Updated: Nov 7, 2019
So what is Cannabis 2.0?
Firstly you need to know that Canada passed the Cannabis Act in the House of Commons in late November 2017. The Cannabis Act legalised the use of recreational cannabis nationwide in Canada from October 2018.
Cannabis 2.0 is the second phase which has made edibles containing cannabis and cannabis concentrates legal on October 17, 2019.
Three new classes of cannabis products have become legal.
Edible Cannabis (Food and Beverages Products, Lozenges and Capsules)
Cannabis Extracts (Vaping, Wax and Oil)
Cannabis Topicals (Product applied to person, such as Lotions and Creams)
Will Cannabis 2.0 re-light the fire under the cannabis market?
The cannabis market is big and growing. According to a report from investment bank Jefferies, the global cannabis industry could be worth as much as US$130 billion a decade from now.
The size of Cannabis 2.0 is also substantial, with Deloitte having just "estimated that the annual Canadian market for edibles and alternative cannabis products is worth C$2.7 billion.”
The market has seen a phenomenal rise of all cannabis stock prices, while people predicted the potential of the new sector. This has recently been followed by a raft of the biggest companies in the sector, like, Canopy Growth and Aurora reporting much larger than expected losses and extending dates to achieve predicted profit targets, creating numerous questions.
Cannabis Stocks this year
We have seen cannabis stocks plummet this year with some of the major companies in the sector dropping over 50%. The Cannabis Index chart above provides an overview of the sector, as it provides the gross total return performance of the 20 largest publicly listed US and Canadian companies. From the peak of 1273 on the 19th March 2019 with have seen a market in freefall to a low of 517 on October 10th 2019 a decline of over 40%
But with so many companies rolling out their Cannabis 2.0 strategies there will always be winners and losers in the capture of market share.
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