The North American cannabis industry is developing

Demand for cannabis regulation in emerging North American markets is undeniably high.

However, in 2021, the growth of consumer demand did not lead to profit. Even the February support from RedSit’s WallStreetBets was not enough to fuel a steady trend for Tilray, Canopy Growth, Aphria and Aurora Cannabis. However, as the foundations of this emerging sector strengthen, new estimates for 2022 suggest that massive growth is inevitable. In 2021, more than 141 million Americans had access to so-called “legal” cannabis, indicating a turnover of $ 43 billion by 2025 (1). A further increase in the cost of this product and the number of countries that have legalized it will lead to a contribution to the GDP of this sector on a par with clothing and leather goods.

Recent developments

Legal uncertainty has long hampered the growth of the North American cannabis industry, but the country’s political shift in favor of the Democratic Party increases the likelihood of passing legislation that would support the growth of the sector.

A new Democrat-backed bill is expected to be passed in early 2022, disrupting the system by allowing banks to offer their marijuana business services. The Banking Act on Safe and Fair Enforcement (SAFE) accompanies the legal reform of the cannabis industry by providing them with access to essential financial services that were previously difficult to obtain. In particular, this law prohibits regulatory authorities and the prosecutor’s office from taking action against banks that accept companies as clients in this area. Further legalization will also increase competition among cannabis players in several states. Currently, American organizations are the main beneficiaries around the world, but they face stiff competition from large Canadian manufacturers. The merger of Tilray and Aphria in 2021 created the world’s largest cannabis company by revenue. The new Canadian-based company expects to save $ 81 million before tax within 18 months of closing the deal. In December 2021, its market capitalization was $ 4.42 billion (2).

Canopy Growth, a Canadian company that produces, distributes and sells a variety of cannabis and cannabis products for medical and recreational use, is a great illustration of the sector’s growth potential after opening 305 new stores in Canada in the third quarter of 2021. However, further growth will largely depend on the provincial government’s willingness to speed up the notoriously stringent licensing process, which will make it easier for consumers to access the ever-growing range of legal cannabis products. Prospects for 2022. For this undervalued sector to reach its full potential, it is important that the legalization process develops and that wider product ranges attract more consumers. Profits are expected to come mainly from recreational marijuana and related products, rather than medical cannabis.

Cannabis certificate Swissquote is aimed at those players in the cannabis industry who can best benefit from the development of this sector, whose income will come mainly from recreational marijuana.

ISIN CH0587304764
Price 058730476
The symbol for THCLTQ