Seven States Say Yes to Marijuana, so Now What’s in it for Canada?

Article by Financial Post


While Donald Trump was winning one of the biggest upsets in American political history, other ballot measures were quietly tallying wins alongside the Donald.

Americans in 7 states have now voted to enact legislation that will, to varying degrees, legitimize marijuana for medical and/or recreational purposes. With a combined market value estimated at US$7.4 billion annually, and an expected growth rate of 28 per cent annually, the U.S. combined market for marijuana is expected to be worth US$21.2 billion by 2020.

The significance of these measures to Canadian marijuana users and growers is substantial. The more states that adopt marijuana usage rules, the closer weed comes to becoming a national export crop for Canadian growers. And that, as much as anything, explains the ongoing surge in marijuana stock prices here.

With the Canadian dollar steady for the last few years at an average 25 per cent discount to the greenback, Canada is well positioned to compete with domestic production in the United States, should that market open up to Canadian imports.

 But alongside the potential for a Canadian export market in marijuana, pressure is now significantly greater on the U.S. Feds to regularize financial transacting on a cross-border basis for funds associated with revenue from marijuana — a situation that has caused many large investors to remain on the sidelines of the whole marijuana mania.

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