Is the Cannabis Sector all set for a boom?
Team Veye | 07-Jan-2019
The cannabis industry both medicinal and recreational is already booming and has become a global phenomenon. In Australia about seven people a day are being approved for medicinal cannabis as new research suggests the $18 million industry could be worth billions within a decade.
Access to the drug is still severely restricted two years after its medicinal use was legalised nationally but a new online application system has increased approvals in recent months. Looking at the stats, the Therapeutic Goods Administration approved 469 applications for the drug under the Special Access Scheme between August and September. That’s up from just 97 between January and February.
Currently, most doctors are banned from prescribing cannabis treatment and people who have attempted to gain state and federal approval report being arbitrarily refused. Several Australian states have decriminalised marijuana use or divert users to education programs. The Greens are the only party to advocate for recreational legalisation.
A market intelligence firm Prohibition Partners suggests the nation’s legal medicinal cannabis market, currently valued at $17.7 million annually, could balloon to $1.2 billion by 2024 and then $3 billion by 2028. And, the Australian cannabis industry could grow even more with a recreational market worth up to $8.8 billion annually in a decade if it is legalised soon.
One prominent US hiring website, ZipRecruiter, says cannabis-related job posts jumped 445 per cent last year, outpacing even the technology sector’s growth of 254 per cent.
In parallel, with the recreational use of Cannabis getting legalized in Canada in Oct’18, that sector is also booming. According to research by one of Canada’s biggest banks, CIBC, Cannabis will be a US $6.5 billion (AUD $8.7 billion) industry by 2020 in Canada. The industry has now matured and reached a revenue generation stage but as investors, one needs to be really careful while choosing which ASX companies to put their stakes on.
The major take in all these developments around Cannabis is the global acceptance that has started pouring in and some of the Australia based medicinal Cannabis companies have also entered the revenue generation stage and our analysts feel that it is the right time to buy some of these Pot stocks. But as an investor you need to read between the lines especially the word “Some” which means not all Cannabis companies are worth putting your stakes on. So, keeping this in mind our analysts believe one such hot favourite for our investors could be a company named Creso Pharma (ASX:CPH) which has got roots into another Cannabis Booming base - Canada and appears all to capitalize on the current situation. And, for more such Pot companies that may fetch you decent returns please keep reading our reports.
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