As Canadian cannabis firms continue expansion plans on the international stage, a group of panelists discusses what is needed to continue this momentum.
During the Lift & Co. (TSXV:LIFT) cannabis expo in Vancouver, investors got a chance to catch up on the state of the international cannabis space thanks to a talk with Rick Brar, at the time CEO of Zenabis (TSXV:ZENA), Stephen Murphy, managing director Prohibition Partners, Guillermo Delmonte, president of international division with Organigram (TSXV:OGI) and Jorge Rubio Escalona, a representative from the Mexican federal government.
The panel agreed Canadian firms have mounted an assertive strategy for expansion across the globe as more countries begin moving forward with cannabis policy.
“Canadian companies have benefited from public markets and those public markets has allowed them to I suppose be quite aggressive in their market entry,” Murphy told the Investing News Network in a video interview following his panel.
During the panel, Brar explained public market capital inflow comes to Canada and then gets deployed on the new regions legalizing cannabis.
He added the US is the other country at the center of the capital inflow.
The former Zenabis CEO recognized despite several interests all across the globe from Canadian LPs, the “primary capital inflow” is still going to head to Canada and the US.
According to Brar Zenabis is focused, internationally, in the UK alongside the rest of Europe and Latin America.
Delmonte explained when a Canadian firm prepares for an international expansion, the company has to consider multiple factors such as the political situation and economic needs and pressures from that country.
State of international regulations and challenges of different policy between countries
When asked what the current perspective from the different regulations or policies among countries, Murphy explained it’s a very “disjointed” path for Canadian firms to try and navigate.
Despite this frustration that, according to Murphy, can become expensive as well, the researcher said the United Nations and the European Union are working on creating an “international regulation guideline for medical cannabis.”
Murphy said there isn’t as much pressure from the global organizations to create these guidelines due to the lack of involvement from the US.
Brar asked for the audience to understand the process of legalization is going to take more time than expected on the international stage.
Canada’s position and race for cheapest growth rates
The panelists discussed how, as more markets begin legalizing, new countries with better conditions for the growth of cannabis will become available.
Murphy explained he has seen markets that offer extremely low costs of production, but admitted that option will matter as long companies know who exactly the end-consumer will be.
Both Delmonte and Brar refused the notion international growing of cannabis would outpace Canada anytime soon.
The Organigram executive said he worries about challenges from a lack of experience.
“Canada will remain strongly positioned as one of the global leaders in growing and a hub for R&D, a hub for oil, a hub for all of the ingredients and all of the science,” Brar said.
Murphy explained in the race among Canadian firms to enter international markets, the real determination of winners will be “getting uptake.”
“It’s about those that can not only secure access into that market but all of the surrounding services and complimentary add-ons regarding education, information, patient access and patient data, that really gives the competitive edge to LPs when they enter the market,” Murphy said.
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Securities Disclosure: I, Bryan Mc Govern, 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.