Green
9 Things Cannabis Investors Should Know
9 Things Cannabis Investors Should Know
The swift regulatory changes taking place in the global cannabis sector are almost without modern precedent.
While some find the situation analogous to the repeal of Prohibition in the United States, it’s also fair to point out that such events happened 85 years ago in the midst of the Great Depression. It was a long time ago, and in a very different economic climate.
Today’s infographic comes to us from Evolve ETFs, and it shows what investors should know as the legal cannabis sector comes out of the dark.
What Cannabis Investors Should Know
Since there is so much happening at once with little precedent for what such a market will look like, it’s worth summing up the sector’s potential in broad strokes:
1. Global Size
According to research from The Brightfield Group, the size of the legal cannabis sector is expected to surge from $7.7 billion to $31.4 billion between 2017 and 2021.
Currently the recreational market makes up only 37% of the global total – but by 2021, that will rise to 57%.
2. Versatile Uses
Cannabis comes in different forms. One gram of dried cannabis is roughly equivalent to:
- 5g of fresh cannabis
- 15g of edible product
- 70g of liquid product
- 0.25g of concentrates
- 1 cannabis plant seed
These can be used in various medical applications, including to fight chronic pain, migraines, anxiety, multiple sclerosis, and nausea. Cannabis can also be used to treat Alzheimer’s, PTSD, and cancer.
3. North American Growth
By 2021, it’s estimated that North American sales will make up 86% of the global market. Specifically, the U.S. legal market is projected to hit $18.1 billion by that time, while the Canadian legal market is expected to be $8.9 billion in that same year.
4. A Shifting Legal Landscape
Canada will be the first G7 country to legalize cannabis at a federal level.
In the United States, recreational cannabis is already legalized in nine states – but this could change swiftly as various states undergo referendums.
5. European Markets
In 2017, the legal market for cannabis is estimated to be just $0.11 billion, but by 2021 it will have expanded to $3.8 billion.
According to The Brightfield Group, growth will be quite impressive in Western Europe: Germany’s market will grow at a 284% annual rate, the Netherlands at 364%, and Spain at 334%.
6. Rest of the World
Although markets outside of North America and Europe will not see the same growth in absolute dollar terms, the legal cannabis market will still expand from $80 million to $350 million, led by activity in Latin America.
7. Pharmaceutical Research
Israel has a special place in the cannabis world – the country is world leader in medical cannabis research, and industry expects that it will eventually translate into a $1 billion export opportunity. That said, export plans have hit a recent road bump.
8. Investment Activity
Compare the start of 2018 to that of 2017, and you’ll see an impressive difference in investment activity.
For this we use Canada with its impending recreational legalization as an example: in the first six weeks of 2018, investment was up nearly 7x over the previous year. Further, the average deal size increased from $5.6 million to $18.7 million.
Meanwhile, the Canadian Cannabis Index rose 201% between January 2017 and January 2018.
9. How to Invest?
There are a variety of ways to gain exposure to the sector, including:
- Licensed producer stocks
- Biotech stocks
- Ancillary services stocks
- Licensed retailer stocks
- Cannabis ETFs
Regardless of how you play it, the legal cannabis sector is coming out of the dark – and it will be interesting to see how the industry takes shape.
Environment
How Carbon Dioxide Removal is Critical to a Net-Zero Future
Here’s how carbon dioxide removal methods could help us meet net-zero targets and and stabilize the climate.
How Carbon Dioxide Removal is Critical to a Net-Zero Future
Meeting the Paris Agreement temperature goals and avoiding the worst consequences of a warming world requires first and foremost emission reductions, but also the ongoing direct removal of CO2 from the atmosphere.
We’ve partnered with Carbon Streaming to take a deep look at carbon dioxide removal methods, and the role that they could play in a net-zero future.
What is Carbon Dioxide Removal?
Carbon Dioxide Removal, or CDR, is the direct removal of CO2 from the atmosphere and its durable storage in geological, terrestrial, or ocean reservoirs, or in products.
And according to the UN Environment Programme, all least-cost pathways to net zero that are consistent with the Paris Agreement have some role for CDR. In a 1.5°C scenario, in addition to emissions reductions, CDR will need to pull an estimated 3.8 GtCO2e p.a. out of the atmosphere by 2035 and 9.2 GtCO2e p.a. by 2050.
The ‘net’ in net zero is an important quantifier here, because there will be some sectors that can’t decarbonize, especially in the near term. This includes things like shipping and concrete production, where there are limited commercially viable alternatives to fossil fuels.
Not All CDR is Created Equal
There are a whole host of proposed ways for removing CO2 from the atmosphere at scale, which can be divided into land-based and novel methods, and each with their own pros and cons.
Land-based methods, like afforestation and reforestation and soil carbon sequestration, tend to be the cheapest options, but don’t tend to store the carbon for very long—just decades to centuries.
In fact, afforestation and reforestation—basically planting lots of trees—is already being done around the world and in 2020, was responsible for removing around 2 GtCO2e. And while it is tempting to think that we can plant our way out of climate change, think that the U.S. would need to plant a forest the size of New Mexico every year to cancel out their emissions.
On the other hand, novel methods like enhanced weathering and direct air carbon capture and storage, because they store carbon in minerals and geological reservoirs, can keep carbon sequestered for tens of thousand years or longer. The trade off is that these methods can be very expensive—between $100-500 and north of $800 per metric ton.
CDR Has a Critical Role to Play
In the end, there is no silver bullet, and given that 2023 was the hottest year on record—1.45°C above pre-industrial levels—it’s likely that many different CDR methods will end up playing a part, depending on local circumstances.
And not just in the drive to net zero, but also in the years after 2050, as we begin to stabilize global average temperatures and gradually return them to pre-industrial norms.
Carbon Streaming uses carbon credit streams to finance CDR projects, such as reforestation and biochar, to accelerate a net-zero future.
Learn more about Carbon Streaming’s CDR projects.
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