A Generational Investment Opportunity THE CANADIAN ... · Marijuana is produced from the flower and leaves of cannabis plants, which ... even outdoors.4 The key difference between

A Generational Investment Opportunity THE CANADIAN CANNABIS STORY

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A Generational Investment Opportunity THE CANADIAN CANNABIS STORY

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TABLE OF CONTENTS

The Canadian Cannabis Story: A Generational Investment Opportunity

Cannabis: A Brief History

The Many Forms of CannabisAn Increase in Legal Cannabis-based ProductsMedical UseCannabis as an Opiod Alternative

Cannabis and Canada: A Strong Growth Story

A Global Cannabis Boom: The Next Stage

Canadian Cannabis Stocks - An Investment Opportunity to Consider

Endnotes

By Echelon Wealth Partners

THE CANADIAN CANNABIS STORY:

A GENERATIONAL INVESTMENT OPPORTUNITY

The Canadian Cannabis Story:A Generational Investment Opportunity


The Canadian Cannabis Story aims to provide readers with a comprehensive look at the cannabis market in Canada through its history, growth, and various production sectors to illuminate the investment opportunity this sector will afford in a rapidly growing global market.

The increasing trend in cannabis decriminalization and legalization, both in North America and around the world, has awakened the interest of the investment community. The unique and potential medicinal properties of cannabis and its versatility for other commercial uses are considered the harbingers of an investment with significant growth potential.

Canada legalized marijuana for recreational use on

October 17, 2018

CANNABIS

Marijuana is produced from the flower and leaves of cannabis plants, which grow naturally in humid temperate conditions on all continents.1 The two most important varieties of the cannabis plant are sativa and indica, with hemp being a specific species of the sativa plant.

The first documented use of cannabis as a medicine and textile fibre dates back to China in 4000 B.C.2 The use of cannabis as a recreational drug (both in its herbal form, known as marijuana, and in its resin form, known as hashish) dates back to Persia in the seventh century.3 Use of cannabis for the production of textiles, pharmaceuticals, oil, and paper remained popular in the United States and Europe up to the 19th century. A prohibitionist trend began in the 20th century as more countries increasingly began to view cannabis use as a threat to social cohesion and some economic sectors. A ban in Greece in 1890 was followed by others in France (1916), Canada (1923), Great Britain (1928), and Australia (1938). Various U.S. states made recreational use illegal between 1915 and 1930 (among them Massachusetts in 1911 and California in 1915), with a federal ban eventually coming into force in 1937.

Today, Canada’s licensed cannabis producers grow cannabis in indoor facilities, greenhouses and recently, even outdoors.4 The key difference between the two relates to climate control and the associated costs. Indoor facilities typically allow the producer to exercise more control over the growing conditions, but this often (though not always) translates into higher costs. Greenhouses have the benefit of lower costs for lighting but are then more dependent on local weather conditions, and the amount of sunlight in particular. There is still much debate as to which method is more profitable, but we have noticed that several cannabis companies that began their lives as indoor producers have expanded into greenhouse production.5

A Brief History




THE MANY FORMS OF CANNABIS


Once cannabis has been grown and harvested, it can be sold as ‘dried cannabis’ that consumers can either smoke or vape. Alternatively, it can be further processed into cannabis extract that can be used as the primary ingredient in making a host of other products. The industry is continuing to develop and commercialize more products that use cannabis as a major ingredient, with the federal government committed to broadening the field of legal products, including the addition of edibles (e.g., brownies, cookies, and gummies) and beverages within a year of the legalization of recreational use.

The number one reason that physicians currently prescribe cannabis is for pain management.6 Other major uses include managing nausea (e.g., patients undergoing chemotherapy), anorexia, and post-traumatic stress disorder (PTSD).

The popularity of cannabis-based pharmaceuticals in the 19th and 20th centuries was a result of the many medical properties attributed to it, especially as a remedy for pain, insomnia, and headaches. The status of cannabis as a Schedule I substance, which is defined as having no therapeutic value and having a high potential for abuse, by the Federal government in 1970, has severely limited scientific research efforts.7 Some studies have nevertheless indicated potential benefits through the years:

• Cannabis can treat glaucoma by lowering intra-ocular pressure;8

• Smoking cannabis may improve lung capacity and functioning;9 • Cannabis can help eliminate epileptic seizures;10

• Cannabidiol (CBD), an active chemical in cannabis, may stop the

reproduction and spread of cancer cells;11

• Cannabis can be helpful in reducing the symptoms of anxiety;12

An Increase in Legal Cannabis-based Products

Medical Use

• Delta-9 Tetrahydrocannabinol (THC), the psycho-active chemical in cannabis, may slow the progression of Alzheimer’s disease;13

• Cannabis may ease the symptoms and pain

associated with arteriosclerosis;14

• Cannabis reduces muscle spasms, including

diaphragm spasms;15

• Cannabis reduces the side effects and improves the effectiveness of Hepatitis-C treatment;16

• THC and CBD can improve stomach function and

reduce the symptoms of Crohn’s disease;17

• Cannabis alleviates the pain and decreases the

inflammation associated with rheumatoid arthritis;18

• Cannabis may improve metabolic rate and insulin

levels, aiding fat loss;19

• Cannabis may reduce the symptoms of auto-immune diseases.20

By the 1970s, a movement to reintroduce cannabis use for medical purposes, supported by patients and medical professionals, began to take hold in the U.S. In 1996 California was the first state to legalize medical cannabis as a painkiller for cancer and AIDS. Alaska, Oregon, and Washington followed suit in 1998. A further 13 states enacted similar

legislation between 1999 and 2011. The move-ment continued to grow, gaining particular momentum in the last five years. In 2012 Colorado and Washington both legalized recreational use, followed by Alaska, Oregon, and Washington D.C. in 2013. A further seven states legalized recre-ational use between 2013 and 2017, in addition to 11 states permitting medical cannabis during the same period.21

As of June 30, 2018, over 330,758 Canadians had registered with Health Canada as users of canna-bis for medical purposes.21 That number has grown dramatically over the past three years, and recent data suggests another 10,000+ new patients are registering each month.

The number one reason that physicians currently prescribe cannabis is for pain management.6 Other major uses include managing nausea (e.g., patients undergoing chemotherapy), anorexia, and post-traumatic stress disorder (PTSD).

