Mexico delayed the legalization of cannabis until early November…

You already know cannabis globalization is an unstoppable force, so it should be no surprise that Mexico has been getting ready to unleash a legalized recreational market.

As a quick recap, you can access our report about Mexico’s cannabis legalization efforts right here.

On October 23, Mexico’s Supreme Court was supposed to vote for the legalization of adult-use cannabis.

Well, it has delayed the legalization.

The Senate Committee said the bill being reviewed would require more time, so the Senate asked the Supreme Court to extend the deadline.

However, the Supreme Court might not wait until the Senate reviews the bill. It could move forward and prepare a general declaration of unconstitutionally, which would not legalize regulated, recreational cannabis to be sold in retail stores.

However, it would allow home-grown cannabis in Mexico.

The bill will be reviewed again in early November, according to Mexican politician Ricardo Monreal.

Again, this is just a short-term setback, and we will have more updates for you as they develop.

In terms of legalization across the globe, one of our members wanted to know the timeline of when Colombia will legalize cannabis. When that happens, that will open up a lot of investment opportunities because Latin America could become the king of cannabis exports.

I have that timeline for legalization for you right here…

Colombia legalized medical cannabis for certain patients and decriminalized personal cultivation and consumption. But when will the country legalize recreational cannabis?

Colombia Legalization Timeline

We’re receiving a lot of questions about Colombia, and for good reason.

Like I said earlier, Colombia could be a part of what will become one of the most important cannabis exporting regions of the world.

Glenn D. asks: “What time frame do you give on Colombia legalizing recreational cannabis?”

It’s hard to tell, Glenn. There is a growing sense in Colombia that it should commercialize recreational cannabis but, similar to the United States, there is also continuing resistance to legalization.

In particular, President Ivan Duque Marquez and his party oppose legalization and have been trying to slow the growth of medical cannabis.

On the other side, several smaller parties have endorsed adult-use cannabis markets.

One factor that may slow the move towards commercialization of adult-use cannabis is that after legislation and court rulings, possession, personal cultivation, and even public use of cannabis are all legal.

That may remove some pressure for a fully commercial cannabis industry among some people.

In the long run, I think the money will win – the export market is potentially very large, but countries will be slow to accept recreational cannabis from a country that does not allow it, and of course an in-country commercial cannabis market can generate taxes that the home-grow market cannot.

But a full commercial recreational use law is unlikely in the next 12 months.

The Future of Constellation and Canopy Growth

Aaron H. asks: “Regarding Canopy Growth, do you see any type of situation that could happen in the future which would cause Constellation Brands to withdraw its support of Canopy completely and abandon the cannabis market?”

I don’t think we’re anywhere near that point, Aaron, but it’s not impossible!

As I’ve written before, I think Constellation Brands (NYSE: STZ) is among the best-managed companies in the world. The main reason I think that is because the company’s management has an outstanding long-term strategic vision.

It’s that vision which led Constellation to Canopy Growth Corp. (NYSE: CGC) and the cannabis market in the first place. But another asset the company has is the ability to reposition itself if it has made a mistake.

I don’t think the Canopy investment was a mistake. Constellation’s investment not only gives them control of the largest company in the cannabis business, it gives them a route to the U.S. market through the Acreage Holdings (OTC: ACRGF) acquisition and the most extensive portfolio of international investments.

Canopy is a global company – something to think about when people talk down the Canadian market.

If Constellation disagrees, they haven’t said so yet. And they just sent one of their most talented members to be Chairman of Canopy. So they’re increasing their commitment; not reducing it.

If Constellation were to change its mind, it probably wouldn’t do so for years. That’s because its warrants don’t expire until 2023. Even if Constellation were to sour on Canopy, it can’t really do anything about it until then.

Aaron also had another question.

Aaron H. asks: “Should we be looking at any banks in particular besides Severn who might take off if the SAFE Banking Act is passed?”

Not that I’ve found, Aaron.

Most of the banks that I’ve found that are currently banking cannabis companies are either Credit Unions, which are owned by their members and not outside stockholders, or privately-held smaller local banks.

And most of the other banks have kept their cards close to the vest regarding cannabis banking.

After the SAFE Banking Act passes, whenever that happens, I expect to see a host of announcements from small local and regional banks. I don’t expect the big guys like Chase and Bank of America to rush in just yet.

So I’ll revisit the issue at that time.

Robert H. asks: “What is the claim in KushCo owning the rights of a Chinese manufacturer? Before ‘Made in China’ becomes a problem, will they work a deal with the FDA to control counterfeit?”

Robert, I think you’re referring to the KushCo Holdings Inc. (OTC: KSHB) deal with De La Rue, which will allow KushCo to sell authentication stickers to vape manufacturers and other cannabis product makers.

It’s a smart move.

As I wrote when the deal was announced, it won’t make a lot of money for KushCo but it will help the company with its strategy of becoming more tied to larger customers. Those customers order more products from KushCo than smaller customers.

However, subsequent events have overcome the benefits of that deal.

When the company raised capital on September 26, it sold an enormous amount of cheap stock and a lot of it went to uncommitted holders – people more interested in a quick small profit than a longer-term larger profit.

Those shares and the warrants that accompany them basically put a cap on KushCo’s share price of around $2.25 per share.

That’s about 33% above the current levels, and when the cannabis market recovers, I expect other cannabis companies to see share increases far above that level.

Take care,

Greg Miller
Greg Miller
Executive Director, National Institute for Cannabis Investors


Comments

5 responses to “Cannabis Globalization Is Still Ready to Take the World by Storm”

  1. Hi Gregg,
    I was wondering if you think that most of the smaller marijuana companies will not be able to survive a recession/depression in the coming year or so? With money tight, and companies not making profit. Do you see the smaller companies going broke, or being bought out by the bigger players?
    Thanks,
    Jeff

  2. Mpx international has insider buying.thinking about buying before they report on the 5th. What r your comments on cresco and origin house .buy more or wait for earnings?

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