Investors See Rapid Competition Growth in the Legal Cannabis Market


 
 
11:28 08/10/2018

The legal cannabis market has become highly competitive at a staggering speed. According to data published by Forbes, Brightfield Group estimates that the global cannabis industry was worth USD 7.7 Billion at the end of 2017 and is projected to cross the USD 30 Billion mark by 2021. The industry is expected to witness a compound annual growth rate (CAGR) of 60% as other countries liberalize their cannabis laws.

Earlier this year, California voted in favor of recreational cannabis laws, and on June 19th, Canada had legalized cannabis on a federal level. Currently, California is considered to be the largest market for cannabis, while the United States itself accounts for about 90% of the whole market. However, its dominance is likely to decrease to about 57%, as legalization and decriminalization of cannabis products continues in other nations.

According to Brightfield Group's official blog post, "With cannabis dispensary and product data now going back over two years, our surveys of marijuana product availability in major US state markets reveal several clear indicators that the market is growing increasingly competitive and crowded… One example of this is exhibited by the increase in the variety of branded products available at US dispensaries. Two years ago, the average US dispensary carried 94 different types of branded marijuana products. One year ago, that number had grown to 118, and by January of this year, a typical dispensary carried over 150 different branded products."  

A few cannabis and legal marijuana companies that are active in the markets are:

Canopy Growth Corp. (NYSE:CGC) CGC  is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms. The Company recently announced that it has completed the previously announced acquisition of Canopy Health Innovations Inc. ("CHI"), including the subsidiary operations of Canopy Animal Health Inc. ("CAH"). The Company believes its strategy of integrating and aligning CHI's clinical platform with the international work of Spectrum Cannabis, will accelerate its comprehensive research programs, build evidence around Canopy products and formulations and ultimately improve patient access to medical cannabis globally. CHI has built a diversified business focused on unlocking the therapeutic and commercial potential of cannabis for both humans and animals. Incorporating CHI into this ecosystem as a wholly-owned subsidiary will increase efficiencies and unlock the full potential of CHI's significant IP portfolio including 39 patent applications filed with the United States Patent Trade Office. "Canopy Growth continues to expand its medical cannabis leadership around the globe with an ecosystem that includes world-class production and infrastructure, patient and healthcare practitioner education, and robust clinical research," said Mark Zekulin, President & Co-Chief Executive Officer, Canopy Growth.

Constellation Brands Inc. (NYSE:STZ) STZ  is a leading international producer and marketer of beer, wine and spirits with operations in the U.S., Mexico, New Zealand, Italy and Canada. Constellation Brands announced last year that it had signed an agreement to acquire a minority stake in Ontario, Canada-based Canopy Growth Corporation, a well-respected public company and leading provider of medicinal cannabis products. This investment and relationship is consistent with Constellation Brands' long-term strategy to identify, meet and stay ahead of evolving consumer trends and market dynamics, all while maintaining focus on its core total beverage alcohol business. Constellation has no plans to sell any cannabis products in the U.S. or any other market unless, or until, it is legally permissible to do so at all government levels. "We are thrilled to have the backing of such a well-established and respected organization such as Constellation Brands," said Bruce Linton, Chairman and Chief Executive Officer, Canopy Growth Corporation. "We look forward to working with the Constellation Brands team to access their deep knowledge and experience in growing brands as we continue to expand our business.”

22nd Century Group, Inc. (NYSE:XXII) XXII  is a plant biotechnology company focused on technology which allows it to increase or decrease the level of nicotine in tobacco plants and the level of cannabinoids in hemp/cannabis plants through genetic engineering and plant breeding. The Company's primary mission in hemp/cannabis is to develop proprietary hemp strains for important new medicines and agricultural crops. 22nd Century's wholly-owned subsidiary, Botanical Genetics, LLC, entered into a worldwide license agreement with Anandia Laboratories Inc. Under the terms of the agreement, the Company was granted an exclusive sublicense in the United States and a co-exclusive sublicense in the remainder of the world, excluding Canada, to patents and patent applications relating to the cannabis plant that are required for the production of cannabinoids, the major active ingredients in the cannabis plant. The Anandia sublicense continues through the life of the last to expire patent, which is expected to be 2035.


This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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