Ky Trang Ho, a former contributor for Forbes.com covering investing in exchange-traded funds and mutual funds, is bullish on the cannabis industry, especially the Canadian strain. Though everything seems like business as usual for U.S. cannabis companies, they live in fear of prosecution after U.S. Attorney General Jeff Sessions announced Jan. 4 that he’s giving federal prosecutors leeway to crack down on cannabis companies for drug trafficking in states that have legalized cannabis.
Recreational marijuana has been legalized in nine U.S. states and Washington D.C. But it’s illegal on a federal level owing to a strange discrepancy between state and federal laws. Some 12 other states are considering legalization this year. Both Republican and Democrats lambasted Sessions’ move and swore they’ll defend their state rights. But no business wants to be the one Session uses to flex his political might.
Companies are putting expansion plans on hold and moving assets, attorney Scott Martinez told Ky Trang Ho in an article she wrote for Seeking Alpha called “Why The New Marijuana ETF Should Grow Like A Weed.” Thus Sessions’ political wrangling will be bullish for Canadian cannabis companies. Canadian cannabis companies do business like any other in the country.
“They and have the freedom to grow overseas without any threat of U.S. competition,” Ky Trang Ho wrote. “Canadian marijuana businesses have legal access to crop insurance, bank loans, tax write-offs and licenses to export and expand overseas.”
U.S. marijuana players, by contrast, cannot enjoy any business benefits because cannabis is federally illegal. Canada plans to legalize recreational cannabis fully by July 2018.
Canadian Cannabis Imperialism
Canadian cannabis companies are expanding into every continent around the world except Antarctica unlike their American counterparts. U.S. cannabis companies may only grow and sell in their own states because moving the drug across state lines would be considered trafficking, Ky Trang Ho told the Debate Report.
Isodiol International (CSE: ISOL) (OTC: ISOLF) (FSE: LB6A.F) announced Monday that it had made a deal to launch its line of hemp-infused products called ISO-Sport in Europe at the Cage Warriors show in Liverpool, England on February 24, 2018. The show will broadcast on UFC Fight Pass.
Isodiol International makes a variety of sports nutrition supplements and body care products:
● IsoSport™ Pro369 Hemp Protein Powder
● IsoSport™ Hydrate Hemp Water
● IsoSport™ Drops CBD Beverage Enhancer
● IsoSport™ Guard Oral CBD Spray
● IsoSport™ Ease Pain Relief CBD Capsules
● IsoSport™ Mend Cooling CBD Pain Cream
● And Heneplex™
High Hampton (CSE: HC) is expanding into California through a handful of deals in equity, royalty, and direct property ownership with leasing agreements. The Toronto-headquartered firm provides help with branding, distribution, finance, licensing, and operations and real estate within the legal cannabis industry. High Hampton owns a 10.8-acre property and is working on getting Conditional Use Permits (CUP) for growing and manufacturing in Coachella, Calif., Technical 420 reported.
Aurora Cannabis of Edmonton is building a 1 million square foot facility with that’s slated to produce more than 120,000 kilograms annually when at full capacity in Odense, Denmark.
“Construction to be phased. Cultivation following the completion of first 200,000 square feet expected in calendar third-quarter 2018,” Aurora said in a statement releasing fiscal second-quarter 2018 results ended Dec. 31, 2017.
In Germany, Aurora is getting a cultivation license to build a facility. The tender process is expected to be done by March 2018. It has gotten all the necessary permits to import medical cannabis into Germany through Pedanios, the European Union’s largest cannabis distributor, which has supplied more than 2,200 pharmacies.
Aurora has bought a 17.62% stake in The Green Organic Dutchman (TGOD). The two companies signed a supply deal to provide Aurora up to 20% of TGOD’s production capacity at its Ancaster and Valleyfield facilities. Upon completion, they should add about 23,000 kilograms annually of organic cannabis to Aurora’s portfolio.
Aurora is making its way down under via Cann Group in which it has taken a 22.9% stake. Cann Group has received a license in Australia to import Aurora’s products once Health Canada gives Aurora an export permit.
American Companies Capitalizing on Canadian Cannabis
U.S. companies are buying stakes in Canadian cannabis companies to jump aboard Canada’s green rush.
Alliance One International (NYSE: AOI), a tobacco supplier based in Morrisville, N.C., is buying two Canadian cannabis outfits: Island Garden, a licensed producer in Prince Edward Island and Goldleaf Pharm, which is waiting for approval to grow cannabis in Ontario. Alliance One stock rallied as much as 41% following the news Friday and then another 21% Monday. Alliance One expects the two companies to oversee cannabis growing operations totaling 1 million square feet. Alliance One is a middleman that buys tobacco from farmers and resells it to major companies like Altria (NYSE: MO).
In November, Constellation Brands (NYSE: STZ), the king of alcoholic beverages, forked over $190 million for almost 10% of Canopy Growth (TSE: WEED). Its investment has returned 170% since November.
For the sake of full disclosure, Ky Trang Ho is very biased in favor of cannabis legalization given that she’s the chief marketing officer of Firefly 420, a cannabis startup in the Los Angeles area. The company aspires to be the Procter & Gamble of cannabis offering THC- and CBD-infused foods, medicines and body care products.
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