CANNAINVESTOR Magazine U.S. Publicly Traded February 2018 | Page 106

Editor

Anecdotally, if we accept as fact that alcohol is a recession proof industry and that the legal cannabis industry will take away market share from the alcohol industry then it stands to reason that the legal recreational cannabis industry must also be, to a degree, also recession proof. We can accept this as evidenced by the statistics demonstrating that alcohol sales dropped significantly in those states that legalized recreational marijuana. One of our first case studies was The Tinley Beverage Company (CSE:TNY; OTC:QRSRF) and this recent update suggests operations with respect to their THC TNY27 alcohol inspired (only – there is no alcohol) beverages are weeks if not days away.

Regardless of the economic conditions, people need their medication and their remedies including topical creams. This is true for prescriptions and for over the counter medications. As cannabis derived alternatives tend to be lower cost, transitioning away from the traditional costly alternatives is simply a function of time and money. Insurers too may start to cover medical marijuana because of the cost savings once they legally are able to do so. By example, Germany’s medical benefits cover the cost of medical marijuana.

The hypothesis is therefore that we have an existing and growing market that is reasonably insulated from international economic events and has recession proof elements as well as strong and growing demand elements. Elements that are relatively indifferent to economic conditions in the short

run – however, for example, a prolonged economic downturn may lead to increased illnesses whether physical or mental health related. Cost from seed to customer is not as susceptible to inflationary pressures compared to, for example, highly skilled and in short supply specialists. The US currently accounts for 90% of the legal cannabis industry sales but that will fall to 57% by 2021 mostly due to Canada. However, a growing industry in itself is also a counter force to overall recessionary pressures.

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