The Pacific Northwest has always been a cannabis-friendly region. From “BC Bud” to Washington State’s early leadership in the US legal recreational market, our progressive climate and culture of early adoption have always made it feel as though full-blown legalization was just a matter of time.
On October 17th, Canada and by extension British Columbia, became just the second country to fully legalize and regulate the recreational cannabis market. Quite suddenly, the West Coast of North America from California up to British Columbia has collectively become one of the largest legal markets in the incredibly fast-growing, ever-changing cannabis industry. The legal recreational market is already a billion-dollar industry in Washington State. Economists estimate Canada’s market could grow to $5B in the next two years. California will most certainly become the largest market globally in short order.
Add in the fact that this coastal stretch is also the world’s engine for innovation and it’s potentially a recipe for global leadership in the sector. Tech companies are already launching products and services that leverage blockchain, IoT, image recognition, AI, and enterprise software tailored for the industry.
But of course, some major challenges currently exist: banking constraints; a US federal policy; and multiple, wholly separate regulatory environments between states and countries. While these restrictions and risks for producers, retailers and consumers moving across borders are numerous and well-publicized, the opportunity for entrepreneurs, investors and companies in ancillary goods and services is potentially enormous. For investors, there are opportunities in real estate, the exploding CBD market, finance and software, among others. For established US cannabis companies, there are opportunities to license existing IP to partners in huge new markets like Canada.
The key to effectively leveraging this massive opportunity is partnerships, both in industry and professional services. Regulatory fragmentation and cross-border constraints will require a robust and nuanced approach to market expansion. To minimize risk, it will be critical to have partners that intimately understand the industry in their respective markets to say the least.
At the recent Cascadia Innovation Corridor Conference, a gathering of regional business and government leaders exploring areas for greater collaboration, the cannabis industry was barely mentioned in passing. As this new global industry starts to take shape, perhaps the Northwest should embrace its long-standing weed-friendly culture and take a more proactive stance in making Cascadia a global leader in yet another industry.
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