This is shaping up to be a truly incredible year for the legal cannabis industry.
Just over a month ago, Canada made history by passing the Cannabis Act. In doing so, it becomes the first industrialized nation in the world (and only the second country overall, behind Uruguay) to have passed legislation allowing adults to purchase marijuana. When the green flag waves on Oct. 17, it'll open the door to perhaps $5 billion in added annual sales, once the industry is fully ramped up.
Aside from Canada's game-changing news, we've also witnessed eye-opening expansion in the United States. In January, Vermont became the first state to OK use of recreational cannabis entirely through the legislative process (i.e., without putting it to a vote by residents of the state). Meanwhile, red-leaning Oklahoma handily passed legislation recently that legalized medical marijuana.
This changing perception toward cannabis has been apparent practically everywhere you look. Within the U.S., Gallup's October 2017 survey found that 64% of respondents want to see weed legalized nationally. Comparatively, only 25% of respondents felt this way in Gallup's 1995 poll. Still, just two countries globally have legalized adult-use weed.
A survey by Quinnipiac University in April 2018 found overwhelming support in the U.S. for medical cannabis legalization, with 93% approval. Yet, in spite of this support, the U.S. government hasn't rescheduled or descheduled the drug. Instead, it's been kept on par with LSD and heroin as a schedule I substance.
Where in the world is medical marijuana legal?
However, that hasn't stopped a growing number of nations from approving medical marijuana. There are 30 countries that have given the green light to medical cannabis in some capacity, as well as a small handful of others that allow medical weed use within very strict guidelines, such as in the form of cannabis-derived pharmaceuticals. In alphabetical order, here are those 30 countries with medically legal marijuana:
Europe is a leader in medical cannabis progressivism
What you'll likely notice is that Europe is among the most progressive with medical cannabis. The Netherlands, Poland, Romania, Norway, Germany, Italy, Greece, and so on have all legalized access for medical patients. And in other European markets where smoking cannabis isn't legal, such as France, Spain, and Slovenia, the use of cannabis-derived drugs for select ailments is permitted.
Europe also happens to be a key market for Canada. On top of supplying what could be about 1 million kilograms of domestic demand, Canadian growers plan to export what should be well over 1 million kilograms of domestic oversupply by 2020 to foreign markets where medical weed is legal. Many of these European markets, like Germany, have very little in the way of domestic grow farms, meaning they'll be almost entirely reliant on cannabis imports for the foreseeable future.
Canada is among just a very small handful of countries (along with the Netherlands and, soon, Australia and Israel) that are allowed to export medical marijuana. Aurora Cannabis (ACB -4.51%), the Canadian grower expected to produce more weed annually than its competitors (570,000 kilograms), assuming its buyout of MedReleaf is completed, is going all-in on the global medical market.
For example, Aurora Cannabis announced in early January that it was partnering with Alfred Pedersen & Son in Denmark to produce up to 120,000 kilograms of cannabis a year. By retrofitting tomato- and pepper-producing greenhouses to grow cannabis, the Aurora Nordic project should be able to save on costs and reach the Scandinavian markets with ease.
The next hot market is...
Perhaps the biggest surprise is where some of the next medical pot legalizations could come from: Africa.
According to a UN survey, per CNN, over 10,000 tons of cannabis are produced on the African continent each year. Assuming even a reasonable fraction of this production and demand can be moved to legal channels, it could be one heck of a game-changer for the legal weed movement.
In May, Zimbabwe legalized cannabis for scientific and medical use, with an approved license. Previously, possessing or growing marijuana could have led to a hefty 12-year jail sentence. Similarly, Lesotho began approving medical-marijuana grow licenses last year.
CNN also lists Morocco as a potential beneficiary should legalization come to fruition. Next to Afghanistan, Morocco is the second-largest producer of cannabis in the world. Religious opposition within the country may be difficult to overcome, but the country's cash crop could mean big bucks and jobs for Morocco's economy.
Though it could still be a few years before African governments work out their cannabis policies, some of Canada's biggest names are beginning to leave their mark on African soil.
In late May, Aphria (NASDAQOTH: APHQF) announced that it was forming a new venture known as CannInvest Africa that's designed to supply cannabis extracts to legalized African countries, as well as the one dozen countries currently in Aphria's supply network. This venture came about from a roughly $3 million investment with the Verve Group of Companies. Aphria's management team fully understands the need to broaden the company's horizons to sell what could be a lot of excess cannabis in Canada's domestic market.
Also in late May, Canopy Growth Corporation (CGC -1.26%) announced the acquisition of Daddy Cann Lesotho for what amounts to 28.8 million Canadian dollars ($21.8 million). Given Lesotho's top-notch growing climate, along with being the first African nation to regulate medical cannabis, Canopy Growth believes it can be a staging ground for growth and distribution. It also marks the fifth continent that Canopy Growth has operations on.
The takeaway here is simple: Medical cannabis will likely continue to expand in the months and years ahead. Investors should expect this list of legalized countries -- along with interest from Canadian growers in newly legal markets -- to grow.