Canadian Cannabis Stock Market and American Investing

Canada has one of the most viable markets for cannabis in the world. In 2001, medical cannabis was legalized, and from October 17, 2018, Canada will legalize the drug for recreational purposes. In doing so, it will become the third country in the world where cannabis is legal, after Uruguay and Georgia.

The cannabis market is rapidly growing, especially in Canada, with major companies such as Aphria, Canopy Growth, MedReleaf, Aurora Cannabis and more. The question arises: Is this a viable business to invest in for Americans? The answer is yes. After Canadian Prime Minister Justin Trudeau announced that the Senate passed the bill to legalize and regulate marijuana, stocks of various cannabis company increased immediately. While Canopy Growth increased 6.4 percent, Aphria spiked 4.2 percent, and MedReleaf went up 3.6 percent.

And even more recently, major player Aurora acquired ICC Labs Inc., which is based in Montevideo, Uruguay for a whopping $290 million. ICC has control on about 70 percent of the marijuana market in Uruguay, the first nation to legalize cannabis use. Because of this acquisition, Aurora’s stock increased 1.1 percent.

In a press release, the Canadian company said that the acquisition will give them an advantage over their competitors worldwide since Uruguay is the only nation in the world where CBD-rich hemp is allowed to be cultivated on a large commercial scale. This, in turn, allows licensed producers in the country to grow the plant with a maximum of 1 percent THC concentration. THC, which stands for tetrahydrocannabinol is the psychoactive compound in cannabis.

Will I have trouble with the law if I invest in Canadian cannabis stock market?

So far, it seems like investing in the Canadian cannabis market seem like a great choice for Americans. However, one questions remains, which is the legality of it all. In the U.S., marijuana laws are much more strict than in Canada, even though recreational use of cannabis is legal in nine states and medical marijuana is legal in 30 states. This is because, under federal law, marijuana is still considered an illegal controlled substance.

However, as of now, the biggest concern is whether the federal government will interfere with regulations in states where cannabis is already legalized. Initially, there were rumors that Attorney General Jeff Sessions may start a federal crackdown on cannabis. Fortunately, this is very unlikely mostly because President Trump is adamant on allowing states to administer their own laws.

Sean Cook