Earlier this morning, I wrote to you about a potential “cannabis payday”.
I was referring to Canada’s decision, last week, to make cannabis legal for recreational use.
It means that, by the end of August, you’ll be able to walk into a corner shop in Canada, take out your bank card, and buy some weed. They’ll even give you a receipt.
I know from reader emails that most of you think this is a fine development. And you’re interested in how to make a few quid out of it.
Who could blame you? It’s not every day that a $22.6 billion industry pops up overnight.
A few Canadian companies have been preparing for this day for years. They want to be the biggest players in pot — not just in Canada, but worldwide.
And it’s not just Canada. Cannabis is now legal or decriminalised in 38 US states.
North America is leading the way. But in the last five years, lots of rich countries have started to legalise it. It’s like everyone had the same idea at the same time.
Here in the UK you’d never know all this was going on. Sure, we discreetly grow thousands of kilos of cannabis for the export market out of greenhouses in East Anglia — but Brit politicians aren’t saying anything in public about cannabis, good bad or indifferent.
Today I want to show you what’s happening. This goes far beyond Canada. A new global industry is on the way.
I don’t have time to look in detail at each and every country that’s about to legalise pot. There are too many of them. So for now I’ll focus on the big ones.
First up: Germany. Big country. Big market for pot. Germany has issued ten licences to pot growers. It wants the industry to be run legitimately, along Canadian lines. So it’s forced licence-holders to work with legitimate international pot companies (ie Canadian ones — there are no other legitimate international pot companies). Prohibition partners, a consultancy, reckons the recreational and medical pot market in Germany is worth £13bn.
Next up is Italy. Italy is a smaller country than Germany but the Italians are big into their pot. 9.6% of Italians have smoked it in the last year, compared to 4.8% of Germans, according to the UN drugs report 2016.
Pot’s been legal for medicinal purposes there since 2013. But there’s never been a legitimate pot industry there because it’s been illegal to grow it. Now, the Italian government wants to grow pot in Italy.
It’s granted a licence to the military to control the business for some odd reason. We’ll see how that goes. Growing pot for the increasingly open Italian market will be a nice little earner for the Italian military. I can’t see it wanting to relinquish control so that the likes of you and I can get a taste.
Next: Israel. Israel is a world-leader when it comes to pot consumption. 27% of Israelis between 18-65 smoked it last year. So it’s not surprising the Israeli government has a relaxed attitude to the drug. Pot has been legal for medicinal purposes there since the early 1990s.
According to Prohibition Partners, the big potential of the Israeli pot industry is in exports, rather than serving the local market. Israel allows growers to grow far more pot than the local market needs. The rest can go abroad to the likes of Italy, the Czech Republic, Portugal or any other market in which pot is legal for medicinal purposes but not yet legal to grow.
The Netherlands: the most famous example of this (in my opinion) idiotic regulatory approach. In Holland you can buy pot for medicinal and recreational purposes, but legitimate businesses can’t supply it. Seems to me that’s the worst of both worlds: encouraging recreational drug use without discouraging organised crime. But what do I know.
Anyway the Dutch are on the case: a new bill submitted this year will allow the city of Amsterdam to regulate the city’s cannabis supply — ie, licensed growers.)
Greece, Poland, Portugal, Czechia, all belong in the “legal for medical purposes, not yet legal to grow it” basket. They’re a source of demand for legal pot, which the likes of the Israelis, Canadians and Dutch will be happy to supply.
Outside of Europe and North America, the most interesting market by far is Australia. Australia is a typical enough liberal heavy-pot-smoking country, in that it’s legal there for medicinal use and tolerated for recreational use.
But what makes Australia especially interesting is the supply side. The Australian government is like the Canadian one — it sees pot-growing as a big opportunity. Australia’s Health Minister, Greg Hunt, has said he hopes Australia can be the world’s top supplier of medicinal cannabis.
Bingo! That’s exactly what we’re looking for. At the start of the year, the government lifted the restrictions on exports and turned Australia into a potential powerhouse of the global pot industry.
And who have the Australian pot companies turned to, to help make it happen? The Canadians of course.
A Canadian pot company in the Technology Profits Confidential portfolio has joint ventures with Australian pot companies, German pot companies, and pot companies in up to 20 other countries.
They can see the future: pot as a global industry. Pot growers with economies of scale, like AB InBev or Diagio. And them sitting at the top.
The story really starts in August, when the first happy customers walk out of Canadian cannabis shops.