Sometimes it takes someone from outside Canada to make us realize what a great thing we have going.
A few years ago, a Brazilian investment firm, 3G Capital, bought Canadian coffee icon Tim Hortons. In 1995, Labatt Brewery was swallowed up by Interbrew from Belgium, which was in turn merged with AmBev, also from Brazil. Richard Baker, an American, saw the potential in Hudson's Bay Co., which was struggling at the time, and paid more than $1.1-billion in 2008 for the 80 per cent of the chain that he didn't own (although his stake has since been reduced).
While much has been written about the varying degrees of success each of these deals has had, one thing is clear: The buyers saw Canada and Canadian companies as worth investing in.
The same thing happened earlier this month when New York-based Constellation Brands announced it had purchased a 9.9-per-cent stake in Canada's largest licensed medical cannabis producer, Canopy Growth Corp., for about $245-million, becoming the first major beer and spirits company to invest in legal cannabis. Since the news broke, cannabis stocks are at their highest levels ever and show no sign of slowing down.
So the folks who bring you Corona and Modelo beer and Robert Mondavi wine have invested heavily in the Canadian cannabis business.
I say let's raise a glass to their innovative thinking.
The federal government is on track to legalize recreational cannabis use by next July, with a framework for edibles and drinkables to come later, so this investment seems like just good business sense, not to mention the fact that cannabis companies could bring massive disruption to beer and spirits companies. If you can't beat 'em, make a marijuana-infused drinkable and join 'em. With Canada's recreational pot sales forecast to reach $6-billion by 2021, surpassing the $1.3-billion estimate for the mature medical-marijuana market, according to Bloomberg, the only mystery is why an investment such as this didn't happen earlier.
On the community side of the ledger, there are good reasons to strictly regulate the sale of cannabis, especially with respect to teenagers and their still-developing brains. The Canadian Centre on Substance Abuse says as much as 5 per cent of Canadian adolescents – and as much as 10 per cent of Grade 12 students – smoke pot every day. Clearly, enforcement will be a challenge once cannabis is legalized, not to mention roadside drug testing for impaired driving, but it has to be better than the black market.
The issue now is for Canada to boldly step up and own this space. As wine is to France and whisky is to Scotland, let cannabis be to Canada.
The world needs more Canada, but in an uncertain marketplace, the world could also use more Canadian cannabis. Why? We've got the talent, the smart regulatory oversight of everything from cigarettes to alcohol to banking, a thriving innovation ecosystem bursting with ideas, horticultural knowledge and expertise, established distribution channels and a Prime Minister with a globally cool image.
All these attributes contribute to a marketplace that is open, transparent, and, most importantly, trusted by consumers. And trust will be paramount as new cannabis consumers make their way through this new lexicon of Indicas, Sativas, Purple Kushs, White Widows, CBDs and THCs.
Here are three action items we can tackle now as we move toward legalization:
- Augment the government task force with savvy business people who understand how to build brands (and who have actually used the product) and who can guide this initiative to put Canada on the cannabis map. Who is Cannabis Canada’s Elon Musk/Jeff Bezos/Mark Zuckerberg, who can create a Cannabis Canada Development Office to co-ordinate, promote and manage our expertise?
- Present factual and realistic information about cannabis. Counter the old-school “reefer madness” that often surrounds the product with information from reliable sources that educates and informs so that consumers can make intelligent choices.
- Allow branding of cannabis by producers so that consumers can make informed, knowledgeable choices. Plain packaging is fine for commodities such as garbage bags or aluminum foil; allowing some branding and marketing will ensure all players large and small have an opportunity to succeed and also to help kill off the black market.
This is a once-in-a-lifetime opportunity where an entire market is being created, and there's no reason Canada can't be a recognized global leader in the responsible use of legal cannabis.
Peter Shier is president of Toronto-based Naked Creative Consultancy.