At this time one year ago, cannabis stocks were seated high on the mountain top overlooking nearly all other industries and sectors. The marijuana industry simply couldn't be stopped, with Canada becoming the first industrialized country in the world to legalize recreational pot on Oct. 17, 2018.

But my how the tables have turned.

The Supreme Cannabis Company, Inc. (TSX: FIRE) is readying itself for Canada's "legalization 2.0" by entering into a definitive agreement with the private company Truverra Inc.

The deal is expected to be valued at around CA$20 million ($15.3 million). 

Why It Matters

The acquisition of Truverra gives Supreme further access to the Canadian and international markets through Truverra's Canadian Clinical Cannabinoids Inc. (CCC) subsidiary, the company said in a Wednesday press release. 

This includes CCC's 5,000-square-foot Scarborough, Ontario facility, where Supreme said it plans to produce its extracts, including products like concentrates that will be legal for sale later in the year.

With a population size of 740 million people, Europe’s population dwarfs both Canada and the U.S combined. The sizable growth the cannabis industry has had over the past 12 months can be attributed to six countries that have announced medical cannabis legalization.

So far, over €500.0M has been invested in European cannabis businesses (Prohibition Partners, 2019). It is predicted that Europe over the next five years will be the largest legal cannabis market in the world and could be worth up to €123.0B by 2028. Today we have identified four Canada-listed cannabis stocks with promising operations in the European Union (EU).

One of the new frontiers for cannabis investing may not be the frothy windfall that some companies are expecting, a new report suggests.

The opportunity for cannabidiol – the cannabis compound du jour that’s better known as CBD – in Europe is forecast to grow at a heady clip over the next several years, but the continent is rife with a complex regulatory patchwork that could make the sector difficult to navigate, according to Bethany Gomez, managing director at Brightfield Group, which released a report Tuesday analyzing Europe's legal CBD market. 

"Europe is a very nascent cannabis market," Gomez said in a phone interview with BNN Bloomberg. "It’s just starting to take off but tailwinds are there."

The press has spent a considerable amount of time, focused on cannabis developments in the U.S. and in Canada. 

Canada, for example, just legalized cannabis throughout the country.  Corporate America is quickly waking up to the opportunity, transforming multi-billion-dollar industries.  U.S. states are approving the use of cannabis for recreational or medicinal use.  

However, at the same time, the cannabis story is proving to be just as exciting in Europe.

According to Canaccord Genuity as noted by The Boston Globe, “CBD, has become a ‘trending ingredient’ in a range of consumer goods and is now highly visible in pharmacies and health stores. It estimates the CBD product market in Europe was worth 750 million euros ($857 million) to 1 billion euros in 2018…”

Tilray’s (TLRY) stock made strong gains early Wednesday after the Canadian marijuana giant said its European arm had a very successful cannabis harvest. A statement from the company said Tilray Portugal Unipessoal completed the harvest of medical cannabis at its cultivation site in Portugal. The advanced facility, which has been developed with investments of more than EUR 20 million, also functions as a base for the company’s clinical research programs in Europe.

Tilray is a rare stock that received the top rating from almost all the analysts covering it. The consensus recommendation has been strong buy for quite some time, making the stock one of the most sought after investment options. The average price target is $90.

The prescription of cannabis for medical purposes – without the need for a special permission – was legalized in Germany in March 2017. Since then, a wave of approvals for medical cannabis has swept across Europe, with many countries following in Germany’s footsteps.

A favourite of do-it-yourself stock pickers, Canadian cannabis firms are trying to bolster their institutional investor base by boosting efforts to woo European funds as countries across the region approve marijuana for medical use.

For some time, companies including Canopy Growth Corp., Aurora Cannabis Inc. and Tilray Inc. have been signing export deals with European governments, buying local companies and opening production facilities in the region.

This year, they have also stepped up pitching their businesses to European funds at conferences and road shows, betting their size and first-mover advantage will help replace fickle retail investors with more stable institutions.

In 1950s geopolitics, Cold War politicians predicted that if North and South Vietnam were reunited under a communist government, other nearby nations would likewise become communist, probably by hostile takeover aided or orchestrated by the Soviet Union or China. This was referred to as the Domino Theory.

Historians disagree about the validity of this theory, however, since few of Vietnam’s southeast Asian neighbours “fell”, the theory was modified to include faraway influencers as well, as was the case in Latin American countries. The Domino Theory was used to justify United States involvement in and interference with governments and revolutionaries in Chile, El Salvador, and Nicaragua.

The Ontario election is not the only crucial vote to be decided on June 7. As of this writing, senators are set to hold a vote on cannabis legislation on the same night. If the bill is passed, it will head to the House of Commons for final approval. If it does not pass, we may be headed for a disappointing delay that could stretch into the fall and winter months.