The popularity of cannabis-based pharmaceuticals in the 19th and 20th centuries was a result of the many medical properties attributed to it, especially as a remedy for pain, insomnia, and headaches. The status of cannabis as a Schedule I substance, which is defined as having no therapeutic value and having a high potential for abuse, by the Federal government in 1970, has severely limited scientific research efforts.7 Some studies have nevertheless indicated potential benefits through the years:

• Cannabis can treat glaucoma by lowering intra-ocular pressure;8

• Smoking cannabis may improve lung capacity and functioning;9 • Cannabis can help eliminate epileptic seizures;10

• Cannabidiol (CBD), an active chemical in cannabis, may stop the

reproduction and spread of cancer cells;11

• Cannabis can be helpful in reducing the symptoms of anxiety;12



• Delta-9 Tetrahydrocannabinol (THC), the psycho-active chemical in cannabis, may slow the progression of Alzheimer’s disease;13

• Cannabis may ease the symptoms and pain

associated with arteriosclerosis;14

• Cannabis reduces muscle spasms, including

diaphragm spasms;15

• Cannabis reduces the side effects and improves the effectiveness of Hepatitis-C treatment;16

• THC and CBD can improve stomach function and

reduce the symptoms of Crohn’s disease;17

• Cannabis alleviates the pain and decreases the

inflammation associated with rheumatoid arthritis;18

• Cannabis may improve metabolic rate and insulin

levels, aiding fat loss;19

• Cannabis may reduce the symptoms of auto-immune diseases.20

By the 1970s, a movement to reintroduce cannabis use for medical purposes, supported by patients and medical professionals, began to take hold in the U.S. In 1996 California was the first state to legalize medical cannabis as a painkiller for cancer and AIDS. Alaska, Oregon, and Washington followed suit in 1998. A further 13 states enacted similar

legislation between 1999 and 2011. The move-ment continued to grow, gaining particular momentum in the last five years. In 2012 Colorado and Washington both legalized recreational use, followed by Alaska, Oregon, and Washington D.C. in 2013. A further seven states legalized recre-ational use between 2013 and 2017, in addition to 11 states permitting medical cannabis during the same period.21

As of June 30, 2018, over 330,758 Canadians had registered with Health Canada as users of canna-bis for medical purposes.21 That number has grown dramatically over the past three years, and recent data suggests another 10,000+ new patients are registering each month.

IS THE ANNUAL COMPOUND GROWTH IN CANADIAN USERS OF MEDICAL MARIJUANA FROM 2014 TO 2018.


While the number of patients registered with Health Canada is climbing quickly, only 10,433 healthcare practitioners have ever formally recommended that patients use cannabis.23 Under the pre-legalization regulations, only physicians, as well as nurse practitioners operating in areas where supporting cannabis is permitted under their scope of practice, could formally recommend that patients use cannabis. According to the Canadian Medical Association, there were over 83,000 physicians in Canada, as of January 2017.24

So less than 13% of physicians in Canada had formally recommended that their patients use cannabis (for the sake of simplicity, we have excluded nurse practitioners from that estimate). Why is that?

We believe there are two key reasons: product availability and research.

• Product Availability Until 2015, the only cannabis legally available for sale was in dried form. In


CANADIAN MEDICAL CANNABIS TOTAL REGISTERED USERS

Source: Health Canada

Q214

7,914 15,54550,000

100,000

150,000

200,000

250,000

300,000

23,93039,668

75,166

Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218

98,460

129,876

167,754

201,398

235,621

269,502

296,702

330,758

other words, the only legal way to use cannabis was to smoke or vape it. This was likely, and understandably, a deal breaker for many physicians. In 2015, cannabis oil products were legalized, and there are now a number of products that allow patients to consume cannabis without having to smoke it. Oil products now represent more than 50% of all legal sales volumes, so it looks like product availability is improving in a way that should gain support with healthcare practitioners.

• Medical Research While the body of evidence supporting medical cannabis use is growing, research into the potential uses and side effects of cannabis is quite limited relative to many traditional therapeutic approaches. To some extent, this problem has been self-reinforcing. Research has been limited partly because cannabis was generally illegal, and cannabis remained illegal in part because it was misunderstood due to a lack of research. We believe more research is coming, but it will take time to complete and disseminate.



There is growing recognition that traditional tools such as opioids, which include prescription pain relievers, heroin, and fentanyl have negative side effects that may outweigh their benefits. As noted by Health Canada, in describing what it has called the opioid crisis, “…problematic use may lead to a substance use disorder, overdose and death.”25

According to the Canadian Institute for Health Information, 21.5 million prescriptions for opioids were dispensed in 2016.26 Canada is the 2nd largest per capita consumer of opioids in the world, after the United States.27

Cannabis contains over 100 chemical compounds called cannabinoids. Each strain of cannabis plant has different levels of distinct cannabinoids. The two ingredients that people currently focus on with respect to cannabis are:

• THC (or delta-9-tetrahydrocannabinol) When people think of ‘the high’ associated with cannabis, this is the compound primarily responsible for it.

• CBD (or cannabidiol) CBD has potential medical uses, but it does not cause ‘the high’, and it may, in fact, help moderate ‘the high’ that THC can cause.

The human body has a network of cannabinoid receptors, collectively called the endocannabinoid system. When THC, CBD, and other cannabinoids come into contact with these receptors, chemical reactions occur that can influence many parts of the body, including the way our brains work, the way our nerves work, as well as metabolism, heart and immune system functions.

A large number of potential applications for medical marijuana are currently being investigated. For example, one company is working to develop a drug that uses CBD to control rare forms of epilepsy.

Cannabis as an Opiod Alternative

Chronic Pain 79%Neuropathic Pain 79%

Cancer-Related Pain 69%Pallative 69%

Nausea (ex-pregnancy related) 33%Anorexia 29%

HIV/AIDS Pain 19%PTSD 12%

Other 5%5%Multiple Scelrosis

Source: CanniMed Therapeutics

PRESCRIPTION PRACTICES AMONG CANADIAN PHYSICIANS



Decriminalized and/or are tolerating personal possession

Legalized for medical use

Legalized cultivation and/or possession for personal use

Recreational

Medical

Medical CBD**extracted from the plant but does not have THC, the psychoactive part of medical marijuana.

