There’s been a great deal of development in recent the years when it comes to the legalization of marijuana. In 2018, Canada ended up being just the 2nd country on the planet (after Uruguay) to legalize recreational marijuana. In the U.S., more than 30 states permit the medical usage of marijuana, and a farm costs was passed over a year ago that made hemp legal federally. Even conservative nations in Asia such as South Korea and Thailand now allow cannabis for medical usage. The current turning point for the market comes from the Middle East, where Lebanon has actually become the very first Arab country to permit medical cannabis.
New law could make Lebanon a major supplier of cannabis on the planet
In Lebanon, farmers can now grow marijuana for medicinal and industrial purposes. Cannabis can also be exported, which could lead the way for more competition in The United States and Canada and other parts of the world that depend on foreign supply. Lebanon has a warm climate that can make it simple to grow marijuana year-round. And with more than 100 years of cultivation experience with marijuana, the nation knows how to grow pot. Information from the United Nations shows that after Morocco and Afghanistan, Lebanon is the biggest supplier of cannabis resin (hashish) on the planet.
Now that it’s legal to export pot out of the nation, farmers in Lebanon have a chance to make the most of the industry’s development in several parts of the world. And while that might benefit the global cannabis market, it could spell trouble for North American cannabis business– especially those involved with hemp, such as Charlotte’s Web ( OTC: CWBHF)
Image source: Getty Images.
Is this bad news for hemp producers?
Although Lebanon legislated medical marijuana, the law successfully dealt with hemp, as it restricted the plants’ tetrahydrocannabinol (THC) material to less than 1%. And with hemp legal federally in the U.S., foreign manufacturers in Lebanon could potentially import hemp into the country, driving down rates and margins in the process. According to industry specialists, there’s already an oversupply of hemp in the U.S.; more coming online may only make matters worse.
Charlotte’s Web, which produces products utilizing cannabidiol (or CBD, a non-psychoactive compound discovered in the hemp plant), is already facing obstacles in moving its products. Lots of business are growing hemp because that’s the easiest method to tap into the marijuana market’s development in the U.S. And if there are more hemp providers in the future, generating sales development will be even more difficult for Charlotte’s Web.
What does this mean for investors?
The legalization of medical cannabis in Lebanon isn’t going to have any substantial effect on North American pot stocks, at least not anytime quickly. However, cannabis financiers will want to keep an eye on companies that might expand to that part of the world as a result of legalization. The environment in Lebanon is more favorable to growing pot than that in lots of parts of North America. For cannabis producers, it could be an opportunity to produce affordable pot and get closer to reaching breakeven.
Cannabis companies from Lebanon could likewise begin to appear on the global stage, and a few of those could be fantastic investment chances. And while those advancements may still be months or years away, they function as crucial pointers for financiers not to get too comfortable holding a stock like Charlotte’s Web. The more places that legislate cannabis, the more competitors there will be in the industry. Financiers will have much more choices to select from in the years ahead, and a domestic grower may not always be the very best choice.
David Jagielski has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Charlottes Web Holdings. The Motley Fool recommends Charlotte’s Web. The Motley Fool has a disclosure policy.”>
position in any of the stocks mentioned. The Motley Fool owns shares of and advises Charlottes Web Holdings. The Motley Fool recommends Charlotte’s Web. The Motley Fool has a disclosure policy“>