Canada entrepreneurs biggest winners in Cannabis Act
Besides recreational aficionados, the biggest beneficiaries in Canada’s decision this week to legalize cannabis will be its entrepreneurs.
Unlike Uruguay, which was the first country to legalize marijuana in 2013, Canada is uniquely positioned to cultivate a first-mover advantage in the cannabis industry with its entrepreneurial climate and status as a G7 nation.
Over the past couple of years, some of Canada’s best and brightest have ditched regular career paths to position themselves at the helm of start-ups poised to take advantage of explosive growth in what has already become a multi-billion dollar industry. The pot industry in its current form may have taken $9 billion in sales in 2017, according to BDS Analytics. And like most of the world’s most advanced nations, Canada serves as a magnet for the world’s best and brightest to work at the cutting edge of innovation, especially in new and high growth industries.
One such company at the cutting edge of this step change is Vancouver-based Global Cannabis Applications Corp. (CSE: APP | OTCQB: FUAPF) (GCAC). The company is building an online platform to handle data on cannabis using 21st century technology like artificial intelligence (AI), blockchain and digital reward tokens to glean insights into the behaviour of cannabis users. The company is an assembly of sector experts from all corners of the globe.
“We have an incredible team of 30+ people spread around the world, in the coming months GCAC will continue to grow, expand and improve to become the dominant brand in all things medical cannabis,” CEO Brad Moore said recently.
Like most new industries, first movers get to build brand recognition and trust among consumers. In the case of GCAC, the company is building a constituency of users around its Citizen Green Community, which already has thousands of users. AI technology scrapes data from clinical trials, studies, and anecdotal inputs from cannabis users in GCAC’s model.
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The passing of Bill C-45, dubbed the Cannabis Act, helps GCAC in numerous ways. It will end a government stranglehold on data on surrounding cannabis use in Canada, ultimately strengthening GCAC’s model by aggregating more information from a wider array of sources. And more users will go online knowing the smoking marijuana is now a legalized activity, creating more data and a greater need for an information hub.
Of GCAC’s business model, Moore said that “this thing aggregates value by people pressing buttons.”
This is the kind of head start that is difficult for replicate when other G7 nations decide to legalize. In the United States, while 9 states and the District of Columbia now allow for recreational marijuana use (and 30 for medical purposes), it is still outlawed at federal level. The White House has suggested that the Department of Justice will do more to prohibit recreational use, raising concerns how Canada will coexist with a US crackdown.
GCAC will benefit from collecting data from retail outlets authorized to sell in Canada. In Alberta, recreational weed will be widely available at more than 200 private retailers across the province. On the opposite end of the spectrum, marijuana availability will only be provided in 40 state-run shops in Ontario. In Newfoundland and Labrador, it will be available in Loblaws grocery stores.
It’s the same process that the alcohol industry went through, all the way from moonshine outposts during the Prohibition Era to sophisticated rankings used by Wine Spectator for Burgundy vintages or Beer Advocate’s ranking for craft brews in 2018.
Matt Craze works with New York-based management consultancy 10EQS and is the founder of Spheric Research, a firm dedicated to global seafood industry research. Matt ... <Read more about Matt Craze>