The current preoccupation with recreational pot is about to fade as investor interest focuses on medicinal marijuana. The alliance announced last week between B.C. pot producer Tilray Inc. and Swiss pharmaceutical giant Novartis AG is a game-changer.
Tilray products co-branded with Novartis and its Sandoz AG consumer products unit will boast an enviable legitimacy with hospitals, doctors and patients served by the global distribution network of Novartis, among the largest Big Pharma enterprises. Tilray signed another deal last week, with brewing giant Anheuser-Busch InBev NV, to develop cannabis-infused beverages. But the big story is the Tilray-Novartis alliance.
Recreational and medicinal pot are different industries, a distinction not yet made by most investors. Recreational pot is long established, and while some growth is to be expected from legalization, that industry has simply shifted from the illicit to the legal realm.
By sharp contrast, medicinal pot is in its relative infancy, with tremendous growth potential.
Though it has proved its efficacy in treating pain, arthritis, epilepsy and other conditions, pot’s medicinal potential has been barely tapped. And legalization of pot in medicine will come sooner worldwide than for recreational use.
The U.S. will legalize medicinal marijuana in coming weeks, while recreational pot remains illegal at the national level.
Recreational pot use tends to be occasional, while many medicinal pot treatments will be “maintenance” drugs, like those for diabetes and high blood pressure, and will be used for a lifetime. And given the onerous regulatory approvals required of pot medications, there will be fewer players than in the over-crowded recreational industry.
That makes the pot firms strongest in medical marijuana the ones that will deliver the biggest investor returns in the long term.
Solving Trudeau’s Huawei quandary
Justin Trudeau keeps insisting that politics plays no part in Canada’s detention since Dec. 1 of one of China’s most prominent businesspeople on a U.S. arrest warrant alleging violation of U.S. trade sanctions against Iran. Or in deciding whether to grant access for her employer, Huawei Technology Co., world’s biggest maker of telecom equipment, to Canada’s emerging fifth-generation mobile network.
In fact, those actions are entirely political, including Beijing’s detention of three Canadian nationals in retaliation for Canada’s detention of Meng Wanzhou, Huawei’s second-ranking executive.
Trudeau earlier this year blocked the proposed sale of a second-tier Canadian engineering firm, Aecon Inc., to a state-controlled Chinese company on specious national security grounds.
Politics, or geopolitics, will also determine Trudeau’s decisions in this debacle. Among the ideal options is to release Meng Wanzhou in exchange for freeing the Canadian nationals. And to grant Huawei, which employs about 500 people in its extensive Canadian R&D operations, the access it craves to Canada’s 5G network, provided Huawei share its technology with Canadian partners – exactly what Beijing requires of offshore enterprises doing business in China.
The real story here is America’s determination to thwart China’s quest for leadership in a range of 21st-century technologies, on the flimsy pretext of national security.
That is flagrant hypocrisy.
Huawei has not been shown to be a spy for Beijing, while the Obama administration used bugs to eavesdrop on German Chancellor Angela Merkel — America is no slouch at illicit collection of intelligence on others.
The U.S. is pressuring its allies, including Canada, to help crush China’s ambitions. Even putting aside the U.S. administration’s neighbour-from-hell treatment of Canada since 2016, it isn’t Canada’s job to protect Silicon Valley from competition, and allow the U.S. to dictate Canadian industrial policy.
A needed French presidential turnaround
Emmanuel Macron’s French presidency is in trouble, and that’s no small matter for the world.
The French president has been a resolute champion of a European Union whose existence parallels Europe’s longest stretch of peace and prosperity.
The trade opportunities opened to Canadian industry by the Canada-EU Comprehensive Economic and Trade Agreement (CETA) give all Canadians a stake in the health of the French republic. France and Germany are the twin pillars of the EU, itself the world’s biggest economy.
The disturbing phenomenon of yellow jacket, or gilets jaunes, demonstrators burning cars and demolishing storefronts across France in recent weeks, in a populist revolt against Macron’s second diesel-tax hike this year, resonates among Albertans who’ve donned yellow jackets in their anti-Ottawa protests .
Macron is hobbled by a dismissive hauteur, and a reputation for being a servant of the wealthy.
But Macron can save his presidency. Having weakened himself by caving into the “mob” in scrapping the second of his diesel-tax hikes Dec. 5, Macron can recast himself as a forceful leader with a “people’s agenda” that includes pension reforms; the introduction of the same earned income tax credit for the working poor that then-U.S. president Bill Clinton used to narrow the gap between rich and poor; and a rejigging of tax brackets to end the windfall for the rich that resulted from Macron’s hugely unpopular scrapping of France’s wealth tax.
With several EU countries under the sway of nativist leaders, and Britain heading out of the EU, the dynamic optimist who won the Élysée Palace in May 2017 vowing to reform the EU, not dismantle it, is more needed now than ever.
David Olive is a business columnist based in Toronto. Follow him on Twitter: @TheGrtRecession