WORLD MARIJUANA LAWS

DC

US MARIJUANA LAWS


The decriminalization and legalization tide has been occurring on a global scale. Portugal decriminalized recreational cannabis use in 2001, as did Chile in 2005. Medical cannabis has been in use in the Netherlands since 2003 and Israel since 2007.28 In 2014 Uruguay became the first country to fully legalize the recreational and medical cannabis trade, including its possession and sale and possession. In 2016 Germany, Ireland, Australia, and Jamaica all approved measures to introduce medical cannabis.29 30 A legal action to decriminalize recreational use was filed in South Africa in March 2017.31

A main driver of the trend has been evidence that decriminalization and state oversight of the cannabis industry reduces drug-related crime while generating tax revenues.32 Decriminalization could potentially also reduce the substantial costs of policing. Marijuana arrests accounted for 58 per cent of all police-reported Controlled Drugs and Substances Act offences in 2017.33 Moreover, there is no convincing evidence of cannabis being a so- called gateway to other more harmful substances. After Portugal’s 2001 decriminalization, substance

abuse rates fell by 50% over the next decade.34 Furthermore, there is evidence that cannabis users are also likely to use it as a substitute for alcohol and tobacco.35

While the medical cannabis market potential is significant, the global size and growth of the recreational market cannot be underestimated. According to the United Nations Office on Drugs and Crime (UNDOC), today there are approximately 183 million regular cannabis users worldwide or 2.5% of the global population.36 About 18.9 million are located in the U.S. alone, while 52% of Americans aged 18 and over have smoked cannabis at least once.37

The market is expanding. In the U.S. there were 8.4 million more regular users, almost double the 4.4 million figure of 2007.38 Canada’s market is similarly dynamic, with the number of legal recreational users expected to rise to 3.8 million by 2021.39 With popular opinion strongly in favour of legalization worldwide and an existing illegal market worth $150 –200 billion, the stage is set for rapidly growing legal cannabis sales.


Source:“Recreational Marijuana - Insights and opportunities,” Deloitte Canada

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CANNABIS & CANADA

At the time of the 1923 ban, cannabis consumption in Canada was negligible. Arrests remained low through to the 1950s but started to increase in the 1960s. The government responded to this increase by forming the Le Dain Commission of Inquiry into the Non-Medical Use of Drugs in 1969 to examine the issue. In 1972 the commission recommended the decriminalization of cannabis possession,40 although the findings were not acted upon at the time. However, medical cannabis was eventually permitted in 2001.41

The legalization of cannabis was one of the electoral promises of the federal Liberal Party in 2015. After winning the election, the Liberal government set up the Task Force on Cannabis Legalization and Regulation in June 2016. They released their report in December 2016 with 80 recommendations for the country’s legal cannabis regime, including a minimum purchase age of 18, packaging standards, regulation of retail sales, penalties against trafficking, mail-order delivery standards, decriminalization for minor offences, and implementing a system of licensed producers to grow cannabis.42 With public opinion strongly in favour, in April 2017 the government introduced Bill C-45, also known as the Cannabis Act, which provides federal guidelines for legal access to cannabis for non-medical purposes and establishes controls to regulate the production, distribution, and sale of cannabis.43 The government initially expected for recreational cannabis to be on sale nationwide by July 2018; however, various provinces asked for more time to organize their frameworks concerning distribution, sales, price, and legal age minima. Manitoba asked for a delay until July 2019.44 Ontario was on schedule to start sales in July 2018, exclusively through 150 stand-alone LCBO-run stores with a minimum buying age of 19, but when Doug Ford won the 2017 Ontario Provincial election he decided to change the system to a licensing system of privately-run stores similar to Alberta.45 46 47

A Strong Growth Story


Canada is now rapidly emerging as a powerhouse in cannabis production and exports. To understand its potential growth, one can look at the example of the U.S. The total cannabis market there was worth an estimated $7.2 billion in sales in 2016, a growth of 30% year-over-year (YOY).48 Colorado, in particular, saw sales top $750 million in H1 2017, up 25.7% over H1 2016.49 The Colorado cannabis industry is expected to surpass tobacco by 2020 as a source of tax revenue.50

Recreational Marijuana is now legal in Canada

Considering Canada has seven times the population of Colorado, the potential market is very large. Deloitte estimates the retail cannabis market alone could be worth between $4.9–$8.7 billion, which is more than a twenty-fold increase from the $869 million in sales in 2016.51 52 When adding all ancillary industries, including security, transportation, testing labs, and cultivation the figure could reach $22.6 billion, generating $675 million in combined federal and provincial sales taxes in the first year.53


RECREATIONAL AND MEDICAL MARIJUANA SALES IN COLORADO

There is an especially strong potential for cannabis as a substitute to opioid-based painkillers, which are consumed by more than 6 million Canadians. The pain relief qualities of cannabis could gradually displace opioids, which are known to cause significant dependency and side effects. Only 7,000 physicians, or just over 9% of all physicians in Canada, currently prescribe medical cannabis to patients.54 This is due mainly to the fact that until recently cannabis could only be smoked, and cannabis oils only became legal for prescription in June 2015 and available to purchase from January 2016.55 56 According to Health Canada, cannabis oil sales by volume grew by more than 871% between April 2016 and March 2017.57

Other signs of exponential demand growth are evident. In the month before the October 2015 election, 30,357 people nationwide had prescriptions to use the drug.58 That number increased almost sevenfold to 201,398 by June 2017.59 Projections show that medical cannabis users could grow to


Canada is now rapidly emerging as a powerhouse in cannabis production and exports. To understand its potential growth, one can look at the example of the U.S. The total cannabis market there was worth an estimated $7.2 billion in sales in 2016, a growth of 30% year-over-year (YOY).48 Colorado, in particular, saw sales top $750 million in H1 2017, up 25.7% over H1 2016.49 The Colorado cannabis industry is expected to surpass tobacco by 2020 as a source of tax revenue.50

2016 2015

Jan$50

$75

$100

$125

$150

Feb Apr Jun Aug Oct DecMar May Jul Sept Nov

Source: Denverite Analysis of Colorado Department of Revenue Data

Considering Canada has seven times the population of Colorado, the potential market is very large. Deloitte estimates the retail cannabis market alone could be worth between $4.9–$8.7 billion, which is more than a twenty-fold increase from the $869 million in sales in 2016.51 52 When adding all ancillary industries, including security, transportation, testing labs, and cultivation the figure could reach $22.6 billion, generating $675 million in combined federal and provincial sales taxes in the first year.53

