CULTURE
What’s Next for Pot Stocks? This Canadian Cannabis Investor May Have the Answers
Paul Rosen made a bet on Canada’s cannabis six years ago. Now, he is seeing it pay off on a global scale.
Published on October 29, 2018

On October 17, Canada made history by becoming the second nation to allow legal sales of adult-use cannabis. Although Uruguay federally legalized in 2014, the Latin American nation designed its system to solely benefit citizens, with weed price-fixed to snuff out the local black markets. Canada, on the other hand, positioned itself to dominate cannabis commerce on a global scale. 

Right now, the U.S. accounts for 90 percent of the burgeoning $9.5 billion cannabis industry. In the next four years, worldwide, the legal industry is expected to rake in over $23 billion, with Canada taking 17 percent of the share. By 2026, legal weed may be worth $50 billion, and by 2030, a cool $75 billion — more than global music and video game sales combined. 

Earlier this year, Constellation Brands, the makers of Corona beer and Svedka vodka, began pouring billions of dollars into Canopy Growth, Canada’s largest cannabis cultivation outfit. Even former U.S. Speaker of the House John Boehner has gotten in on the action by joining the board of Acreage Holdings, a U.S. cannabis company vying for public listing in Canada’s stock market, and by selling private investment advice for an undisclosed sum.

So, how are the Canucks poised to take over? For one, Canada is the only industrialized nation permitting commercial exports and imports of cannabis products. Compare this to the U.S., which not only bans importation and exportation, but heavily restricts interstate transport of cannabis products, as well. 

Canada’s also got the upper-hand when it comes to banking. Canada’s banks can do business with legal weed operations just like any other industry. Big banks in the U.S., however, have denied accounts to cannabis businesses for fear they’ll be prosecuted for money laundering. Pouring salt in a cash-hemorrhaging wound, the GOP-led Congress killed a bill this summer that would’ve allowed cannabis banking under federal law. 

But the Great White North’s greatest financial asset may reside in stocks. Whereas American cannabis companies are struggling to receive public listings, or they’re bombing as soon as they debut, Canadian cannabis companies are going all in. As of last Thursday, Canada’s pot stocks saw price climbs across the board, despite a slump the day after legalization. 

News reports regarding Canadian pot stocks have rollercoastered over the last month, if not the whole year. This promising market appears to be volatile, but according to one seasoned cannabis investor, there’s still a ton of money to be made.

You just need to know who to bet on.

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Born in Toronto, Paul Rosen got his start as a cannabis investor by co-founding PharmaCan Capital, today known as The Cronos Group. He’s since moved on from Cronos and recently founded Tidal Royalty Corporation (not to be confused with the music streaming service of the same name), an investment firm that’s bringing Canadian expertise to the U.S. cannabis market.

“Toronto is the global hub of the cannabis industry right now,” Rosen told MERRY JANE over a phone interview. “It’s where all the capital is, and it’s where most of the large U.S. companies are coming to list their businesses.”

Unlike Cronos, Tidal has its sights set on the U.S., not Canada. With Canada quickly becoming the global hub of cannabis, why is Rosen’s firm looking to the tightly regulated, legally ambiguous U.S. market for a financially promising wager? MERRY JANE talked with the seasoned investor about Canada's new position to take over the world's weed, how America's long-overdue delay to federal legalization may be a good thing for some investors, and why legal cannabis just makes sense economically.

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Randy Robinson
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Based in Denver, Randy studied cannabinoid science while getting a degree in molecular biology at the University of Colorado. When not writing about cannabis, science, politics, or LGBT issues, they can be found exploring nature somewhere in the Rocky Mountains. Catch Randy on Twitter and Instagram @randieseljay
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