American Leadership in Cannabis Encouraging Foreign Market Growth
America's cannabis industry today can be summed up in two words: rapid growth. By every metric, from recreational sales, m&a, and easing regulations, America is the world leader in cannabis. This is a unique for a vice consumer package good product because America is typically a follower. In most cases, other countries will develop, test, and authorize, and their findings will in turn persuade American regulators in adoption.
America is leading all other countries—and it isn't even close. In Canada, while its securities laws allow cannabis companies to primary list on its exchange, it is a very restrictive market for consumption compared to America. In Europe, the regulatory debate around cannabis is still about whether CBD can be infused in foods, and has yet to move on to adult use THC. Even in Israel, which is a world leader in research and development of cannabis, restricts its market to only medical.
Foreign regulations may en masse prohibit adult use flower-touching operations in their home countries today, but Americas total addressable market—expected to be up to $73.6 billion by 2027—dwarfs every consumer market in the world if all markets were opened today.
Money is a magnet for innovation. And global entrepreneurs are working on ways to service the industry.
Because foreign companies are restricted from any direct THC-touching activity in their own countries, global cannabis entrepreneurs are looking primarily at ancillary technology, research, and services that complement the American market. We have seen companies that are entrepreneuring in biosynthesis and seed breathing, in cultivation technology and digital solutions.
In South Korea, for example, the government recently lifted regulations strictly prohibiting any commercial or research activity regarding cannabis. It gave limited authority to a few companies to start experimenting and importing seeds. And today there is a growing ancillary technology and research ecosystem in the country. They aren't geared towards consumer products in Korea—they are focused on how they can service the American market.
In Israel, the start-up nation, research and development is in full-throttle with the eye towards selling or licensing their technology to American companies. The technology is as wide ranging from joint-rolling machines, to next generation emulsion technology for consumable cannabis products.
While there is certainly more to dig into on this topic, America's proof of concept for the profitability of cannabis, and the significant upside it represents, is driving companies across the world in markets that make no rational sense otherwise to build cannabis oriented businesses to begin, to join the green rush.
