On Black Friday, HEXO Announced It Will Take On the Marijuana Black Market
The legalization of recreational use of marijuana in Canada last year was a major milestone for the cannabis industry. It allowed pot companies to operate more freely in a market whose growth over the next few years promises to be stratospheric. But despite pot being legal in Canada, cannabis companies still have to abide by stringent regulatory guidelines in order to cultivate and sell their products.
Considering that the relevant Canadian authorities have been slow to issue retail licenses -- particularly in Ontario, the largest province by population -- it isn't surprising that the illegal marijuana market in Canada is still alive and well. The CEO of Canopy Growth (NYSE: CGC), Mark Zekulin, commented on this dynamic during the company's second-quarter earnings conference call:
We're pleased to see the recent announcement that Ontario has made a commitment to move toward an open allocation of retail licenses, where the number of stores will only be limited by market demand. ... Until this happens, the cannabis sector cannot reach its full sales potential and cannot convert consumers from the illicit market into the legal market.
Source Fool.com
