There is no doubt about the future capacity of the greenhouse effect in Canada. And it is that the same will be significantly more than what the market requires. In fact, legal producers expect their first advantage, in the cultivation and large-scale distribution of marijuana, to allow them to export enough supplies abroad. This in order to absorb the excess capacity that is about to impact Canada.
Likewise, it has been said that the positive outlook of Canadians on the marijuana sector is driven by something. The expectation of a potential for massive international growth.
Now, if government surveys are taken into account, it is understood that the medical use rates in Canada and the construction plans of legal producers, we estimate that Canada will have an excessive supply of at least 850,000 kg (85% in excess) for purposes of 2021. Likewise, international demand will have to consume the excess or prices in Canada will fall rapidly at a price as low as $ 2.50 / gram, until enough companies fail to rebalance the market.
According to the cannabis market research firm Brightfield Group, legal sales of marijuana worldwide would increase. They would reach $ 31 billion in 2021 by 2021 from the current $ 6.7 billion. Despite this, the United States will add $ 19 billion of the total, while Canada will have a value of another $ 7–10 billion at retail prices of $ 8 / gram.
It is necessary to emphasize that the United States will not be an export opportunity for Canada in the long term. This would be due to a legal market that already has an excess supply. In fact, there is a thriving black market in the United States. Likewise, the legal statuses have been able to satisfy the demand with legal supply within 12 months after the legalization. Being that for its part, the black market deals with excess demand in the interim.
On the other hand, it is known that other countries are far behind North America in terms of acceptance of the use of marijuana. The use of marijuana for medical purposes has only been decriminalized in parts of Europe and Australia in the last 12 to 18 months. It should be noted that the path from medical acceptance to legal recreational use can be long. On average, it took at least 17 years from the date of medical legalization for the number of medical patients in each state of the United States and Canada to approach 1.3% of the population.
Source: Scott Willis | Grizzle