The cannabis sector has grown steadily ever since legalization, a trend that is poised to continue as acceptance and access increase. According to Data Bridge Research, the global medical cannabis market is projected to grow annually at a rate of 18% until 2028.
While the US leads in growth in this category, Canadian companies are legally allowed to list on US stock exchanges and vice versa. Those looking to invest in Canadian companies dealing in medical cannabis and related products need to know the big players and most recent developments in the industry.
Medical Cannabis by Shoppers
The latest play by Medical Cannabis by Shoppers is a big event on the Canadian cannabis scene. Loblaw Companies Limited, the parent company of Shoppers Drug Mart, is Canada’s largest grocer, while Shoppers Drug Mart is the country’s largest pharmacy chain.
These giants have the know-how and expertise to give medical patients professional levels of support throughout their journey. Patients contact Medical Cannabis by Shoppers to receive a medical consultation, and a medical document, which grants them access to a wide range of brands and products.
Given the seamlessness of the mail ordering process, Medical Cannabis by Shoppers Drug Mart is well-positioned to serve Canadian markets. This tailored medical cannabis experience is tax-deductible and may be eligible for coverage under some insurance plans.
Shoppers Drug Mart is a publicly traded company whose stock has risen over the past year and entering the medical cannabis sector isn’t likely to stop this momentum.
Recreational Cannabis Carries Risks for Investors
It seems like every third storefront sells recreational cannabis in cities across North America, but the number of competitors and the changing regulations make it difficult to predict who will be the winners and losers. Like any start-up in a new and growing market, there are inherent risks.
In this context, some firms recommend investing in companies catering to the medical cannabis sector with a proven track record, a broad sales base, and a strong brand. Lack of profitability in the recreational cannabis sector is a major factor; Canada’s largest recreational cannabis company is expected to close more than $550 million in sales for 2021, yet earnings are expected to be negative because they invest heavily in production capabilities.
Medical Cannabis has Room for Growth
The medical cannabis sector is relatively small compared to the $34.3+ billion Canadians spent on pharmaceuticals in 2019. However, the number of patients has grown significantly in the past few years, surging to 292,399 in March 2021. In June 2015, there were only about 24,000, a more than ten-fold increase.
There is no reason to suspect this trend won’t continue.
Thankfully, the stigma around accepting cannabis as a legitimate form of medicine is fading, and more doctors are willing to authorize it for patients to treat a wide range of conditions. With big Canadian players entering the medical cannabis space and considerable financial risks associated with recreational cannabis, look for the former to continue growing.
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