By / September 10, 2019

Legal investment in marijuana around the world

Around the world, there are laws that strictly regulate not only the sale but also investments into marijuana. However, medical marijuana is legal in 30 countries and efforts for legislative changes are already underway. This means that the market is growing rapidly. In the first quarter of 2019 alone, Canada shipped over 20 tons of dried cannabis.

How does it relate to trading and investment?

You can already invest in the index of many hemp companies. The total estimated value of hemp companies entering the stock exchange is approaching $80 billion. However, this is mostly made up of about 200 joint-stock companies.

The Canadian cannabis industry started in 2017

Research into the medical properties of marijuana is a well-known discussion. It is proven to have positive effects on the treatment of certain diseases. However, politicians continue to fail in capitalizing on this market. Many continue to hold the belief that cannabis marketing, even on prescription only, would increase interest in drugs and lead to more drug addiction.

Eventually, after successive studies that proved the effectiveness of cannabis in treating chronic pain or appetite stimulation, more countries are allowing it to circulate in a strictly controlled manner. Today, a doctor can prescribe cannabis in 30 countries around the world.

Investment in marijuana
Medical marijuana is legal in 30 countries and legislative changes in this area are already underway. (Source)

Where is recreational marijuana legal?

In two countries – Canada and Uruguay – you can smoke marijuana without restrictions. The police forces were able to admit that they did not win the fight between dealers and smugglers. Besides, the budget had no influence on the trade and the quality of cannabis. The introduction of legal selling changed the game.

In the Netherlands, you can have up to 5 grams of marijuana for your own use, which you can easily buy in coffee shops.

Although the law is not always clear, companies in this sector form quickly. However, the large, stock exchange-listed companies have always been around. Many of them buy goods in Canada to sell in pharmacies in Germany, Australia or New Zealand.

Marijuana Plant
In 5 months after legalization, Canada sold $247 million worth of cannabis. (Source)

Investment in marijuana

In 5 months after legalization, stores in Canada sold its cannabis for a total value of $247 million. It is worth noting that the stores selling this product are still relatively small. Though it takes several months to get all the permits, licenses and procedures are in place.

However, it is already possible to invest in companies that earn money from medical and recreational marijuana. It is also possible to invest in the whole sector. The USCANNA hemp index, listed on the XTB platform, contains 20 hemp companies. 16 from Canada, 3 from the USA and 1 from the UK. It can trade with a leverage of 1:10.

Four companies are responsible for half of the index value: Tilray, Canopy Growth, Aurora Cannabis, and GW Pharmaceuticals. When analyzing the value of the index, it is, therefore, worthwhile to start by focusing on the results. As well as on the publications of the Canadian government, which reports monthly on the results of cannabis sales by licensed sellers.

(Featured Image by Austin Distel)

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