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International Cannabis Trade Explodes, Canada Capitalizes

August 10, 2018 7:46 am
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International Cannabis Trade Explodes, Canada Capitalizes

Cannabis is slowly taking root in increasingly tolerant communities. The incremental decriminalization or legalization of cannabis across the world has fed an expanding international market trading the plant, its extracts and its end products.

"2018 has seen a lot of trends in cannabis, but the beginning of an international market infrastructure is one of the most promising features of the industry for investor interest,” AxisWire CEO Cynthia Salarizadeh told Benzinga.

Where The Money Will Go

In the last year, Canada followed Uruguay to become one of just two nations to completely legalize marijuana, and Peru, Mexico and Chile legalized medical cannabis. Experts expect the south to attract global investments.

“Central and South America are sleeping giants that could eventually become regional hubs for cultivation considering the ideal growing conditions,” Salarizadeh said. “Europe is moving slowly, but will become a major market for imports until their infrastructure allows for full-scale operations internally. Africa and Australia are also hot spots to keep an eye on.”

Related Link: Women Execs React To Cannabis Trends Report Highlighting The Rise Of Females In The Marijuana Industry

Who Will Benefit Most

Canadian companies have capitalized on the global expansion by targeting foreign markets with little competition, where high demand and low supply justify price surges and present wide margin opportunities. Canadian exports are currently seen to prop up the German market, which is struggling to meet demand after recent legalization of medical use. AxisWire named Aphria Inc (TSE: APH) (OTC:APHQF) and Canopy Growth Corp (NYSE:CGC) prospective trade winners.

“Both companies have started setting up shop in areas that are considered ‘hub regions’ for cannabis on the assumption that the greater market will soon open up over the next several years,” AxisWire said in its 2018 Cannabis Trend Report.

While they profit in the near-term, exporters are expected to see gradual margin reduction as legalization spreads and more competitors come online. 

“The companies that establish a firm footprint now will have a distinct advantage over the latecomers, but don’t be surprised if domestic operators start to give internationally based companies a run for their money,” AxisWire predicted.

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