LEGALIZATION 2.0 COVERAGE

One year after Canada completed the federal legalization of recreational marijuana, the nation will now open its market to novelty products infused with the drug. This includes edibles such as cookies and gummies, as well as cannabis beverages, which will be introduced to the market in an attempt by legal producers to tap into a replacement product for alcohol.

As such, on the eve of the launch of this second phase of the marijuana market in Canada, the Investing News Network brings investors a collection of stories and interviews on the impact this opening will have.


Canada’s nascent legal marijuana industry has had the last year to grow based on a small sample of products, but on Thursday (October 17) legislation ushered in a new wave of consumption: cannabis-infused edible products.

Stocks across the sector saw gains on Thursday as legalization came into effect.

Many licensed producers, including Canopy Growth (NYSE:CGC,TSX:WEED), Aphria (NYSE:APHA,TSX:APHA), Aurora Cannabis (TSX:ACB) and Organigram Holdings (TSXV:OGI,OTCQX:OGRMF), saw value increases as the trading day began.

A collection of Canadian exchange-traded funds (ETFs) also saw gains as the day kicked off, including the Evolve Marijuana ETF (TSX:SEED), which rose on Thursday to C$15 shortly after the start of trading.

The Horizons Marijuana Life Science Index ETF (TSX:HMMJ), which acts as an index for a pool of cannabis stocks, jumped 3 percent from a close on Wednesday of C$10.62 to C$10.94 early in the trading day.

It’s a different story from last year, when companies in the sector took a hit on the day of initial cannabis legalization in Canada in a generally accepted selloff seen across the board.

Up until now, recreational users of cannabis in Canada only had access to dried flower and oils, but retailers will soon be able to stock their shelves with marijuana derivatives in foods, beverages and topicals, giving consumers options other than inhalation.

While the legislation is now in effect, sales won’t begin until mid-December, according to Health Canada. The federal regulator will be subjecting new products to a 60 day review period.

The beginning of the year saw sky-high valuations for cannabis companies, but the industry was put through its paces over a summer marked with volatility. It suffered from an array of setbacks, including high investor expectations for revenue generation and a lack of retail locations in the country.

However, industry experts and analysts have said edibles could prove to be a boon for the space.

A study from Lift & Co. (TSXV:LIFT,OTCQB:LFCOF) and EY estimates that 1.5 million new customers could be introduced into the market now that alternatives to smokeable products will be available.

A report from business research company Deloitte furthered excitement about the space after the firm projected this new legalization could create a C$2.7 billion industry in Canada.

Performance of Canadian extraction companies

At the core of these new products will be cannabis extracts, and companies have been amping up their extraction capabilities to prepare for the next phase of Canada’s cannabis legalization.

Extraction giant MediPharm Labs (TSX:LABS,OTCQX:MEDIF) jumped in value early on in the trading day on Thursday, opening at C$4.19 and rising 2.6 percent to C$4.30 by 10:20 a.m. EDT.

Quebec-based Neptune Wellness Solutions (NASDAQ:NEPT,TSX:NEPT) also saw some gains in Toronto, rising from a closing price on Wednesday of C$4.59 to C$4.75 at open on Thursday.

Another successful extraction firm was Valens GroWorks (TSXV:VGW,OTCQX:VGWCF), which opened at C$3.21 before reaching C$3.34 by 11:50 a.m. EDT.

Investor takeaway

Since products won’t be available until the end of the year, it’s still not clear how edibles and other novel cannabis offerings will impact the overall financials of the industry.

Cannabis companies will have trouble in Quebec, which has banned the sale of cannabis-infused foods that would appeal to children, a decision that’s been criticized by players in the legal industry.

Elliot Johnson, chief operating officer at Evolve Funds Group, told the Investing News Network that investors will be taking note of this new development.

“The legalization of edibles in Canada will draw some more attention to this sector. Obviously the sales results will not be actually known until 2020, but speculation may drive valuations higher,” he said.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: MediPharm Labs and Valens GroWorks are clients of the Investing News Network. This article is not paid-for content. 

The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

As investors continue to prioritize cannabis opportunities in the US, market watchers expect mergers and acquisitions (M&A) to play a role in the future for Canadian companies.

A consolidation trend has been expected in the Canadian cannabis space for some time now based on the size of the market compared to the number of operations in the country.

Keep reading... Show less

The product will include polyphenols known to have significant health benefits.

BioHarvest Sciences Inc. (CSE: BHSC) (“BioHarvest” or the “Company”) has reached an important milestone in its development program of additional Nutraceuticals. The olive-based Nutraceutical product scheduled for market availability in the second half of 2022 will contain the following unique matrix of polyphenols: hydroxytyrosol, trosol, and verbascoside. These compounds are the major polyphenols in naturally grown olives and are responsible for the high antioxidant activity of olives and olive oil. Importantly, the BioHarvest olive-based Nutraceutical product will provide all the benefits of olives and olive oil with a low calorie count per serving.

Keep reading... Show less

Cresco Labs (CSE:CL) (OTCQX:CRLBF) (“Cresco” or the “Company”), one of the largest vertically integrated multistate cannabis operators in the United States, announced today that it will report financial results for the fourth quarter and full year ended December 31 st , 2020 on Thursday March 25 th , 2021 before the market opens.

The Company will host a conference call and webcast to discuss its financial results and provide investors with key business highlights on Thursday March 25 th , 2021 at 8:30am Eastern Time (7:30am Central Time).

Keep reading... Show less

 Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) (“Canopy Growth” or “the Corporation”) announced today that EVP & CFO Mike Lee will be participating in a fireside chat at the BofA Securities Virtual Consumer & Retail Technology Conference on Thursday, March 11, 2021 at 9:30am ET .

Keep reading... Show less

Hill Street Beverage Company Inc. (TSXV: BEER) (“Hill Street” or the “Company”). The Company announces that further to its press release dated March 2, 2021, it has obtained TSX Venture Exchange approval to extend the closing date of its previously announced private placement of units (“Units”) until April 7, 2021. Each Unit is comprised of one (1) common share and one (1) warrant, exercisable for one common share at price of $0.11 per share, for a period of three (3) years from the date of Closing. The Company applied to extend the date of closing to allow a greater number of interested investors to participate.

For more information regarding the Company or the offering, please contact ir@hillstreetbevco.com, or

Keep reading... Show less