As Marc and Jodie Emery sit in a holding cell awaiting their bail hearing, Cannabis Culture stores across Canada will begin to clean up after yesterday’s mass police raids.
While this ongoing circus of arrests and store reopenings continues to play out on the world stage, stocks of publicly traded Canadian licensed producers get a boost.
Last month, Marijuana.com did an investigative report on the great divide in Canada. The two sides of this gap are the licensed producers who are essentially huge corporations that supply medical cannabis to Canadians and many countries around the world. On the other side of that coin, unlicensed storefronts have popped up in every major city across the country as a result of the pending adult-use market, as well as the lack of proper access to medical marijuana. Ironically, some of these licensed producers also have members of their staff who own dispensaries, independent from their corporate business practices.
The two sides couldn’t be more at odds with each other, and yet both of them blame the federal government for doing a poor job of ushering in proper legislation in the first place while dragging its feet toward legalization.
Like it or not, both sides are clearly symbiotic. When a class action lawsuit was announced against two major licensed producers for using a banned pesticide, unlicensed storefronts and other craft cannabis businesses rejoiced on social media for having been “proven right” about their fears of large corporations taking over the cannabis trade. Meanwhile, when police decide on major law enforcement against storefront dispensaries, stocks for these huge entities go up.
This week saw the latter of the two situations play out, as Canopy Growth Corporation closed almost 6 percent higher by the end of the trading day yesterday. Aphria Inc. and Aurora Cannabis also saw 6 percent gains.
These jumps for the licensed producers were welcome and needed after the lawsuit news and also controversial statements from Bill Blair, Canada’s point-man on pot. His comments to the media last week stated that the rollout on legalization should not be rushed, implying that government efforts may take longer than expected.
Bill Blair’s announcement was undesirable to both LPs and dispensaries, as it indicated this ridiculous and costly dance with law enforcement will continue while the government scratches its head over what to do next.
“These Canadian stocks are a huge battleground for traders and investors right now,” said Alan Brochstein, a founding partner at New Cannabis Ventures in an interview with the Financial Post.
Vahan Ajamian is an analyst with Beacon Securities and he also told the Post that he believes legislation is still on-track for the spring, despite worries it will take longer. “I think everybody wants to see this live for at least six-months, if not a full year before [the 2019 federal election.]”
By day’s end, more than likely Marc and Jodie Emery will be released on bail. By next week, it’s safe to say that their Cannabis Culture shops will reopen, complete with new inventory. At that time, the stock market may have renewed fear of unlicensed storefronts cutting into the LP’s bottom-line.
