2016 has no doubt been a blossoming year for the cannabis industry, and 2017 is without a doubt going to be another prosperous year for the market.
For instance, the cannabis industry in the US was expected to inch towards $6.7 billion in the US in 2016, and growing to $21.8 billion by 2020. In Canada, the market was estimated to be valued at $4 billion in 2016–with 26 marijuana stocks listed–a vast increase from where it was not too long ago.
With that in mind, the Investing News Network (INN) had the chance to speak with a number of companies in the space to learn more about what impacted the market in 2016 and to give their cannabis outlook for 2017.
Below, Cam Battley, vice president of Aurora Cannabis (TSXV:ACB) and Sebastian de Kloet, corporate development at Beleave (CNSX:BE) share their thoughts on what impacted the commodity in 2016, and what they’re looking forward to in 2017.
Cannabis overview 2016: regulations and significant change
Looking back, de Kloet said the federal government–under the newly-elected prime minister, Justin Trudeau–moving towards legalization was on par with what he expected, in particular with the task force regulations coming into play.
“With input from experts in public health, substance abuse, and law enforcement was tasked with designing a new system of strict marijuana sales and distribution,” he said.
In terms of what impacted the cannabis sector in 2016, de Kloet commented that “2016 saw the emergence of numerous storefronts selling marijuana,” adding that they detracted from the legitimate sale of of product from licensed producers. To that end, de Kloet said the amendment of the Marijuana for Medical Purposes Regulations (MMPR)–which subsequently became the ACMPR–provided a solution that allowed registered patients to produce a small quantity of marijuana for themselves.
“These new regulations tremendously impact the industry by providing a regulated source of starting material for patients that require better access, as well as establishing an infrastructure where these patients can now obtain regulated and quality-assurance-tested starting material from licensed producers,” he said.
On that note, Battley said for Aurora Cannabis, “it’s been a transformative year.” Early in the year, the company had a market capitalization of $50 million, and has since grown to $750 million. Battley also said Aurora migrated from the CSE to the TSXV.
Aurora first started selling cannabis in January, he said, adding that they now have over 10,000 patients in their financials.
“It’s been a year of transformative change,” he emphasised. “We have evolved into a leadership position in the sector where we now have the second-highest market capitalization of any cannabis company.”
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Cannabis outlook 2017: legalization in play
Moving into 2017, as mentioned it’s poised to be an eventful year for the marijuana sector.
de Kloet expressed similar sentiments, noting that Beleave is of the opinion it will be a “strong market” going into 2017, with new regulations coming into play, with the government working towards regulating the cannabis market.
“The LPs and those hopefuls that are soon to be licensed producers of cannabis under ACMPR stand to grab a major share of the exponentially growing market,” he said.
Battley also said that 2017 is “going to be another enormous year,” for the cannabis sector as the federal government moves to legalize it.
“That’s something we take very seriously and want to ensure it’s done right,” he noted.
What’s more, Battley said he is a member of the Board of Directors of Cannabis Canada, who he says are working closely with the federal government to ensure the legalization of cannabis “is done in a careful, appropriate and sustainable manner that protects public health, public safety and is good for consumers, and also good from a business perspective.”
“We’re looking forward with great anticipation to 2017, and it should be a significant year in the history of the development of the cannabis sector,” he said.
Interestingly, Battley said the world will be watching carefully as Canada becomes the first developed country in the world to legalize cannabis for consumer use, noting that a new industry is being developed in real time.
“We are the pioneers in this space in the world, so it’s even more important that we get it right, and we get it right the first time,” he said.
With legalization coming into play in the spring, investors will surely be watching how the industry unfolds in the early months of the year, and beyond.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: 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.
Beleave is a client of the Investing News Network. This article is not paid for content.