“The noises in the making can be very distracting,” he said. “Here, dedicated active portfolios can cope with this noise and create added value.”
He added, “As Canadians, we have the privilege of participating in regulatory arbitrage around a secular trend. The near-term opportunity is undoubtedly in the US, but a global industry is emerging around the cannabis and hemp industries.
“The fundamentals continue to impress in the United States and it’s important to invest through small wins. The federal reform will come and actually take this industry to the next level, but the organic growth that is available under the current infrastructure remains robust and attractively valued on an absolute basis, across sectors and regions. “
Aside from the noise, while Canadian producers are putting together the blueprint for the industry, the US is on a path of constant proliferation. At the state level, incremental reforms have been passed across New Jersey, Arizona, Montana, South Dakota, Mississippi, New York, Virginia, New Mexico, Alabama, Louisiana and Connecticut since the November 2020 elections alone.
Significantly, some of the country’s largest companies have advocated liberalization; Amazon has announced support for the MORE Act and Apple allows cannabis-related apps to be listed in the AppStore. The growth at the state level is also noticeable. For example, since the legalization of adult use was introduced in 2020, Illinois has already collected more tax revenue from the cannabis industry than the state’s entire alcohol industry, according to Purpose. In the US, legal cannabis sales exceeded $ 17.5 billion in 2020, and that number is projected to double in the next five years, disregarding federal reform.