MJBizMag September 2020 - 42

AFFAIRS
FOREIGN
I
f there is a lesson to be learned
from the overseas misadventures of
Canada's large cannabis producers
in recent years, it is this: Being first to
a market is a waste of time and money
if that market is still years (or decades)
away from producing material
revenue-more so if you're unable
or unwilling to bankroll losses in the
meantime.
When it comes to global expansion,
slow and steady is winning the race. Most
of the big spenders from 2017-20 are
not much farther ahead today than they
were when Canada legalized adult-use
cannabis in October 2018.
In recent years, much ink was spilled
on Canada's so-called international
advantage. While American marijuana
companies were largely hamstrung by
federal prohibition and prevented from
competing internationally, Canadian
producers were free to splash their
capital around the world, gaining
leverage and establishing toeholds in
promising markets.
That practice turned out to be
imprudent.
After years of investments and
billions of dollars spent, most Canadian
producers have little to show for their
large expenditures: Barely any have
made meaningful money outside North
America, and now the retreat is in full
force for many of Canada's largest players,
as the need to conserve capital becomes
part of their new survival strategy. (Read
" Global Retreat " on page 58.)
OPPORTUNITIES
ABOUND OVERSEAS
That does not mean global medical
cannabis markets aren't growing. Far
from it.
Revenue-generating opportunities
exist today in numerous countries. (See
" Top International MMJ Markets " on
page 60.)
However, experts urge businesses not
to count their chickens before they hatch.
To provide some perspective, Europe's
medical cannabis retail sales in 2019
were $260 million (240 million euros).
That's about one-third the size of Arizona's
MMJ market.
Unsurprisingly, a handful of large
Canadian producers made the same
mistakes at home as they did overseas,
including an executive-level fixation on
investors at the expense of customers,
resulting in a significant misallocation
of resources. (See " Is Canada Up for
Grabs? " on page 14.)
Those mistakes by the industry's
largest producers opened
the door to opportunities for
competitors. Legalization in Canada
has been a major success story, despite
the challenges experienced by some
companies.
AT HOME AND ABROAD
This issue of Marijuana Business
Magazine takes a close look at the
cannabis market in Canada, which
remains the only G-20 country to have
legalized and regulated an adult-use
industry at a national level-and a
functional one at that. (See page 44
for a high-level look at the markets in
Canada's 10 provinces.)
When it comes to low-THC
cannabis, several international markets
are reigniting industries made dormant
42 Marijuana Business Magazine | September 2020
There has never been a better time to
be in the legal and regulated cannabis
industry, but the sector is not growing
as fast outside North America as some
prognosticators had forecast. For this
reason, it's more important than ever
to make business decisions based on
reality and in accordance with your
company's established strategies and
vision. Entrepreneurs and investors
considering a stake in the international
cannabis market should consider:
* Being first to a market is not as
important as doing it right; be
strategic.
* Revenue-generating opportunities
already exist in numerous countries.
* Your investors are important, but
don't lose sight of your customers.
* Legalization in Canada has been
a major success, and the market is
growing exactly as fast as rational
analysts expected.
* Don't count on regulatory evolution
until it happens, because there's no
telling how fast or slow regulators
will move.
* Be more realistic than optimistic.
Positivity is a good thing, but don't
let it cloud your judgment.
by hemp prohibition in the past
century. Even China, which produced
hemp for thousands of years before
prohibiting the plant from 1985 to
2010, is clawing its way back to the
top of the market. (See " Global Hemp
Potential " on page 72.)
When you're doing business overseas
in the cannabis industry, being realistic
rather than optimistic is everything.
Don't be distracted by " a $160 billion
market " in Country A, which will
develop only if a series of extremely
unlikely policy, political-and potentially
astronomical-events coincide.
Matt Lamers is the
international editor
for Marijuana Business
Daily. You can reach him at
mattl@mjbizdaily.com.

MJBizMag September 2020

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