Back in September, Niagara College in Canada introduced a new course to their curriculum.
Classrooms for this new program look quite different from the norm.
To access their class, students need to go through a security fence…and two more security doors. At each point students need to swipe their ID cards and punch in their access code.
Once they are in the classroom, all their movements are tracked and recorded by cameras.
What’s with all the security?
Well, the college wants to imitate the same working conditions students will face once they start working in their industry.
You see, students are part of the Commercial Cannabis Production program, where they learn all about growing cannabis crops, quality assurance and following regulations.
Canada started sales on legal marijuana in October this year, and the industry is desperate for trained professionals.
The program co-ordinator, Bill Macdonald, told City News Toronto the industry approached the college. As he said:
‘It’s a plant but it’s a very unique plant and we [the industry] need professionals to work in it. Especially now that licensed producers are scaling up to upwards a million square feet.
‘So you need a lot of expertise and you need a lot of science and that’s where we fit in perfectly.’
That’s why the college came up with the first commercial cannabis production program in Canada.
Canada was the first G7 country to legalise cannabis, but more countries could be joining its ranks, like New Zealand.
New Zealand is looking to have a referendum on personal marijuana use in 2020…and the results will be binding. This announcement comes after New Zealand decriminalised cannabis for medical use.
And it could very well pass. A poll from the National Organisation for the Reform of Marijuana Laws (NORML) last year showed that 65% of the population support legalising or decriminalising for personal possession, and 78% for pain relief.
Society is changing the way they view cannabis, and it is creating a whole new industry from scratch.
Cannabis investing is a speculative play. Yet while usually in a recession speculative plays don’t do well because money is scarce, we think cannabis could be different.
Why could cannabis be recession proof?
Well, for one cannabis is a growing industry which will bring in more jobs and tax dollars to the government. And this is attractive during a recession.
It is already becoming a significant market in Canada. According to Deloitte, the total illegal and legal recreational market in Canada is expected to generate up to CAN$7.17 billion in sales in 2019, with legal sales being more than half of this total.
As you can see below, consumers see compelling reasons to switch to the legal economy:
The cannabis industry is only starting, and it is developing and growing. Even if we saw a drop in the industry during a recession, it is not fully developed, so it has room for more growth in the future.
Also, cannabis has a large medicinal component, and even in a recession people will not cut spending on medicines.
Another factor is that during a recession people have less disposable income for entertainment. And while it is true that usually in a crisis traditional beer and tobacco sales seem to decrease, it is also true that people do more entertaining at home.
Consumers will look for products that will give them a different experience at home.
That’s why we saw the craft beer industry explode in recent years, even in the aftermath of the 2008 crisis.
Breweries can change the conditions on how the beer is produced, which will vary the taste, and provide the user with very different flavours and experiences.
We could see a similar situation unfolding with cannabis. We could even see craft beer and cannabis industries join forces, which could help growth. Something like what the state of Colorado in the US is seeing.
Or even the beginning of ‘craft weed’. This is something Concordia University law professor Ryan Stoa wrote about in his book Craft Weed: Family Farming and the Future of the Marijuana Industry.
As he told The Verge:
‘Just like in the beer market, you have the microbrews living alongside a thriving and growing craft beer market. […]
‘[T]he cannabis plant is capable of a remarkable amount of genetic variation. We think of it as one generic product, but that’s not the case. There have been incredible amounts of different cannabis plants, and each strain may have different characteristics for the consumer, each strain requires its own care-taking method for the farmer. […]
‘[T]here’s a lot of interest among both the marijuana farming community and the consumer base to see locally made or locally produced artisanal products.’
Obviously, price will be a big factor.
Cannabis has some costs. There is land, security, electricity, technicians, taxes, you name it.
But, the cannabis sector is also wide open.
There’s the medicinal, but also edible, infused products…
This is a growing trend that could keep expanding in spite of economic turmoil.
Editor, Markets & Money
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