The results of the 2020 election in the United States touched off a wave of enthusiasm among Canadian cannabis companies looking to cash in on business opportunities south of the border.

With the Democrats retaining their majority in the House of Representatives while picking up control of the Senate and the White House, it appeared to casual observers that full federal legalization could be just around the corner. This is still possible, but it is by no means certain.

Fortunately, there are plenty of opportunities within the legal hemp-derived CBD space for companies looking to expand their presence south of the border.

A recently released Canadian study has found that authorizations to use medical cannabis for chronic pain patients correlated to a reduction in opioid use among those to whom they are prescribed. A report on the research, “Opioid use in medical cannabis authorization for adult patients from 2013 to 2018: Alberta, Canada,” was published earlier this month in the journal BMC Public Health.

Should federal legalization pass in the U.S., sales could boom not only because of broader demand, but because American companies are prepared for this eventuality.

Cannabis industry optimism in the United States is mounting alongside increasing expectations for national legalization.

Skeptics, however, point to the Canadian experience and suggest we temper our enthusiasm. To be sure, years removed from 2018 legalization, most marijuana producers in Canada are still reporting losses.

Cannabis has substantial potential in Canada, but it has been a bumpy ride so far. At first, producers were not prepared with enough supply to meet demand. There was a substantial backlog in orders, and producers were not sure what products or strains would be popular and where.

The Boston Beer Company, best known for brewing Samuel Adams beer, is hoping to make a splash in the cannabis industry.

The Massachusetts-based brewer has announced that it is establishing a Canadian subsidiary focused on the research and development of cannabis beverages.

Paul Weaver, formerly of Canopy Growth Corp. and Molson Coors, will lead the research hub.

More research is needed to determine if a new study exploring how cannabis legalization influences illegal drug markets is correct in finding that prices for weed falls but those for hard drugs rises.

“Our exploratory findings suggest that markets for illegal drugs may not be independent of legal cannabis market regulation,” lead author Angélica Meinhofer, an assistant professor of population health sciences at Weill Cornell Medicine, notes in a statement from the Society for the Study of Addiction.

Canadian Cannabis Industry In May 2021

Are marijuana stocks setting up for a rebound in the market? Last week top cannabis stocks closed on Friday, May 14th showing upward momentum in trading. For more than two months the cannabis sector has been losing market value and trading near price points at the end of 2020. But May could be giving way to a market recovery for the cannabis sector.

After leading Canadian Licensed Producers (LPs) announced quarterly financial results that came in lower than what many broker-dealers expected, several firms have issued new ratings and/or price targets on several LPs.

Several of the price target decreases are substantial and we find the changes to be worth highlighting. We attribute the change in sentiment to companies reporting that it has lowered its cash burn by closing production facilities and by reducing employee headcount. 

Many of the Canadian cannabis companies are focused on expanding into the US cannabis market in 2021. The one remaining obstacle is that if they grow cannabis or own retail stores in Canada, they are prohibited from entering the US market until cannabis is legal at the federal level.

Without federal legalization and safe banking in the US market, however, navigating through the hurdles of the cannabis space is limited and can add many extra costs to a company’s capital structure.

Vancouver-based companies Optimi Health and Numinus Wellness are one step closer to conducting clinical trials for psilocybin after submitting an information package to Health Canada.

With the assistance of the Impact Clinical Trials Accelerator at the University of Calgary, the companies announced they had submitted the application for review and comment. If approved, Numinus plans to develop an all-natural psilocybin capsule for use in Optimi’s human clinical trials.

Last week, marked another milestone of the legal cannabis industry after Jazz Pharmaceuticals (Nasdaq: JAZZ) completed the acquisition of GW Pharmaceuticals plc., a leader in the science, development and commercialization of cannabinoid-based prescription medicines.

Although the acquisition did receive as much attention as the merger between Aphria and Tilray, Inc. (TLRY.TO) (TLRY), we believe the transaction represents an inflection point for the biotech side of the cannabis industry.