Canadian LPs are banking on federal legalization in the US, but some are worried that it won’t happen before the 2022 midterm elections, when Democrats could lose control of Congress to Republicans, according to a Canadian Press report.
The $40 billion question
With an estimated $40 billion market on the horizon post-legalization, Canadian LPs like Canopy, Tilray and Valens have been jostling into position through M&A so they’ll be ready to dominate. But the pandemic’s devastation has been blamed for President Joe Biden’s seeming disinterest in helping the cannabis industry grow — much to the disappointment of Canadian LPs, who were excited to see Democrats take control of Congress.
“We’ve been sitting with this perfect political hand for almost six months now … and we’re still waiting patiently as it relates to the administration,” said David Culver, Canopy’s vice-president of global government relations.
Slow and steady
Biden will hardly be swayed by Canadian interests, and not all US companies are in a hurry to join a national Green Rush. Take Terra Tech Corp., which operates in Nevada and California, headed up by CEO Frank Knuettel.
“We have an opportunity to build our company and our industry without the outside competition from really large consumer packaged goods companies or beverage or tobacco companies,” he said.
US MSOs aren’t dragging their feet (well, maybe a bit in California) as capital markets find their footing and consolidation continues. For now, Canadian companies are snapping up US cannabis businesses. By the time legalization happens, Canadians could start getting offers from the US.
“At some point, the script is going to flip,” Knuettel predicted.