There’s been a great deal of development in current the years when it pertains to the legalization of cannabis. In 2018, Canada became just the second country on the planet (after Uruguay) to legislate recreational cannabis. In the U.S., more than 30 states permit the medical use of cannabis, 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 marijuana for medical use. The most recent milestone for the market comes from the Middle East, where Lebanon has become the first Arab country to permit medical cannabis.
Brand-new law could make Lebanon a major provider of marijuana in the world
In Lebanon, farmers can now grow cannabis for medical and industrial purposes. Cannabis can also be exported, which might lead the way for more competition in The United States and Canada and other parts of the world that count on foreign supply. Lebanon has a warm climate that can make it simple to grow cannabis year-round. And with more than 100 years of growing experience with marijuana, the nation knows how to grow pot. Data from the United Nations shows that after Morocco and Afghanistan, Lebanon is the biggest supplier of cannabis (hashish) worldwide.
Now that it’s legal to export pot out of the country, farmers in Lebanon have a chance to take advantage of the market’s growth in many different parts of the world. And while that might benefit the international marijuana market, it could spell trouble for North American cannabis business– particularly those involved with hemp, such as Charlotte’s Web ( OTC: CWBHF)
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Is this problem for hemp manufacturers?
Although Lebanon legislated medical marijuana, the law effectively resolved hemp, as it limited the plants’ tetrahydrocannabinol (THC) material to less than 1%. And with hemp legal federally in the U.S., foreign producers in Lebanon could possibly import hemp into the country, driving down prices and margins at the same time. According to industry experts, there’s currently an oversupply of hemp in the U.S.; more coming online may only make matters worse.
Charlotte’s Web, which produces items utilizing cannabidiol (or CBD, a non-psychoactive compound found in the hemp plant), is already dealing with challenges in moving its products. The company crossed out $139 million of stock, consisting of $12 million of completed products, in its most recent quarterly results That’s not something you expect to see, especially in a growing industry. Many business are growing hemp since that’s the most convenient method to tap into the marijuana market’s growth in the U.S. And if there are more hemp providers in the future, generating sales growth will be even more tough for Charlotte’s Web. In the business’s fourth-quarter results, sales were up by simply 6%from the prior-year quarter and down 9%from the 3rd quarter.
What does this mean for investors?
Cannabis investors will desire to keep an eye on companies that might expand to that part of the world as an outcome of legalization. For cannabis producers, it could be an opportunity to produce inexpensive pot and get closer to reaching breakeven.
Cannabis business from Lebanon could likewise start to appear on the global phase, and some of those could be excellent investment chances. And while those developments may still be months or years away, they work as important pointers for financiers not to get too comfortable holding a stock like Charlotte’s Web. The more locations that legislate marijuana, the more competitors there will be in the industry. Investors will have a lot more options to select from in the years ahead, and a domestic grower may not necessarily be the very best option.
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 discussed. 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“>