Canada shocked the world by awarding approval to produce and sell Cocaine to Adastra Labs in Langley. Whereas the current illicit drug market far exceeds $500Billion globally, analysts would have a hard time guessing the value if a “legal” Cocaine market was to unfold in Canada and North America.
With a “wild ride” – I mean that this could go either way and it will be crucial to track the developments here, hence I will attempt to update this story as it unfolds.
Some investors already judged this a red hot opportunity:
Seemingly a few investors who were “in the know” had started moving in on this. Adastra Holdings Ltd CNSX: XTRX shot up and doubled its stock price in the last 2 weeks leading up to today 03/03/2023. On Friday 3rd March 2023 alone, it went up more than 60% following the news.
Adastra share prices increased following the news:
- According to Adastra Labs in Langley, on 17 February 2023 it received approval from Health Canada to legally “possess, produce, sell and distribute” cocaine. This came in the form of an amendment to it’s existing dealer license to interact with up to 250 grams of cocaine. It also includes the import of coca leaves for the purpose of manufacturing.
- “Harm reduction” at a time when illicit drugs are being laced with Fentanyl may require a new approach. Traditionally, harm reduction considers that legalizing substances and controlling its use, can in theory prevent undesired issues related to supplying and consumption in an unlawful environment where people are more subject to exploitation and the risk of serious illness or death. In this context, Michale Forbes, the CEO of Adastra said: “Harm reduction is a critically important and mainstream topic, and we are staying at the forefront of drug regulations across the board.” Forbes explained that an amendment to the dealer’s license was pursued proactively – and that the company will now conduct an evaluation of how the substance can be commercialized within the Adstra business model.
- Forbes is said to have extensive experience in methadone pharmacies and the piloting of a CDC needle exchange program a decade ago.
- Since there are no health benefits from cocaine: it is speculated that the only potential benefit to governments may be reducing excess deaths caused by fentanyl laced illicit drugs.
- Later down the line: Now CBC Canada reported that Trudeau got involved, with a headline saying: “B.C. firm retracts claim of licence to sell cocaine after prime minister and premier weigh in” – and the B.C. premier stating that: ‘The company has significantly misrepresented the nature of the licence,’ Trudeau said Adastra did not have permission to sell on the “open market”, but could only sell to “other licence holder” – and that the Adastra licence is for “scientific and medical purposes only.”
- The B.C. premier may want to go back to school if he calls one omission a significant misrepresentation. What can be deduced from his statement and that of Trudeau, is that Adastra might “possess, produce, sell and distribute cocaine to other licence holders”.
It Sounds Like Liberal Local Governments are Backing Legalization of Cocaine in Parts of Canada:
Kevin Falcon, a lawmaker said the following:
“(Thursday) we had a very important discussion that should worry British Columbians, and that is a company issued a press release about how excited they are for the commercialization of the sale of cocaine in B.C.,” Falcon said during a media availability.
“As we’ve said from the beginning, the decriminalization program that the NDP is rushing head-long into, our comment is that there is effective decriminalization for amounts of 2.5 grams or less, which the police chief told me and I agree. But the guard rails put in place by the federal government were spelled out really clearly, (the BC NDP) has not fulfilled any of the requirements.
Near Exclusivity: Did Adastra struck Gold in Canada?
One of the reasons Adastra shares have taken off, may include the fact that this seems more like a pilot program where licenses to sell cocaine will be a very exclusive affair. Government letter leaked to the press said the following:
“There are very strict rules in place for obtaining and maintaining a Controlled Substances Licence in Canada,” Health Canada said in an email.
“Adastra Labs is licensed by Health Canada for this controlled substance for scientific and medical purposes only.”
Health Canada said the permission to sell will be only allowed to other licence holders, who have cocaine listed on their licence, pharmacists, hospitals, or the holder of a section 56(1) exemption for research purposes.
“Health Canada thoroughly reviews applications to ensure that all the appropriate policies and procedures are in place to maintain public health, safety and security,” Health Canada said.
“Health Canada has contacted the company to reiterate the very narrow parameters of their licence. If the strict requirements are not being followed, Health Canada will not hesitate to take action, which may include revoking the licence.”
Remember the CBD / Cannabis Industries?
When the CBD and “medical cannabis” trends started in North America, most companies listed in Canada first – and slowly but surely, most U.S. states including the most conservative states started to allow CBD and cannabis in small quantities. Today it is growing at 20% per annum and is expected to reach $47Billion soon.
The reality is that Cocaine is a far more addictive substance than CBD and Cannabis. In high GDP per capita countries, just as we have seen with the gambling industry, it can reach a substantial market size, which is maintained by a loyal following.
Combating The Effects Of The Fentanyl War on North America?
One argument put forward by some liberals, is that it is no secret that all types of recreational drugs, including cocaine, are being laced with Fentanyl – which in turn leads to excess deaths to the tune of 150 deaths per day according to the CDC. Liberals would argue that “surely the punishment for using illicit drugs should not be death, especially for innocent first time users.” If this sentiment and rationale spreads from Canada to the U.S. then indeed legal cocaine will cause far fewer deaths than illegal cocaine laced with cocaine.
Whatever happens, do not protest in Canada:
Just remember, Trudeau did show his willingness to freeze peoples money and call them terrorists if they dare protest what happens under his watch. So whether you are for or against this development, for goodness sake, don’t put him to the test by protesting.
Yes, it is shocking to hear amid America’s war on drugs on the southern border, amid a brutal fentanyl and cocaine turf war, that up north in Canada, the same thing is not such a big deal. Well, Larry Ellison once said “morality is based on fashion.” While most people will not know what to make of this from a moral perspective, a handful of investors are probably hoping to ride the white horse with Adastra. The dust will soon settle between what opposing government officials say – and what Adastra can actually be doing with it’s licence. In the meantime, be careful not to jump on the bandwagon with wild speculations.