The third major market segment for cannabis companies is legal medicinal cannabis outside Canada. Except for the United States, developed markets are much more acceptable to cannabis in its medicinal form. Canadian cannabis companies (HMMJ) have made those international markets their third key market segments in their quests to grow. Aurora Cannabis (ACB) (ACBFF), for example, has operations in Denmark, Germany, Australia, Italy, South Africa, and the Cayman Islands.
Options in international markets
Canadian cannabis companies already have operations in international markets and are generating meaningful revenue from them. For example, Canopy Growth (CGC) (WEED) already identifies Germany as a significant market and generated 14% of its revenue there in the recent fiscal first quarter of 2019, which ended on June 30, 2018. Its share of revenue from Germany grew from 2% in the corresponding quarter of 2017.
Australia has also become increasingly active in the cannabis domain. As you can see in the above chart, all five companies, including Tilray (TLRY), have operations in Australia.
When newer markets open, these companies may develop international market segments through exports, partnerships with existing players, advisory service on establishing cannabis operations, and the development of company-owned facilities.
With so many companies following identical strategies to capture the cannabis wave in Canada and outside Canada, it’s challenging to find one company that will fit your portfolio. Canopy Growth, Aurora Cannabis, and others that have been around for a while have gained a significant first-mover advantage. These companies may also have easier access to capital than newer companies. However, what we’ve covered in this series gives a framework to cannabis investors of what they should look for when a new cannabis company appears on the scene.