For Cannabis Financiers, Focus Moves From Growers To The Supply Chain

Article by Geoff Zochodne, Financial Post

With recreational cannabis now legal in Canada, the next big pot plays that could start emerging for investment banks and other lenders may not have anything to do with actually growing plants. Rather, those opportunities could involve more routine things, such as the packaging or shipping of cannabis.

Ratings agency DBRS Ltd. summed up this opportunity last week in a report on financial institutions and the burgeoning “distribution chain” for cannabis.

“New participants may include wholesale distributors, transportation companies, packaging and marketing companies, retail stores, cafes and cosmetics companies,” DBRS said. “Thus, there will be an increased need for financial services as the distribution chain expands.”

Bank of Montreal, which has been the most marijuana-friendly member of Canada’s Big Five banks, already has an eye on the companies that are popping up to serve the fledgling cannabis industry.

Speaking with reporters at the bank’s investor day last week, the incoming head of BMO’s capital markets unit said the cannabis space is an “evolving market” with a changing “value chain” that could involve logistics, retail and technology.

Read the full article here.

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