The cannabis industry has done a lot of growing up in the last few years, even more so in the last few months. Using strategic partnerships and licensing opportunities, large cannabis enterprises are crossing state lines and building business plans with global growth in mind.
With the largest cannabis conglomerates creating a presence in key markets like Canada, Germany, South Africa, and Colombia, it’s become evident that the time is now to prepare for trade across international borders before it’s too late.
Canada: The Global Cannabis Market’s Early Leader
Canada’s status as the first G7 country to fully legalize adult-use cannabis has given a handful of cannabis companies the opportunity to create global relationships and begin wholesale transactions internationally.
Because of its first-to-legalize advantage, there is a great deal of speculation around Canada’s potential to be a production giant for international cannabis trade. While there’s still time, cannabis is becoming more widely accepted and legalized, forcing Canada to move quickly.
It will likely be another few years before US companies are given the opportunity to export internationally, let alone state-to-state. But many are starting to prepare for the inevitable long before it arrives. A few large enterprises already have the funding, the global infrastructure, and the momentum they need to start crossing borders as soon as cannabis is legal at the federal level.
Once opportunity is open to the masses, the biggest differentiator will come down to strategy and execution.
Bullet-Proof Strategy and Execution
While it may seem like Canada has plenty of time to become the global export powerhouse, it’s crucial to move quickly and take advantage before other markets legalize.
Similarly, if US cannabis operators wait for federal legality before getting their infrastructure in place, they’re already years behind. Proper execution is business-critical from an infrastructure and process approach to have the capability to “flip the switch”.
How quickly can you obtain the proper export and import permits for both the producer and/or retail distributors?
Do you have cost-efficient and sustainable logistics in place to produce and transport product?
Where do you establish facilities internationally that will yield the most ROI?
Regardless of where your market expansion takes you, the costs of doing business will quickly come to light. To ensure you’re ahead of the competition and maximizing ROI, make sure you have a bullet-proof strategy with data-driven execution to enter your preferred market(s).
Global Cannabis Market Competition and Cost
Currently, US operators are at the mercy of their local cannabis laws and producers. Federally legal cannabis in the US will shift the entire domestic market, with retailers given the opportunity to shop across state lines and naturally looking for the most cost-effective provider.
More so, global imports will increase competition while driving costs down even further. This will be great for retailers and consumers but can put a major strain on cannabis cultivators and processors.
For example, a dispensary in Denver will be able to get product that is comparable in quality from somewhere like South Africa or Colombia for a lower cost than it could get if it was produced around the block.
Inevitably, the competition for cannabis production is going to increase significantly with cost being one of the biggest driving factors.
Keeping your corner of the legal market is important, but if you’ve set your sights on the global cannabis market it’s time to start planning. To ensure you are setting your business up for success, it’s important to do your research, build a comprehensive strategy, and be ready to execute quickly.