Canadian market could produce C$4.8 billion in 2022

A new financial report from ATB Capital Markets shares a value line projection of C$4.8 billion for the Canadian adult-use cannabis market in 2022, according to a report from MJBizDaily.

“While the industry continues to struggle due to fragmentation and price competition, we believe that players with a lean cost structure, a robust capital position, and operational efficiency can successfully navigate this environment,” analyst Frederico Gomes said in the report.

The researchers indicate there is an expectation for the recreational cannabis market to have a compound annual growth rate of over 13 percent up to 2030. The study shows domestic sales could reach C$12.3 billion.

In the report, Gomes notes that the Canadian market has failed to see a stronger trend of consolidation despite the wide breadth of mergers and acquisitions.

Analyst rings bell of caution for cannabis investments

Cantor Fitzgerald analyst Pablo Zuanic issued a note to investors warning against cannabis investments in 2022, a report from BNN Bloomberg says.

Zuanic is concerned about the lack of progress for US cannabis regulations at the federal level.

"With U.S. cannabis stocks (including indexes, ETFs) now trading below pre-Nov. 2020 election levels, we believe the scenario that nothing happens in the U.S. at the federal level regarding marijuana reform is priced in," Zuanic said in his note. "That said, even though we are buyers here, we fear a ‘dead-money’ scenario for US (multi-state operator) stocks is likely in 2022.”

The hope of some form of cannabis policy change at the federal level in the US has become a beacon of sorts for investors, and would indicate a new era for cannabis investments.

For Zuanic, it is hard to see how politicians can come together in 2022 to accomplish something meaningful for the drug industry.