Today, Canada's cannabis companies are the only ones that trade on U.S. exchanges, but their businesses have struggled amid rampant oversupply. While U.S. cannabis companies are performing much better financially than their Canadian counterparts, their business is still illegal at the federal level, leading to all sorts of tax and cost burdens.
Perhaps a better place for cannabis investment is another country altogether. What's more, this country has the highest global cannabis usage rate as a percentage of the population: Israel.
The growing Israeli market may get more attention soon, as Canada-listed SPAC Subversive Real Estate Acquisition (OTC: SBVR.F) recently announced plans to acquire Israeli cannabis company InterCure (OTC:IRCLF), bringing the leading Israeli cannabis business onto the Toronto Stock Exchange, with an eye toward applying for a Nasdaq listing as well.
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Currently, the Israeli cannabis market is medical-only, though it's projected that the country may go fully legal on an adult-use recreational basis by 2022. In 2020, the medical market was $214 million, relatively small. But it's estimated that there were $1.7 billion in illicit sales outside of that. So analysts think the legal Israeli market could increase by 10 times between now and 2027, to around $2 billion, as adult use is legalized and normalized.