canadian cannabis companies have disclosed plans to pursue markets in the US with hemp products, with Canopy Growth (NYSE:CGC,TSX:WEED) among the entrants.

The Canadian LP obtained a production license in the state of New York this week and officialized its intentions to deploy between US$100 and US$150 million in the state to produce these products.

Research firm Brightfield Group projects the passing of the bill will set the industry for hemp and its derivatives on the way to making over US$20 billion in sales by 2022.

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

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

 

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BevCanna Enterprises (CSE:BEV,OTCQQ:BVNNF,FWB:7BC) CEO Marcello Leone shared how the company is scaling up its products to forge partnerships and explore opportunities across Canada, the US and Western Europe. 

“Getting your standard processing license and being fully compliant at a federal level is critical in Canada, and we were successful in getting that done. Now we’re getting ready to launch our Keef line of beverages within the next 45 days,” Leone said. 

As a young company, Leone said BevCanna has only started, but it took a four-pronged approach to make sure that it is a revenue-generating company prepared for the opening of many jurisdictions for CBD-based products.

“We are blessed that we have a beautiful infrastructure of our own, a state-of-the-art bottling facility with a capacity of almost 200 million bottles per annum and a strong balance sheet of $55 million. We are in a strong position to scale and grow this company.”

BevCanna has received a Standard Processing License from Health Canada and is now fully authorized to begin production at its full-service, high-capacity beverage manufacturing facility. The company will begin production of its white-label products, number one US cannabis beverage brand Keef and its in-house beverages through licensed Canadian retailers, positioning the company to fully capitalize on the burgeoning Canadian cannabis-infused beverage sector.

Watch the full interview with CEO Marcello Leone above.

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