Big banks and beverage companies take the first steps to fully enter this business.
Attendees of the World Cannabis Congress held in Los Angeles were listening to one of the inaugural lectures when news began to jump on the phones. The United States Federal Food and Drug Regulator (FDA) had just approved a new product called Epidiolex to treat epilepsy.
The drug is based on CBD, a cannabis compound with pain-relieving properties. Shares of the company that makes it, GW Pharma, rose 6.2 percent. Specifically, the regulator came to say that CBD-approved drugs will be considered within the minimum hazard category.
For those present at this biennial meeting of cannabis-related industries, the news was yet another sign, yet another, that they are in the right business at the right time.
The reclassification of the CBD compound adds to another series of steps, such as the interest of large beverage conglomerates in the hemp and cannabis derivatives market, in addition to the big Wall Street banks that are closely studying the industry.
Two years ago, applicants to be the first marijuana millionaires cite 2018 as the year in which everything will change thanks to the legalization of recreational use in California, the largest legal market in the world with 39 million inhabitants, and in Canada.
And indeed, everything seems about to change. But at the same time, the new regulation doesn’t come as fast as the accelerated growth of the business seems to be demanding.
Last July, Canada’s Tilray became the first Nasdaq-listed company to produce marijuana for medicinal use. It debuted at $ 17. Last week it was above $ 130 a share.
In August, the beverage giant Constellation Brands announced a $ 4 billion investment in Canopy Growth, a Canadian cannabis company. This is the biggest gamble the marijuana industry has seen so far. For comparison, it is the amount for which Disney bought the Star Wars brand.
All this happens in Canada, which on October 17 will also legalize marijuana for “adult use”, as the industry calls recreational use. It is the second country to do so, after Uruguay.
In the United States, marijuana remains a federally prohibited drug with the same classification as heroin. This makes banks unable to work with that business. But in Canada yes.
Source: El Tiempo
By: Pablo Ximénez de Sandoval, Ediciones El País
