The marijuana industry has rapidly increased in propensity toward the future for some time now but recent updates to legislation and the changing political climate of the industry have left two distinct sides of the market when looking at the pure-play cannabis growth companies. Within marijuana production lies both the big cannabis producers and the smaller, more craft-oriented producers of marijuana. Many stocks in the larger end of the market have been moving forward with new capital brought on by the listing on such exchanges as the NASDAQ and NYSE, but capital has been harder to come by for some of the smaller businesses.
The investment of almost $4 billion by Constellation Brands into Canopy Growth helped to signal a complete paradigm shift in the path of the market. This represented the first time that a company as large as Constellation saw promise in the cannabis market. Not that it didn’t exist before, but for some time many companies in the marijuana space had been viewed as too taboo to invest in. This in combination with the difficult legislative status of the market, left many companies wondering what to do next. Many of the big wigs in the stock market have since that point, viewed cannabis as an extremely bullish market, and this sentiment only looks to move forward as time goes on.
Canada made the next big step in the market after legalizing the substance on a nationwide level, going into effect a little over a month ago on October 17th. This again helped to redefine the path of marijuana and what it could be as an industry and on the individual level. The smaller companies in the cannabis market have been working on the craft model of business by producing the highest quality cannabis they can and working within a higher tier of customers. These growers have been highly oriented in the indoor, hydroponic field as it has become one of the most repeatable ways to produce high-quality cannabis. Although this seems like a solid option, many of the smaller companies have been working to compete with some of the larger guys in the industry. Herein lies the issue with that model. The smaller businesses should, in turn, be focused on reaching a different side of the industry, rather than working to compete with producers making cannabis on an extremely high scale. It seems as though there is room for both sides of the market, but again this is solely up to the consumer in the end.
The smaller companies, however, have shown to have some advantage over the big wigs when it comes to legal matters. Much of the federal work by the U.S. and Canada have been aimed at the large producers of marijuana and not so much on the smaller side of the industry. This means that the little guys may have an advantage for now, but in the end, the legal standing of cannabis will reign supreme throughout the industry. The hopes are high that these legislative issues can begin to pan out in the favor of cannabis so that the market can continue to move toward its future goals in the coming years.
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