The Canadian recreational marijuana market is set to open in one month, but the big news in the sector over the course of the next year might be focused on the United States.
Canopy Growth (TSX:WEED)(NYSE:CGC) is a market leader in the emerging global marijuana sector, and while much of the focus has been on the company’s partnership with Constellation Brands, which owns Corona and now has a 38% stake in Canopy Growth, the medical side of the industry remains a core focus for Canopy Growth in Canada and internationally.
Canopy Growth has nearly 40 U.S. patents and more than a dozen clinical trials already underway, so it is positioned well to capitalize on potential U.S. opportunities in the medical cannabis space.
In addition, New York-based Constellation Brands might decide to take a majority interest in Canopy Growth down the road. Depending on how the rules pan out south of the border, this could help Canopy Growth’s U.S. prospects.
In the United States, the evolution of the medical cannabis market took a major step forward in recent days with an approval granted by the U.S. Drug Enforcement Administration (DEA) for the legal import of a cannabinoid study drug from Canada.
The University of California San Diego Center for Medicinal Cannabis Research will use product supplied from B.C.-based Tilray to conduct research on the potential benefits cannabinoids could offer in the treatment of essential tremor. Tilray is known for its leading medical research in the cannabis sector. The company supplies cannabis and cannabinoids for medical marijuana patients around the world.
The decision is groundbreaking, as it hints that the U.S. might be in the early stage of changing the rules.
Is Canopy Growth positioned to win in the U.S.?
The DEA decision should bode well for Canadian producers of cannabinoids for the medical segment. Canopy Growth is a highly respected company in the sector and additional opportunities should arrive for the major players now that the door could be opening at the federal level in the United States.
The overall cannabis surge has caught many people by surprise in the past two years, and the industry is set to become a major disruptor. Opportunities for similar returns are evolving in other sectors of the market.
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Fool contributor Andrew Walker has no position in any stock mentioned.