450,000 by 2024, or equal to a $1.2 billion market.60 61 By the end of Q2 2018, approximately 330,000 patients had signed up for medical cannabis usage, more than an eightfold increase in just two years.62 At this rate, Health Canada’s 2024 target will be reached in 2018.63 Recreational use is also in an uptrend. In 2018, an estimated 4.6 million individuals aged 15 and over will use cannabis at least once, according to the projection of Canada’s Parliamentary Budget Officer. By 2021, this level could rise to 5.2 million.64


There is an especially strong potential for cannabis as a substitute to opioid-based painkillers, which are consumed by more than 6 million Canadians. The pain relief qualities of cannabis could gradually displace opioids, which are known to cause significant dependency and side effects. Only 7,000 physicians, or just over 9% of all physicians in Canada, currently prescribe medical cannabis to patients.54 This is due mainly to the fact that until recently cannabis could only be smoked, and cannabis oils only became legal for prescription in June 2015 and available to purchase from January 2016.55 56 According to Health Canada, cannabis oil sales by volume grew by more than 871% between April 2016 and March 2017.57

Other signs of exponential demand growth are evident. In the month before the October 2015 election, 30,357 people nationwide had prescriptions to use the drug.58 That number increased almost sevenfold to 201,398 by June 2017.59 Projections show that medical cannabis users could grow to

CANADIAN MEDICAL CANNABIS TOTAL REGISTERED USERS

Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17

15,54523,930

39,668

75,166

98,460

129,876

167,754

0

20,000

40,000

60,000

80,000

100,000

120,000


RECREATIONAL MARIJUANA MARKET

Canadian producers have

export potential to markets in the

US, Germany & Brazil.

The expansion capability of

Canadian licensed producers is 2 to 12 times current

production.

Equity financing support is strong and growing for

licensed producers in Canada.

Total market size after ancillary

market (Growers, infused, testing, security) = $12.7

to $22.6B.

Average Growth in users is 29% per Q or 200%

annualized since 2014.

Canadian licensed producers have a

jump on most producers with

branding initiatives, such as Snoop Dog &

The Tragically Hip.


450,000 by 2024, or equal to a $1.2 billion market.60 61 By the end of Q2 2018, approximately 330,000 patients had signed up for medical cannabis usage, more than an eightfold increase in just two years.62 At this rate, Health Canada’s 2024 target will be reached in 2018.63 Recreational use is also in an uptrend. In 2018, an estimated 4.6 million individuals aged 15 and over will use cannabis at least once, according to the projection of Canada’s Parliamentary Budget Officer. By 2021, this level could rise to 5.2 million.64


A GLOBAL CANNABIS BOOM

Canadian cannabis producers are well positioned for the international market. Of the 29 countries in the world that allow medical cannabis, only Canada and the Netherlands are exporters.65 Israel has recently indicated its intention to become an exporter in the near future.66 The export market is led by five major players: Cronos Group, Canopy Growth Corporation, Aphria, CanniMed and Tilray.67 While no cannabis export permits were issued in 2015, 43 were issued in 2016 and 75 as of July 20th of this year.68 Export growth has been significant. Figures for both dried cannabis and cannabis oil as of July 2017 are already comparable to those for the whole of 2016.

The first foreign market of interest is the U.S., where medical cannabis sales are projected to grow from $4.7 billion in 2016 to $13.3 billion in 2020. Recreational sales are expected to rise from $2.6 billion in 2016 to $11.2 billion by 2020, an increase of over 300%. These spending estimates concern the legal market, which is expected to absorb part of the existing spending in the illegal cannabis market (worth $46.4 billion in 2016).69 By 2021, the illegal cannabis market is estimated to shrink to 67% of the total, from 87% in 2016.70

The Next Stage

MEDICAL MARIJUANA MARKET

1 in 5 Canadians use opiods for

pain management, cannabis can be

used as an alternative pain

reliever.

Cannabis can be used to treat patients in

palliative care as well as those suffering from

nausea, anorexia, PTSD, and MS.

Massive potential for medical

cannabis edibles, lozenges, dermal patches, sprays

& pills.

By the end of Q117, approximately

200,000 patients had signed up for medical cannabis usage, an over 8x expansion in just

2 years.

Medical and clinical research for cannabis is set to open up

after legalization.

Health Canada forecasts 400,000 medical users by 2024 equalling a

$1.2B market.

X



CANADIAN CANNABIS EXPORTS 2015-2017 YTD

US Attorney General Repudiates Obama-era Cole Memo:

The Cole Memo in the U.S., was the Obama administration’s response to an ever-increasing legalization trend in the U.S. at the state level, while marijuana was still federally illegal. Its intent was to let local state and district attorneys decide whether to pursue marijuana-related offences in states where medical or recreational use was legalized, as long as they met the criteria of the memo. It was an understanding, but not law.71 However, Attorney General Jeff Sessions, under President Trump, on January 4, 2017 rescinded the Cole Memo, essentially allowing local prosecutors to target marijuana offenders, even in states that legalized recreational marijuana.72

At the surface, this rescission appears to increase the risk for both U.S. and Canadian producers that operate in the U.S.; however, resources of local prosecutors are still finite, and U.S. federal cannabis laws are becoming increasingly unpopular, which also make it more difficult for local prosecutors to enforce,73 even if they wanted to. In fact, medical marijuana users are still protected under the Rohrabacher-Blumenauer Amendment which prevents federal funds from interfering with state medical marijuana laws.


2015 2016 2017through 7/20/17

0.0 0.0

100.8

Sept15

44.8

94.7

45.5

0

20

40

60

80

100

120 Cannabis Oil

Dried Cannabis

Source: Health Canadacopyright 2017 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved.


NORTH AMERICAN LEGAL CANNABIS SPENDING 2015-2021

Medical Adult Use

2015 2016 2017 2018 2019 2020 2021

4.0B

970M

4.9B

1.8B

5.68B

2.5B

7.0B

4.2B

7.0B

7.6B

7.1B

10.7B

7.7B

14.9B

$0

$5 Billion

$10 Billion

$15 Billion

$20 Billion

$25 Billion

Source: The ArcView Group, “The State of Legal Marijuana Markets 5th Edition.”

Between 2017 and 2020, the cannabis sector is expected to generate more than 250,000 new jobs, which is more than the entire American manufacturing sector.74

Other countries are also garnering the interest of Canadian producers. Germany’s lower house of parliament passed legislation in March 2017 allowing the use of cannabis for medical purposes.75 The new law covers both dried marijuana and oils. In Germany, there are currently only 1,000 medical cannabis users, out of a population of 82 million, with approval granted only through special exemptions. In addition to its large population, its median age of 46.4 years will make it a notably interesting market for cannabis pain relief applications.76 The law also mandates that health insurance cover cannabis prescriptions, relieving patients from the financial burdens of treatment.77 Pending the creation of its own production capacity, Germany demand will have to be necessarily satisfied by imports.

