Canadian CANNAINVESTOR Magazine July / August 2017 - Page 54

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The distribution framework has been left chiefly with the individual provinces and territories to develop including any provincial/municipal laws, levies, and taxation. At this early stage, some provinces appear to prefer a private dispensary system for distribution whereas at least one seems to favour a provincially owned and operated monopoly to govern distribution. Other provinces have surveyed their population for input as they formulate their own models. In other words, think of the alcohol distribution systems in each Province and Territory and parallel that to this industry but with further restrictions and regulations. Notwithstanding what each Province, Territory and Municipality within may do, there is currently the possibility that the Federal Government itself may allow for a common distribution system in the form of direct mail until each province is “ready”’. The good news is that on June 20, much of this uncertainty was removed as the Federal Government announced that direct mail will be allowed to distribute to those provinces that have not yet established their framework.

Add to the above, the deliberate misleading guidance by some that suggest any current illegal distribution system is actually operating in a grey market and should be grandfathered as should any person affiliated or associated with this market (ie: pardons and amnesty). At this time that they are operating outside of the law and outside of the proposed legal framework for the adult recreational market. Others point to the fact that in some provinces where organized crime have created an effective low cost market where one can allegedly send a text and their recreational supply arrives at their door in minutes that a legal framework will be unable to compete. It may take years. It will take commitment. It will take law enforcement and the courts to have the fortitude to enforce and uphold the law.

This is an investment magazine and where in the Canada dispensaries are legal, we will be discussing them and how one can invest. We cannot stray too much into the realm of the black market other than to acknowledge it exists and will be in direct competition with the legal market. Safe, reliable, and consistent legal product at a good price will win out over time for the vast majority of the market. A black market exists now in almost any industry – cash deals to avoid paying taxes, illegal cigarettes, gaming, and alcohol to just name a few. A risk to investors is who to trust for information and that has been cornerstone to these pages since April 2016 when we launched the first edition in the US. A recent example was an article with respect to the Canadian industry. The author shows a concern for the future of the industry and therefore by extension for those investing in it. One company, by name, should survive whereas another large existing company, again by name, is likely to be acquired.