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.
Charted: U.S. Egg Prices More Than Double in 2022
This chart shows the increase in the national average price of a dozen Grade A eggs in the U.S. in 2022.
Charted: U.S. Egg Prices Double in 2022
Eggs are a staple food for many countries around the world, and the U.S. is no exception. Americans eat between 250‒280 eggs a year on average.
Eggs are also easy to cook, protein-dense and supply many daily vitamins needed for healthy living, making them a popular meal or ingredient. So when egg prices rise, people notice.
MetalytIQ charted the rapid rise of egg prices in the U.S. during 2022, using data from the U.S. Bureau of Labor and Statistics (BLS).
Over the course of 12 months, the national average price for a dozen large Grade A eggs more than doubled, to $4.25 in December from $1.93 in January.
|Egg Prices Per Month (2022)||Price per dozen|
The biggest culprit has been an avian flu outbreak that resulted in 43 million chickens culled to prevent the spread of the disease.
This led to a severe shortfall in egg supply. Egg inventories in December had fallen by one-third compared to January. Combined with increasing demand during the holiday season, prices skyrocketed and empty shelves became apparent in some states.
This is not the first time avian flu has disrupted the industry.. In 2015, a similar outbreak pushed egg prices up 40% in nine months, reaching a high of $2.97 per dozen eggs in September 2015.
Will Egg Prices Drop in 2023?
Avian flu isn’t the only storm the egg industry has been facing in 2022.
In the near-term, egg prices are expected to remain high. Containing the avian flu outbreak will remain the biggest factor in determining the prices, but as suppliers increase production, prices may cool off a little in 2023.
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