Amidst the seemingly endless headlines about Brexit, one story isn’t getting enough attention from investors. Controversial new UK Prime Minister Boris Johnston has already appointed two senior aides who support cannabis legalization in the United Kingdom.
One of the aides, Blair Gibbs, formerly led policy at the Centre for Medicinal Cannabis, an organization in the UK’s cannabis-based medicinal product industry. On Twitter, Gibbs has praised Canada for legalizing marijuana “in a modern yet responsible way.”
This news comes just days after a group of cross-party MPs, returning from Canada to study the legal weed market, said they expect cannabis legalization to come to the UK “within years.”
Canada is proving to be a shining example to other countries as they liberalize their laws regarding marijuana. Accordingly, it will be Canadian companies that benefit from international cannabis legalization, particularly in the UK. This is because a number of them are already profiting from the medicinal cannabis market there, and are well-positioned to do the same with the legal market.
Tilray is in the Best Position to Benefit from UK Cannabis Legalization
Last November, the UK government allowed specialist doctors to begin prescribing medical marijuana for patients who show a severe clinical need.
At the end of June, Nanaimo-based Tilray Inc (NASDAQ:TLRY) imported its first bulk supply of medical cannabis oil into the UK. Before the end of the year, the company is also hoping to import bulk supplies of five more medical cannabis products into the country.
Tilray VP Catherine Jacobson told the Financial Post that the November 2018 decision “allows us to hold a reliable supply in the UK so we can avoid having to import on a per-patient basis, shortening the amount of time from prescription to the patient getting the product.”
This streamlines Tilray’s ability to supply recreational cannabis to the country once cannabis legalization takes hold.
Also, just last month, Tilray acquired UK-based boozy candy company, Smith & Sinclair. It plans to leverage the company’s expertise to produce CBD-infused edibles in time for them to be legally permissible in Canada. But if cannabis legalization in the UK allows the sale of pot-infused edibles, the acquisition will certainly give Tilray a big jump start on that market as well.
Canopy and Aurora Also Stand to Profit
Competing with Tilray, Aurora Cannabis Inc. (TSX:ACB) (NYSE:ACB) also has a foot in the door for cannabis legalization in the UK. In February, the company completed its first commercial export of cannabis oil to UK pharmacies.
“Being one of the first Canadian companies to commercially supply cannabis-based medicines into the UK under the new legal framework reflects Aurora’s ability to do business in international markets that have complex and evolving regulatory systems,” said Neil Belot, the company’s Chief Global Business Development Officer, in a press release.
Canopy Growth Corporation (TSX:WEED) (NYSE:CGC) also entered the UK medical cannabis market in the first quarter of 2019. Through its UK-based subsidiary, Spectrum Biomedical, Canopy will be able to distribute its medicinal products throughout the region. It also plans to begin testing the effectiveness of cannabis for pain relief of cancer patients in the UK.
While it might still be half a decade or more until full cannabis legalization comes to the UK, Tilray, Aurora Cannabis, and Canopy Growth are the companies currently poised to capture the market once it does.
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