Canada “blew it” on cannabis legalization and is rapidly losing ground to the United States as a result, according to the founder of one of the top investment bankers to the industry.
A lack of policy innovation, a messy patchwork of provincial regulations, and severe restrictions on marketing and branding have left Canadian pot companies eating the Americans’ dust, according to Neil Selfe, founder and chief executive officer of Infor Financial Group Inc.
“I think we had a real chance to be global leaders,” Selfe said in an interview at Bloomberg’s Toronto office. Yet eight months after Canada legalized recreational cannabis, Selfe sees Canopy Growth Corp. as the only Canadian pot company he would classify as a global leader, with big US-focused firms outpacing the rest even though marijuana is still illegal at the federal level.
“It’s a real consumer product in big US states where it’s legal, and it isn’t that way yet in Canada despite the fact that we were first,” he said.
States like California sell multiple products, have well-known brands, and even allow home delivery, but Canada’s market is restricted to dried flower and oils and branding essentially “doesn’t exist,” Selfe said.
“It’s almost like you’re buying something dirty in brown paper bags,” he said. “It’s like liquor in the ’60s.”
The non-intoxicating cannabis compound CBD is a case in point. Even though marijuana is still classified alongside heroin as one of the most harmful drugs in the United States, the federal government legalized hemp-derived CBD in December. Big US retailers like CVS Health Corp. and Walgreens Boots Alliance Inc. already sell CBD products like lotions and topicals but those aren’t yet legal in Canada. Legal CBD products such as oil and dried flower can only be sold in dispensaries.
“It’s a mess,” Selfe said.