In Brazil, the government issued the country’s first license for sale of a cannabis-based drug in January 2017.78 British Columbia-based Tilray constructed a cultivation and processing facility in Portugal in October 2017,79 the first Canadian company to grow medical cannabis outside of the country.80 Canadian companies are also either exporting to or have made distribution agreements with companies located in Chile, Croatia, Australia, New Zealand, South Africa and Cyprus.81 Overall, Canadian licensed producers (LPs) can increment current production by between two and 12 times, which means they have the capacity to supply a growing domestic market, along with global market demands.82 Although, not everything goes to plan as witnessed by over-demand and under-supply still plaguing Canada’s marijuana marketplace since legalization in almost every province;83 although a temporary setback.84


CANADIAN CANNABIS STOCKS

An Investment Opportunity to Consider


As with any new industry, speed to market can prove to be a powerful advantage. It can help create brand awareness with customers, suppliers and investors, and it can also allow early movers to gain valuable experience that helps them stay in front of competitors.

In our view, the single biggest entry barrier in the cannabis industry is licensing. Medical users must buy their cannabis from a producer that has been licensed by Health Canada. The licensing process is extensive and features background checks on key management personnel, as well as requirements for facility security (e.g., fencing and security cameras). During 2017, cannabis product shortages and the coming legalization of the recreational market raised concerns that the licensing process was too time-consuming. In May 2017, and again in January 2018, Health Canada eased its requirements for licensing.

As the next figure shows, this has contributed to a significant increase in the number of companies licensed to grow cannabis. During 2017 alone, the number of licensees almost doubled.



Q313

50,000

100,000

150,000

200,000

250,000

300,000

Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118

8984

62

50

4137

2723

6

LICENSED CULTIVATION OPERATIONS


While the number of companies licensed to grow cannabis has increased dramatically, only a relatively small number are actually licensed to sell cannabis. In addition, cannabis oil products fetch prices that are 75% higher than simple dried cannabis, which means that many companies licensed to grow cannabis will be working to upgrade their licensing to produce and sell cannabis oil products as well.

We believe speed to market is very important. It allows producers to scale up faster, so that they can reduce their unit production costs as they expand, and it allows them to introduce new product lines to the market, once they have established their brands. In the new recreational market, speed may also allow some producers to secure ‘shelf space’ with retail operators before new entrants to the market are ready to compete.

The dramatic increase in the number of companies licensed to grow cannabis, combined with how well capitalized these companies are following recent financing activity, suggests that dried cannabis supply will increase significantly, which will likely put downward pressure on pricing over time.

When the price of a commodity falls, the companies that survive and prosper are the ultra-low cost producers who can be profitable, and the companies that are able to develop and commercialize unique value-added products that distinguish themselves from the pack (e.g., special products that justify higher pricing).

The legal cannabis market is today in its early infancy, a situation similar to the internet sector in the mid-1990s. The potential of this sector is already starting to manifest itself in full. Revenue and user growth in 2015-2017 in Canada and the U.S. has surpassed even the most optimistic expectations. Projections are for cannabis to remain the fastest growing sector in both economies until at least

2021.85 In Canada only, the legal cannabis market is expected to have a ten-fold increase in value, both thanks to endogenous growth and the absorption of existing illegal spending.86

The rescission of the Cole memo in the U.S. may, in fact, increase the expertise and growth potential of Canadian legal producers of marijuana as it keeps U.S. producers small and focused within each state. Federal legalization in the U.S. would instantly flood the industry with large producers offering large-scale competition to Canadian producers. Canadian marijuana companies will be able to further entrench their expertise and production capacity both within Canada and internationally under the new regime, while U.S. producers are still sidelined.

As more and more countries adopt legislation favourable to medical and recreational cannabis, many further global opportunities will appear in the next three to five years. Canadian cannabis stocks are perfectly positioned to profit from both domestic and international growth, combining first-mover advantages, wide product ranges, and growing international ties.

To find out more about Canadian cannabis stocks call Echelon Wealth Partners today at 416-572-5523.




1 The DEA Museum, “Cannabis, Coca, & Poppy: Nature’s Addictive Plants,” DEA Museum, accessed October 3, 2017, https://ww-w.deamuseum.org/ccp/cannabis/production-distribution.html.

2 Erowid.org, “History of marijuana & cannabis use and abuse,” Narconon.org, accessed October 3, 2017, http://www.nar-conon.org/drug-information/marijuana-timeline.html.

3 Erowid.org, “Cannabis, Cocoa & Poppy”.

4 Daniel Leblanc, “Ottawa to legalize outdoor cannabis crops,” The Globe and Mail, June 26, 2018, https://www.theglobeand-mail.com/politics/article-outdoor-cannabis-crops-soon-to-be-legal-in-canada/.

5 Leigh Coulter, June 1, 2018, “Why cannabis growers are increasingly moving toward greenhouse facilities”, BNNBloomberg.com https://www.bnnbloomberg.ca/video/why-cannabis-growers-are-increasingly-moving-toward-greenhouse-facilities~1408210, Live Broadcast/Video File, 4:00.

6 “Prescribing Physician Trends,” citing its 2016 Physician Survey, CanniMed Therapeutics, accessed January 15, 2017, https://w-ww.cannimedtherapeutics.com/investors/overview/the-medical-cannabis-market-in-canada/default.aspx .

7 Andrew Joseph, “Want to test a marijuana-based drug? Expect a visit from the ‘men in black’,” Stat News, May 16, 2016, https://www.statnews.com/2016/05/16/marijuana-research/

8 Fred Cicetti, “How Marijuana Could Help Glaucoma,” Live Science, April 12, 2010, https://www.livescience.com/6232-marijuana-glaucoma.html.

9 Maia Szalavitz, “Study: Smoking Marijuana Not Linked with Lung Damage,” Time, January 10, 2012, http://healthland.-time.com/2012/01/10/study-smoking-marijuana-not-linked-with-lung-damage/.

10 Robert J. DeLorenzo, ”Marijuana and its receptor protein in brain control epilepsy,” Virginia Commonwealth University News, accessed October 3 2017, http://www.news.vcu.edu/article/Marijuana_and_its_receptor_protein_in_brain_control_epilepsy.

