Jason Drummond has high hopes for the Green Acres Capital Fund, Canada’s first marijuana-focused investment fund.
The fund launched at the start of January, and has already collected around $10 million of a roughly $30-million goal.
“We’re going to end up investing in 15 to 20 businesses that we think can all grow and all provide returns,” Drummond said.
Entering the fund is not cheap. It carries a minimum buy in of $100,000.
Drummond is the managing director at York Plains Investment Corp and an owner and founder of the Leo’s Group, which runs Leopold’s and Victoria’s Taverns.
He believes that current licensed growers will be the leaders in the future recreational marijuana market in the field. That doesn’t mean there aren’t more opportunities to get in on the ground floor.
“There’s not just people growing it. You’ve got to sell it, you’ve got to refine it, there’s a tone of different products within the industry. There’s the medical side, there’s the pharmaceutical side,” Drummond said.
That pharmaceutical side took a major market step at the end of December. Saskatoon-based CanniMed became a publicly traded company on the TSX at the end of December.
CanniMed makes a variety of medicinal marijuana products, including concentrated marijuana oil and dried cannabis.
“So I think from a business perspective, new investors are quite excited as we are,” CanniMed president and CEO Brent Zettl said.
According to business consulting firm Deloitte, there is plenty to be excited about.
In a study released in October, they estimate the value of just selling recreational marijuana could be a $4.7 to $8.9 billion industry in Canada.
When factoring the economic impact of support industries like transportation, security, and paraphernalia, Deloitte’s estimate balloons to an industry worth $22.6 billion dollars.
The report says this does not include additional figures like taxes and licensing fees. Deloitte says revenue from these two streams totaled over $52 million in Colorado last fiscal year.
“It’s obvious the opportunities are substantial,” the Deloitte report says.
Potential Medicinal Boom
Zettl anticipates that the further normalization of marijuana will result in an increase in medicinal use as well.
He says that this can be coupled with Canada’s effort to curb opioid abuse of pharmaceuticals that are commonly prescribed for pain relief and can also be used as street drugs.
“When we look at our 20,000 rough patients that we have, that are registered with us, 58 per cent use it for managing some form of pain,” Zettl explained.
“We see that as a displacement or replacement in some cases of the opiates that are being used. It’s becoming more standardized and normalized in the practice.”
Zettl adds that Canada has a legal framework for distributing medicinal marijuana that puts our market ahead of other jurisdictions.