Is the Colombian Marijuana Business Actually a Risk to Canada?



Current occasions in Colombia have piqued the curiosity of traders all through Canada and the USA. This led to sensational headlines and opinions, all portray Colombia because the magic bullet that might kill Canada’s place on the prime.

If something, the U.S. is most definitely to usurp Canada, however this doesn’t imply Colombia won’t carry some benefits to the desk.

The query we have to ask is simply how a lot of an impression might Colombia have? Judging by developments up to now, Canada may benefit from the South American nation’s cannabis reforms. However on the identical time, its aggressive benefits should not accessible to everybody.


A Phrase of Warning


First, we have to take a look at the historical past of Canada’s cannabis rollout – particularly the months previous it.

In early October of 2018 – lower than two weeks earlier than full legalization – we revealed an article in regards to the “cannabis bubble.” In it, we identified similarities between financial traits within the cannabis house to the 1995-2000 dot-com bubble.

Generally, traders and most people had been overly enthusiastic, falling for the grandiose guarantees of licensed producers and the federal government. Naysayers had been current as nicely, however their issues had been usually dismissed by consultants and laypeople alike. They didn’t anticipate the horrible problems that we’re simply now beginning to overcome.

If we take a look at the scenario with Colombia, we see some eerie similarities. For instance, 420 Intel states:


“Each Colombian cannabis firm makes an attempt to impress traders and journalists with bombastic rhetoric…The truth is most Colombian-based cannabis corporations are nonetheless struggling to search out their footing whereas being constructed out and plenty of are making deceptive claims within the cannabis house.”


If Canada’s scenario has taught us something, it’s that producing hype creates excessive expectations – ones that even probably the most optimistic estimates are unlikely to satisfy.


Who Advantages?


Right now, solely CBD is at play between Canadian marijuana giants and their subsidiaries in Colombia (and elsewhere).

There are many nice licensed producers in Canada who might reap the rewards of a theoretically profitable Colombian medical cannabis market. The issue is that, relating to Canada and Colombian marijuana investments, the outdated cliché of “you must spend cash to make cash” applies – within the tons of of hundreds of thousands.

Consequently, the mega-corporations are in a position to make investments, whereas smaller “mother and pop” licensed producers both get unnoticed within the chilly, or purchased out by “Large Hashish” (or some variant of that time period that can quickly turn into a damaging buzzword).

420 Intel explains:


“In line with Latin American knowledgeable journalist Javier Hasse, different massive, publicly traded corporations together with Aphria (NYSE:APHA), Wayland Group Corp (OTCMKTS: MRRCF), Chemesis Worldwide Inc (OTCMKTS: CADMF), Cronos Group (NASDAQ:CRON), and Aurora Hashish (NYSE:ACB) have additionally made multi-million greenback investments within the nation. Colombian cannabis firm Spectrum bought to Cover Development.”


After all, these are all nice corporations who produce high quality cannabis and – to our data – adhere to authorities laws. However they’re all massive gamers within the business.


Does Colombia Actually Threaten Canada?


Based mostly on the observations to date, Colombia’s alleged menace to Canada’s marijuana business stays largely theoretical.

420 Intel factors out that almost all of those boisterous Colombian corporations are barely utilizing any of the land they chose for cultivation and are nowhere close to the grandiose expectations that giant traders need.

If and when Colombia’s manufacturing meets its rhetoric, its marijuana business may very well be a menace – however to not everybody. Smaller producers won’t be able to compete in opposition to the monetary onslaught of huge companies reaping the advantages of low cost labour and decrease overhead value in South America.

If something, it is going to trigger a shift in Canada’s marijuana business, with smaller licensed producers going extinct, being swallowed up by massive names like Aphria and Cronos Group who reap the rewards of worldwide commerce.

After all, quite a bit must be settled earlier than such a theoretical state of affairs takes place. Colombia, for all its hype, won’t rise in opposition to its North American rivals anytime quickly.


WeedAdvisor’s Position in a Balanced Hashish Business


Whereas we’re glad to assist organizations of all sizes and shapes, the very last thing anybody desires is to see worldwide commerce erode our personal financial system. With cannabis being such a brand new commodity after a protracted interval of prohibition, now we have an opportunity to make sure a various business.

But when traders proceed to give attention to the “subsequent massive factor,” not solely are they threatening our personal financial system, however – if historical past taught us something – they’re additionally setting themselves up for disappointment.



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