11 CAM for Health Professionals, “Cannabis and Cannabinoids (PDQ®)–Health Professional Version,” National Cancer Institute, last modified October 20, 2017, https://www.cancer.gov/about-cancer/treatment/cam/hp/cannabis-pdq.

12 Mind & Mood, “Medical marijuana and the mind,” Harvard Mental Health Letter, April 2010, https://www.health.harvard.edu/-mind-and-mood/medical-marijuana-and-the-mind

13 “Marijuana may help stave off Alzhemier’s,” NBC News, January 7, 2013, http://www.nbcnews.com/id/15145917/ns/health-alzhei-mers_disease/t/marijuana-may-help-stave-alzheimers/#.UJqzy2l25Jl.

14 Amy Norton, “Marijuana may ease multiple sclerosis symptoms,” Reuters, May 14, 2012, http://www.reuters.com/article/us-mari-juana-sclerosis/marijuana-may-ease-multiple-sclerosis-symptoms-idUSBRE84D0RS20120514.

15 Alison Mack & Janet E. Joy, “Marijuana as Medicine? The Science Beyond the Controversy”, The National Academies Press, 2000.

16 Theresa Liu et al., “Marijuana use in hepatitis C infection does not affect liver biopsy histology or treatment outcomes,” Canadian Journal of Gastroentorology and Hepatology, 28, no. 7, (Jul/Aug 2014): 381–384, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4144456/

17 Waseem Ahmed & Seymour Katz, “Therapeutic use of Cannabis in inflammatory bowel disease,” Gastroenterology & Hepatolo-gy, 12, no. 11 (Nov 2016): 668–679, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5193087/.

18 Ethan B. Russo, “Cannabinoids in the management of difficult to treat pain,” Therapeutical Clinical Risk Management, 4 no. 1 (Feb 2008): 245–259, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2503660/.

19 Priyamvada Sharma et al., “Chemistry, Metabolism, and Toxicology of Cannabis: Clinical Implications,” Iranian Journal of Psychiatry, 7, no. 4 (Fall 2012): 149–156, https://www.ncbi.nlm.nih.gov MC2828614/.

20 Prakash Nagarkatti et al., “Cannabinoids as novel anti-inflammatory drugs,” Future Medicinal Chemistry, 1 no. 7 (October, 2009): 1333–1349, https://www.ncbi.nlm.nih.gov/pmc/articles/P- MC2828614/.

21 Sarah Trumble, “Timeline of State Marijuana Legalization Laws,” The Third Way, May 2, 2016, http://www.thirdway.org/infograph-ic/timeline-of-state-marijuana-legalization-laws.

ENDNOTES

22 “Market Data”, Health Canada, accessed February 7, 2018, https://www.canada.ca/en/health-canada/services/drugs-medica-tion/cannabis/licensed-producers/market-data.html.

23 “Market Data”, Health Canada, accessed February 7, 2018.

24 “Number of Physicians by Province/Territory and Specialty, Canada, 2018,” Canadian Medical Association, accessed October 12, 2018, https://www.cma.ca/Assets/assets-library/document/en/advocacy/01-physicians-by-specialty-province-e.pdf.

25 “Get the facts on the opioid crisis in Canada,” Health Canada, accessed September 10, 2018, https://www.canada.ca/en/ser-vices/health/campaigns/drug-prevention.html.

26 Canadian Institute for Health Information, “Pan-Canadian Trends in the Prescribing of Opioids, 2012 to 2016,” CIHI, Ottawa, ON, 2017, accessed October 20, 2018, https://www.cihi.ca/sites/default/files/document/pan-canadian-trends-opioid-prescribing-2017-en-web.pdf.

27 International Narcotic Control Board, “Technical report: Estimated World Requirements for 2018 – Statistics for 2016,” United Nations, New York, 2018, accessed October 21, 2018, https://www.incb.org/incb/en/narcotic-drugs/Technical_Reports/2017/narcotic-drugs-technical-report-2017.html.

28 Chris Morris, “The next big billion-dollar cannabis markets investors are rushing to,” CNBC, October 21, 2016, https://www.cnbc.com/2016/10/21/the-next-big-billion-dollar-cannabis-markets-investors-are-rushing-to.html.

29 “Medicinal cannabis crops now legal in Australia,” The Guardian, accessed October 3, 2017, https://www.theguardian.com/soci-ety/2016/oct/30/medicinal-cannabis-crops-now-legal-in-australia.

30 Meera Senthilingam, “Germany joins the global experiment on marijuana legalization,” CNN, March 6, 2017, http://edi-tion.cnn.com/2016/12/29/health/global-marijuana-cannabis-laws/.

31 Russell Stanley, “The Canadian Cannabis Market For Investors,” Echelon Wealth Partners, Toronto, ON, July 2017.

32 Sam Galegos, “Marijuana, tobacco taxes could bring $2 billion (or more) to California,” ABC News, November 4, 2016, http://ww-w.abc10.com/news/politics/elections/marijuana-tobacco-taxes-could-bring-2-billion-to-california/290927107

33 Department of Justice, “Cannabis crime statistics in Canada, 2016,” Government of Canada, July 2017, accessed November 5, 2018, https://www.justice.gc.ca/eng/rp-pr/jr/jf-pf/2017/july01.html.

34 Gavin Haines, “Mapped: The countries that smoke the most cannabis,” The Telegraph, April 20, 2017, http://www.telegraph.-co.uk/travel/maps-and-graphics/-mapped-the-countries-that-smoke-the-most-cannabis/.

35 Amanda Reiman, “Cannabis as a substitute for alcohol and other drugs,” Harm Reduction Journal, 6 (2009): 35, https://www.nc-bi.nlm.nih.gov/pmc/articles/PMC2795734.

36 United Nations Office on Drugs and Crime, “World Drug Report 2016,” UNODC, May 2016, (United Nations publication, Sales No. E.16.XI.7), https://www.unodc.org/doc/w dr2016/WORLD_DRUG_REPORT_2016_web.pdf.

37 Mary O’Hara, “New Poll Finds Majority of Americans Have Smoked Marijuana,” NBC News, April 17, 2017, https://www.nbc-news.com/news/us-news/new-poll-finds-majority-americans-have-smoked-pot-n747476.

