With Canada’s recent legalization of marijuana for recreational use, comes one very big problem — not enough pot.
Continue Reading Below
Worldwide spending on legal marijuana is expected to hit $57 billion by 2027, according to Arcview Market Research and BDS Analytics, but crop issues and other difficulties are already plaguing some pot companies.
“What we are seeing is a lot of the companies are missing on supply,” said Purpose Investments portfolio manager Greg Taylor. “Their costs are higher than we expected.”
The hiccup comes as the intensity of the U.S. debate over legalizing recreational marijuana gets higher.
Marijuana is currently classified as a Schedule 1 drug, according to the Drug Enforcement Agency, which equates it with ecstasy, heroin and LSD.
In Taylor’s opinion the midterm elections brought more legitimacy and credibility to the once-taboo industry.
“I think legally the ending of prohibition seems to be a few years away,” he said.
Medicinal marijuana is currently legal in 33 states, while marijuana for recreational purposes is legal in 10 states, including Washington, D.C. However, there are a number of bills making their way through Congress, including The States Act, which would essentially make it easier for cannabis companies to receive financial backing from banks.
Taylor said there’s also talk within the Farm Act that would allow cannabinol, a chemical found in the cannabis sativa plant with antipsychotic effects, to be legalized under hemp growing nationwide.