The cannabis sector has shown tremendous growth in Canada in the past year. The trend is expected to continue next year although growth has slowed down this year. According to Canaccord Genuity analyst Matt Bottomley, revenue in the cannabis sector in Canada will double next year.
Cannabis Industry in Canada to hit $3.16 billion in 2020
In a research note, Bottomley indicated that the cannabis industry in Canada expects revenue of around $3.16 billion next year up from the forecast of this year of $1.46 billion. He added that there is significant growth in retail dispensaries and with the legalization of cannabis derivatives the sector expects massive growth in 2020. The cannabis derivatives dubbed “cannabis 2.0” launched in October and the products could hit shelves by mid-December.
The intensifying competition and additional capacity creates a significant market opportunity. However, there might be some headwinds that the industry could face in addition to logistical challenges in the roll-out of the segment. Bottomley indicated cannabis retail sales could drop in September by 5%from the $121 million posted in August.
However, the analyst indicates that subsequent growth could progress at 5% per month. This is almost a third of the 14% growth witnessed in the cannabis retail industry in Canada in the first 10 months of pot legalization. Although the industry will witness growing interest from consumers as derivatives hit the market, on the other hand, the recreational segment will grow by only 7.5%.
BRNT Group entering the Cannabis space through a partnership
In a bid to leverage the opportunities in the market cannabis companies have been forming partnerships. For instance, BRNT Group recently announced a partnership with Valens GroWorks Corp (OTCMKTS: VGWCF) to produce vape pens. Considered one of the biggest white label agreements, the deal will generate revenue more than $50 million for Valens. The vape pens will be available in specific markets as from the first quarter of 2020 before rolling out to the rest of the country.
Alberta targets 500 retail locations by 2021
With the legalization of recreational use cannabis, different provinces have been licensing cannabis dispensaries. Alberta has been leading the marijuana retail space and it seems it could get bigger. The Alberta Gaming, Liquor, and Cannabis agency is targeting more than 500 retail cannabis stores in the next two years. So far the regulator has approved 306 outlets and by 2021 they expect to add another 200.
48North introduces an innovative way of avoiding frost on its crop
48North Cannabis Corp (OTCMKT: NCNNF) has introduced an innovative way of preventing frost on the outdoor crop. They have used a helicopter to hover above the crop and suck up cold air that could cause frost that could potentially damage the crop. The helicopter moved warm air over the crop area in a temperature inversion to keep the air from freezing.
The cannabis sector is making a significant contribution to Canada’s economy. In August it contributed around $7.92 billion to GDP. Since the legalization of pot last year, the cannabis sector has grown 116% with the black-market falling 22% over the same period.