38 Jessica Glenza, “Ten million more Americans smoke marijuana now than 12 years ago: study,” The Guardian, September 1, 2016, https://www.theguardian.com/society/2016/sep/01/marijuana-use-americans-study-lancet-legalization.

39 “Canada’s biggest cannabis company just made $321M acquisition,” The Cannabist, December 1, 2016, http://www.thecanna-bist.co/2016/12/01/canopy-growth-corp-canada-biggest-marijuana-company-acquisition/68594/.

40 Andrew Hathaway, “The Legal History and Cultural Experience of Cannabis,” Visions Journal, 5 no. 4 (2009): 12, quoted in “Here to Help”, accessed October 3 2017, http://www.hereto help.bc.ca/visions/cannabis-vol5/the-legal-history-and-cultural-experience-of-cannabis.

41 Chris Morris, “The next big billion-dollar cannabis markets investors are rushing to,” CNBC, October 21, 2016, https://www.cn-bc.com/2016/10/21/the-next-big-billion-dollar-cannabis-markets-investors-are-rushing-to.html.

42 Politics, “Highlights from the federal marijuana task force report,” CBC, December 13, 2016, http://www.cbc.ca/news/poli-tics/marijuana-task-force-highlights-1.3894219.

43 “The Cannabis Act: An overview,” Dentons, April 18, 2017, https://www.dentons.com/en/insights/alerts/2017/april/18/the-cannabis-act-an-overview.

44 Rob Ferguson, “Canada’s premiers discuss delaying the legalization of marijuana,” The Star, July 18, 2017, https://www.the-star.com/news/queenspark/2017/07/18/canadas-premiers-discuss-delaying-the-legalization-of-marijuana.html.

45 Ferguson, “Canada’s premiers”.











11 CAM for Health Professionals, “Cannabis and Cannabinoids (PDQ®)–Health Professional Version,” National Cancer Institute, last






17 Gastroenterology & Hepatolo-gy, 12, no. 11 (Nov 2016): 668–679, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5193087/.

18 Therapeutical Clinical Risk Management, 4 no. 1 (Feb 2008): 245–259, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2503660/.


20 Future Medicinal Chemistry, 1 no. 7 (October, 2009): 1333–1349, https://www.ncbi.nlm.nih.gov/pmc/articles/P- MC2828614/.


















36 United Nations publication, Sales No. E.16.XI.7), https://www.unodc.org/doc/w dr2016/WORLD_DRUG_REPORT_2016_web.pdf.

37 Mary O’Hara, “New Poll Finds Majority of Americans Have Smoked Marijuana,” NBC News, April 17, 2017, https://www.nbc-









46 Sean Williams, “Canada's Recreational Marijuana Approach Is Pure Genius, but It Would Never Work in the US,” Fool, accessed on October 3 2017, https://www.fool.com/investing/2017/07/09/canadas-recreational-marijuana-approach-is-pure-ge.aspx

47 Nick Westoll, “Marijuana to be sold through private retailers, online in Ontario,” Global News, August 13, 2018, https://global-news.ca/news/4385166/marijuana-sales-ontario/.

48 Debra Borchardt, “Marijuana Sales Totaled $6.7 Billion In 2016,” Forbes, January 3, 2017, https://www.forbes.com/sites/debra-borchardt/2017/01/03/marijuana-sales-totaled-6-7-billion-in-2016/#69a3814e75e3

49 Marijuana Business News, “Colorado marijuana sales top $750 million at 2017 midpoint,” Colorado Rocky Mountain High News, August 26, 2017, http://coloradorockymountainhightours.com/colorado-marijuana-sales/.

50 Daniel White, “Colorado's Marijuana Industry Had a $2.39 Billion Impact Last Year: Report”, Time, October 26, 2016, http://-time.com/4546522/colorado-marijuana-industry-economic-impact/.

51 Business Insider, February 2, 2017, http://www.businessinsider.de/canopy-growth-1-billion-revenue-giant-marijuana-industry-2017-2?r=US&IR=T.

52 “Recreational Marijuana - Insights and opportunities,” Deloitte, accessed October 3 2017, https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/Analytics/ca-en-analytics-DELOITTE%20Recreational%20Marijuana%20POV%20-%20ENGLISH%20FINAL_AODA.pdf.

53 Andy Blatchford, “Early marijuana sales ‘unbelievably high’ after legalization: US consultant,” The Globe and Mail, April 30, 2017, https://beta.theglobeandmail.com/news/politics/early-marijuana-sales-unbelievably-high-after-legalization-us-consultant-/article34859318/?ref=http://www.theglobeandmail.com&.

54 Russell Stanley, “Stepping Up to the Next Level,” Echelon Wealth Partners, February 3, 2017, http://research.echelonpart-ners.com/research/content/Cannabis_Theme_Report.pdf.

55 Sheryl Ubelacker, “Cannabis Oils Are Legal And Ready In Canada, Still Need Health Canada Approval,” , October 6, 2015,

56 “Cannabis Oils: A Look At What’s Available in Canada,” Leaf Science, February 21, 2016, https://www.leafscience.com-/2016/02/21/cannabis-oils-look-whats-available-canada/.

57 Tyler Nyquvest, “Licensing for cannabis oil lags behind heady growth,” Business Vancouver, October 3, 2017, https://www.biv.com/article/2017/10/licensing-cannabis-oil-lags-behind-heady-growth/.

58 Nyquvest, “Licensing for cannabis”.

59 “Market Data,” Health Canada, accessed October 3 2017, https://www.canada.ca/en/health-canada/ser-vices/drugs-health-products/medical-use-marijuana/licensed-producers/market-data.html.


61 The Canadian Press, “Health Canada swamped with medical marijuana business applications,” CBC, June 4, 2014, http://ww-w.cbc.ca/news/canada/health-canada-swamped-with-medical-marijuana-business-applications-1.2661070.

62 Russell Stanley, “Cannabis Weekly,” Echelon Wealth Partners, August 28, 2017, http://research.echelonpartners.com/research/-content/Cannabis_Weekly_Aug_28_17.pdf.

63 Stanley, “Cannabis Weekly”.

64 “Legalized Cannabis: Fiscal Considerations,” , November 1, 2016, http://www.pbo-dpb.gc.ca/web/-

65 Vanmala Subramaniam, “First-mover advantage,” VICE News, May 15, 2017, https://news.vice.com/story/canadian-weed-pro-ducers-will-dominate-the-global-marijuana-market

66 Israel Today, August 22, 2017, http://www.israelto-day.co.il/NewsItem/tabid/178/nid/32231/Default.aspx.

67 Vanmala Subramaniam, “First-mover advantage.”

68 Matt Lamers “Canadian exports of medical marijuana soar as producers seek overseas toehold,” Marijuana Business Daily, August 15, 2017, https://mjbizdaily.com/canadian-ex-ports-medical-marijuana-soar-producers-seek-overseas-toehold/.

