by Andrew Kaye, Sweet Leaf Madison Capital
An eighth of Blue Dream can be picked up right next to the place you bought a bottle. Previously, this meant meeting your dealer in the lot behind the liquor store. But now it is as easy as walking to the shop next door. Although the industry has experienced a rollercoaster ride with gains and losses over the past 10 years, the future looks bright. There are still many lessons to be learned, especially from wine and other industries that continue to make billions each year.
Cannabis has the potential to replace wine’s ten-year-old history as a commodity. As international demand grows, the global cannabis market will see significant growth due to the fact that more countries are either easing their restrictions or legalizing it. Cannabis companies will have the opportunity to grow notoriety and increase their demand in the coming years. However, regional terroirs may be as revered as wines from Burgundy or Tuscany.
Same Game, New Players
Nearly 30 countries have decriminalized cannabis possession, or made it medically legal. Other countries like Canada, Uruguay and Malta also legalize recreational cannabis. Germany and Luxembourg are following the lead.
Every change opens up new markets and new opportunities. Looking back at the history of the wine industry from 1990 to today, we see that countries such as Bulgaria, Germany and Portugal were among the top 10 global exporters, just behind France, Spain, and Italy. However, growth is not always good. In the past 30 years, countries like Australia, New Zealand, Chile and Chile have experienced massive growth and recognition for the wines they produce. Bulgaria and Moldova are not in the top ten.
Similar is true for cannabis. Germany is moving towards legalization in 2024. It must find a way to supply the country’s growing demand. For years the Germans have been importing Canadian cannabis for medical use, accounting for 38% of its cannabis imports since 2017 – bringing in nearly 12 tons of extracts and flower in the first six months alone of 2022. Canada is getting good news, at least for now, from what could be a rapidly growing European market. Berlin’s latest proposal seems to ban imports and instead plans to grow and distribute within its borders. Aurora Cannabis has just two years to make the most of their relationship, before it’s time to end it and move on.
Companies are also looking for opportunities to expand their reach into global markets. Cookies, a California-based cannabis retailer, recently opened a Thailand recreational dispensary. This comes just months after Thailand legalized cannabis. Cookies also has three locations in Israel that can be used for medical purposes.
Unlimited Possibilities
This is just the beginning. The future of global legal cannabis is diversification. As cloning, hybridization, and other advances in cannabis cultivation make it more accessible to the public, we will see countries encourage both domestic consumption and international export. Specialized strains will eventually become a sought-after commodity for cannabis enthusiasts around the world. The promotion of cannabis tourism across the globe, similar to what we see in Amsterdam and Humboldt County.
Businesses and brands will need to learn from the pioneers of the industry as it grows. Wine seems to be a good place to start. It will be crucial to learn how to increase recognition in order to increase global demand. This will make it easier for large corporations than small businesses. However, this does not mean that small players will lose growth opportunities. Global markets will be more competitive if you have quality products and specialize in them.
Drink up, light up, renew your passport. Cannabis is like wine all over the world!
Andrew Kaye is involved in all aspects the financial services industry as an investment banker, fund portfolio manager, family office investor, attorney, and investment banker. He has extensive experience in investing in cannabis and has assisted start-ups with their initial raise. Andrew is currently Sweet Leaf Madison Capital’s Chief Financial Officer. His expertise is used to create middle market financing solutions in the real estate and equipment financing sectors of the cannabis industry .”
Sweet Leaf Madison Capital offers non-dilutive and asset-based lending solutions for the underserved middle markets of the cannabis industry. They originate real estate loans, equipment financing and many other loans for entrepreneurs and businesses. The company is located in Denver, Colorado, and has offices in New York City, West Palm Beach, Florida, and New York City. Sweet Leaf Madison Capital is available online to learn more and complete loan applications. You can also continue the conversation via LinkedIn, Twitter, Facebook, and Facebook.
Andrew J. Kaye serves as Chief Commercial Officer at Sweet Leaf Madison Capital. He can be reached at akaye@sweetleafmadison.com.
The post Members Blog: Wine is the Mentor Cannabis Musts – How The Industry can Mimic Vino for Global Success appeared originally on The National Cannabis Industry Association.
