The global cannabis sector is growing rapidly which makes companies like InterCure and World High Life PLC (NEX: LIFE) profit
The medical cannabis market is growing fast among many countries and attracts a lot of investors.
Cannabis legalization is rapidly expanding across North America: 33 states in the US can use cannabis for medical purposes, while the use of cannabidiol (CBD) is allowed in 16 states. Recreational use of mariujana is legal in ten states and the District of Columbia. In Canada, full legalization has been passed in October 2018, but medical use of cannabis has been authorized in the country since 2001.
At the moment, more than 30 countries in the world can use cannabis for medical purposes. In addition to the US and Canada, it includes countries such as Poland, Germany, the Czech Republic, Israel, Uruguay, Australia, and the Netherlands.
Regional cannabis markets are developing rapidly
According to cannabusinessplans.com, the legal marijuana market in North America in 2018 reached $12 billion. The largest share has the United States of $10.4 billion and Canada follows with $ 1.6 billion.
According to Deloitte, the overall cannabis market in Canada, including medical, illegal and legal recreational products is expected to deliver $7.17 billion in 2019. This is an increase of $4.34 billion comparing to 2018. Medical cannabis will generate an additional $0.77 billion and grow to $ 1.79 billion.
According to reports from the Arcview Market Research and BDS Analytics, the legal marijuana market is expected to grow to $40 billion by 2021. HealthEuropa estimates that by 2028 the EU will be the largest cannabis market in the world.
The Netherlands and Canada have started to export medical marijuana. Israel has also recently joined them, so in January this year, the government approved a law that allows marijuana exports. The country plans to increase its export sales by more than one billion euros. According to Forbes, Australia, Germany, Austria, and Mexico already want to trade with Israel.
On the other hand, the lack of export authorization is very detrimental to the United States. For example, in Oregon, cannabis was first legalized in 2015. According to The Guardian, the number of marijuana businesses that have been registered in the state is several hundred more than the government predicted. Because of this, the excess of marijuana in Oregon is currently over 1 million pounds (454 tons).
Companies are no longer as difficult to attract to the cannabis sector as they used to be. For example, the Israeli company InterCure, which recently entered the medical cannabis market, plans to enter the Nasdaq exchange in mid-2019. InterCure, a small medical firm holding company, purchased Canndoc, a medical cannabis maker, in September last year, after they hired former Israeli Prime Minister Ehud Barak.
The company is currently trading in Tel Aviv with a market capitalization of $117 million. In November 2018, the company’s shares soared by 1300% when it became known that InterCure had entered the cannabis market. Last year, the company raised $12.1 million in investment and another $5 million within the last month. The company is currently growing tonnes of cannabis at one of its farms but plans to increase the number of farms and start growing about 100 tonnes in 2020.
European businesses capitalize on the cannabis sector too. The investment company World High Life (NEX: LIFE) has recently made moves to acquire Britain’s top hemp producer, Love Hemp, in a transaction involving all shares valued at 9 million GBP.
WHL plans to help Love Hemp expand into other European markets, starting with Germany in 2020. Love Hemp produces a variety of CBD products such as sprays, vapes, oils, edibles, CBD-infused beverages, and cosmetics, and sells its products in 1,200 UK high street stores. The European medical cannabis market is predicted to be one of the most valuable in the world and will be a key export destination for Latin American countries.