69 Will Yakowicz, “Illegal Pot Sales Topped $46.4 Billion in 2016, and That's Good News for Marijuana Entrepreneurs,” Inc., January 17, 2017, https://www.inc.com/will-yakowicz/marijuana-sales-2016-50-billion.html.

70 Yakowicz, “Illegal Pot”.

71 Debra Borchardt, “Marijuana Industry Projected To Create More Jobs Than Manufacturing By 2020,” Forbes, February 22, 2017, https://w-ww.forbes.com/sites/debraborchardt/2017/02/22/marijuana-industry-projected-to-create-more-jobs-than-manufacturing-by-2020/.

72 Lisa Rough, “The Cole Memo: What Is It and What Does It Mean?” Leafly.com, September 14, 2017, https://www.leafly-.com/news/cannabis-101/what-is-the-cole-memo.

73 Leafly Staff, “Sessions Rescinds Cole Memo, Which Protected State-Legal Cannabis from Feds,” Leafly.com, updated January 5, 2018, https://www.leafly.com/news/politics/sessions-rescinds-cole-memo-which-protected-state-legal-cannabis-from-feds.


75 Meera Senthilingam, “Germany joins the global experiment on marijuana legalization,” CNN, March 6, 2017, http://edi-tion.cnn.com/2016/12/29/health/global-marijuana-cannabis-laws/index.html.

76 Stanley, “Stepping Up to the Next Level.”

77 Global Legal Monitor, “Germany: Medical Marijuana Act Enters into Force,” Library of Congress, March 13, 2017, http://ww-w.loc.gov/law/foreign-news/article/germany-medical-marijuana-act-enters-into-force/.

78 Reuters, January 16, 2017, https://www.reu-

79 “Canadian Tilray to produce cannabis in Portugal,” Essential Business, September 24, 2018, https://www.essential-busi-ness.pt/2018/09/24/canadian-tilray-to-produce-cannabis-in-portugal/.

80 CBC News, September 7, 2017, http://www.cbc.ca/news/canada/british-columbia/tilray-expands-eu-1.4279274.

81 Harrison Jordan, “A country-by-country guide to Canada’s cannabis exports,” Lift News, accessed October 3 2017, https://news.lift.co/country-country-guide-canadas-cannabis-exports/


83 https://www.ctvnews.ca/business/supply-shortages-plague-canada-s-new-cannabis-marketplace-1.4160476

84 https://nationalpost.com/news/ontario-government-says-pot-deliveries-back-on-track-after-backlog-cleared

85 Melia Robinson, “The legal weed market is growing as fast as broadband internet in the 2000s,” Business Insider, March 1, 2017, http://www.businessinsider.de/arcview-north-america-marijuana-industry-revenue-2016-2017-1?r=US&IR=T.

86 Business Insider, February 2, 2017, http://www.businessinsider.de/canopy-growth-1-billion-reve-nue-giant-marijuana-industry-2017-2?r=US&IR=T.

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Forward-looking statements are based on current expectations, estimates, forecasts and projections based on beliefs and assumptions made by author. These statements involve risks and uncertainties and are not guarantees of future performance or results and no assurance can be given that these estimates and expectations will prove to have been correct, and actual outcomes and results may differ materially from what is expressed, implied or projected in such forward-looking statements.

as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results.

These estimates and expectations will prove to have been correct, and actual outcomes and results may differ materially from what is expressed, implied or projected in such forward-looking statements.

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51 Melia Robinson, “The marijuana industry's first $1 billion 'unicorn' is a Canadian company you've probably never heard of,” Business Insider, February 2, 2017, http://www.businessinsider.de/canopy-growth-1-billion-revenue-giant-marijuana-industry-2017-2?r=US&IR=T.




55 Sheryl Ubelacker, “Cannabis Oils Are Legal And Ready In Canada, Still Need Health Canada Approval,” Huffington Post, October 6, 2015, http://www.huffingtonpost.ca/2015/10/05/producers-of-dried-medical-pot-awaiting-approval-to-sell-now-legal-cannabis-oils_n_8247300.html.









64 “Legalized Cannabis: Fiscal Considerations,” Parliamentary Budget Officer, November 1, 2016, http://www.pbo-dpb.gc.ca/web/-default/files/Documents/Reports/2016/Legalized%20 Cannabis/Legalized%20Canabis%20Fiscal%20Considerations_EN.pdf.


66 Adam Abrams, “Israel Expects High Profits From Medical Cannabis Exports,” Israel Today, August 22, 2017, http://www.israelto-day.co.il/NewsItem/tabid/178/nid/32231/Default.aspx.











































































































78 Reuters Staff, “Brazil issues first license for sale of a cannabis-based drug,” Reuters, January 16, 2017, https://www.reu-ters.com/article/us-brazil-cannabis/brazil-issues-first-license-for-sale-of-a-cannabis-based-drug-idUSKBN1502AN.


80 Cathy Kearney, “Nanaimo-based medical marijuana company first to cultivate product outside Canada,” CBC News, September 7, 2017, http://www.cbc.ca/news/canada/british-columbia/tilray-expands-eu-1.4279274.






86 Melia Robinson, “The marijuana industry's first $1 billion 'unicorn' is a Canadian company you've probably never heard of,” Business Insider, February 2, 2017, http://www.businessinsider.de/canopy-growth-1-billion-reve-nue-giant-marijuana-industry-2017-2?r=US&IR=T.



The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Echelon Wealth Partners Inc. or its affiliates. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results.


































































































We’re a leading independent, Canadian-owned and operated wealth management and capital markets firm, known for our client-centered approach and entrepreneurial spirit. Echelon is a compelling option for investors seeking unbiased investment solutions, professional management and unparalleled service. We aim to build lifetime relationships and deliver superior service. Our financial professionals have the freedom to offer truly independent investment advice, always putting their clients’ needs first. We are also a growing firm, with more than $4 billion in assets under administration and management. We service clients across Canada from our offices in Toronto, Oakville, Ottawa, London, Montreal, Saskatoon, Edmonton, Calgary, Vancouver and Victoria.































































































