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The Biotech-Cannabis Connection
The biotech sector will be one of the greatest beneficiaries of the legal cannabis movement and we expect this market to see incremental growth over the next decade. The cannabis industry is at a turning point and after spending several years researching cannabis and developing products, companies are beginning to realize the fruits of their efforts.
The cannabis-biotech opportunity is comprised of some of the best capitalized and most mature public companies and we have identified three firms for investors to monitor.
Although the United States marijuana market is attractive, companies that touch the actual plant are under the microscope.
Although recent studies have shown that marijuana has medical benefits, it is still illegal at the Federal level and the new White House administration has not made the situation any easier.
Banks have been closing marijuana accounts left and right, and companies that touch the plant are having trouble depositing their cash. When it comes to publicly traded marijuana companies based in the United States, we prefer companies that do not touch the plant.
Canadian licensed medical marijuana producers have raised more than $1 billion ahead of the opening of the proposed legal recreational market (expected by July 2018).
Some of the larger producers have used the funds for acquisitions and for entering new international markets, while most have used them to increase production capacity to capitalize on an expected increase in demand when the recreational market opens.
Over the last week, Canadian licensed medical marijuana producers have rallied off its July lows and we are keeping a close eye on this turnaround.