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Marijuana Stocks Hope This Will Make Their Shareholders Rich

By Dan Caplinger – Sep 22, 2018 at 9:16AM

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Advocacy for the cause has paid dividends already and will continue to do so.

Investors always like winning stocks, and over the past month, the most fertile ground for big winners has come from the marijuana industry. The onset of legal sales of recreational marijuana in Canada, a growing trend toward legalization in the U.S. and elsewhere across the globe, and the rising interest in marijuana producers from established players in related consumer industries like the soft-drink and spirits industries have all helped to feed speculative fire on just how high share prices can climb.

One thing that Canada's marijuana producers realized early on was that there could be substantial benefits to establishing a trade organization to advocate for the industry's joint interests. Initially, several organizations fought on behalf of various segments of the marijuana industry. But earlier this year, several of those groups came together and combined into one new entity. This group, known as the Cannabis Council of Canada, is now working hard to push for the pot industry's best interests, both to encourage more freedom in selling cannabis products and to fight against regulations that would restrict their ability to succeed financially.

Marijuana in raw and rolled form in front of a Canadian flag.

Image source: Getty Images.

What is the Cannabis Council of Canada?

The Cannabis Council of Canada formed in April 2018. Canopy Growth (CGC -2.76%) joined forces with two other groups, the Cannabis Canada Association and the Canadian Medical Cannabis Council, to create the new entity.

Among its initial board of directors were the following industry executives:

  • Avtar Dhillon, executive chair of the board of Emerald Health Therapeutics (EMHT.F)
  • John Fowler, CEO of Supreme Cannabis (SPRWF)
  • Philippe Lucas, VP of patient research and access, Tilray (TLRY)
  • Cam Battley, chief corporate officer, Aurora Cannabis (ACB -3.23%)
  • Alison Gordon, CEO of 48North Cannabis
  • Jeff Jacobson, VP of business development, Cronos Group (CRON -1.56%)
  • Darren Karasiuk, senior VP of recreational division, MedReleaf
  • Megan McCrae, marketing director, Aphria (NASDAQOTH: APHQF)
  • Jeff Ryan, VP of government and stakeholder relations, Canopy Growth
  • John Stewart, president of Emblem Medical division, Emblem Cannabis
  • Sebastien St-Louis, co-founder and CEO, HEXO
  • Neil Closner, former CEO, MedReleaf

These members of the Cannabis Council of Canada board appointed Allan Rewak as its executive director. Rewak had a long history with performance media industry company Pathway Group before becoming interested in the cannabis industry and working for various companies and trade groups.

What Cannabis Council of Canada wants to do

Cannabis Council of Canada has ambitious goals. As board chair Dhillon notes, "Together we will realize our shared goals of ensuring fair access for patients, successful and comprehensive legalization of adult use, building a robust legal and regulated industry, and keeping cannabis away from underage youth."

From the viewpoint of investors, Cannabis Council of Canada sees great benefits in having marijuana producers gather together to advocate for their common interests. In the words of Tilray's Philippe Lucas, "The unification of Canada's cannabis industry into one organization will streamline and strengthen our ability to advocate on behalf of our members, patients and stakeholders, and to work effectively with all levels of government."

In particular, Cannabis Council of Canada sees itself being a valuable resource for medical and recreational marijuana. As the cannabis industry evolves, the group will promote industry standards while being available to policymakers to ensure safe and responsible use of cannabis products for all uses.

Why shareholders can win

Already, Cannabis Council of Canada is making its presence known. Even as regulators at Health Canada have sought to impose an excise tax on the revenues of various companies involved in marijuana-related activities, the trade group has lobbied against the immediate imposition of the tax. Instead, it favors a wait-and-see approach that will ensure fair collection of taxes to cover the costs of regulation but without putting an undue burden on upstart cannabis producers just as recreational use in Canada begins taking off.

Trade associations aren't always at the forefront of big industries, but for marijuana stocks, having a united voice at this critical time could be a big boon. For those who invest their money in cannabis stocks, what Cannabis Council of Canada does on their behalf could end up being instrumental if the industry can live up to its full potential.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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