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Canada Versus the United States: Vying for Dominance in the Cannabis Market

canada and usa darts on bullseye

As the cannabis craze sweeps across the United States, high-value investors are wondering if Canada might have the United States beat in the coming cannabis race.

How could Canada, a country with a smaller population than California, possibly compete with the United States? With progressive, international policies passed by its government, of course. Canadian businesses are licensed to grow and sell weed nationwide. It’s their big “head start” which began in October of this year when the Canadian government legalized marijuana use for adults. But they went much further than merely legalizing marijuana – they funded massive programs for it and set up systems to export medical marijuana to countries around the globe that are beginning to reduce their restrictions. This could skyrocket Canada into dominance if the United States doesn’t up its game.

Right now, Canada is home to around 130 licensed producers, and that’s just counting the ones that the government has given the thumbs up to produce and sell marijuana in both the recreational and medical markets. These companies are worth tens of billions of dollars, and they only seem to be getting larger due to their easy access to funding via financing and stock listings in the country’s progressive industry.

But what about the United States? After all, the U.S. marijuana market is much larger than Canada’s, and experts in the field predict that it could grow at a tremendous rate within just the next few years. It’s often argued that four of the largest marijuana companies out there sit within Canada’s borders. That’s true enough, but half of the top ten operate in the United States with great profit margins — even though the United States government is still prohibiting the product. This has given plenty of investors enough confidence to put a lot of money into United States cannabis businesses.

You have to wonder if it’s really that important that Canada became the first major economy to legalize weed. The country’s population is a fraction of the United States’. This will certainly limit its production capacity in the years to come. But Canadian companies already have ideas to overcome this – they’re getting involved with international markets to help increase their own growth.

The United States is off limits for this since federal law prohibits producers listed on the Toronto Stock Exchange. That certainly isn’t slowing them down, though. They’ve gotten involved with Australia, Colombia Germany, and plenty of other countries to set up hubs from which they can sell medical marijuana. The United States, on the other hand, has to sit on the benches because federal law doesn’t allow U.S. companies to as much as move cannabis across state lines, so companies certainly can’t expect to export it internationally anytime soon. This seriously limits the potential of the U.S. marijuana market.

Some experts say that United States cannabis producers could ride off of Canada’s international mobility by exporting cannabis to them to then pawn off to other countries. After all, the U.S. is expected to produce the major brands, so the profit margins could be very high. But this could put Canadian marijuana producers in a bad spot, reducing them to low wage farmers, unable to compete with the harsh competition of U.S. capitalism.

And let’s talk about that. U.S. marijuana companies can pull in a pretty good profit, especially those that can afford to be licensed to handle and produce marijuana in multiple states around the country, as long as they have legalized marijuana. With around thirty states allowing medical marijuana and ten allowing recreational, these companies have plenty of room to grow. And it helps that the majority of U.S. citizens support legalization, giving the sense that regulations will begin calming down in the coming years. That’s good news for investors, and it looks like it’s only getting better. But Canada is showing its game face, and until the United States’ cannabis companies get federal approval, the competition is on.

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