February 2018

OPINION: Turn and face the strange

Fiona_RintoulAs a barometer of how much the world changed in the 20th century, almost nothing tops female suffrage. This is the centenary year of female suffrage in Austria, Estonia, Georgia, Germany, Hungary, Latvia, Poland, Russia and (in limited form) the UK and Ireland, and to glance back at the suffragettes’ campaigns and the counter campaigns is to journey to a time when it was common to hold views on this topic that now strike us as ridiculous. These were not the first countries to introduce female suffrage. New Zealand gave women the right to vote in 1893 and Australia in 1902. Finland, then part of the Russian empire, became the first European country to grant female suffrage in 1906. But 1918 feels like a tipping point. Within Europe, by the end of the Second World War, only Switzerland, Moldova and some piddling principalities had not granted women the vote. The battle was won. The naysayers looked like idiots.

Could 2018 be a tipping point too? The world around us is changing at dizzying speed. Women in Iran are throwing away their hijabs. Chinese banks are trouncing US banks in the brand value stakes, according to Brand Finance. The end of the oil economy is becoming a serious subject, as the Chinese government orders Beijing taxi drivers to use electric cars.

But one indicator of change really stands out to me: I keep getting press releases about cannabis. Ten years ago, this would have been unthinkable. All of a sudden, cannabis stocks are being included in vice ETFs, you can buy cannabis insurance and the National Cannabis Industry Association in the USA is organising quarterly cannabis caucuses (#CannabisCaucus).

In Sweden, where cannabis is illegal and polls suggest most people want it to stay that way, two Canadian cannabis companies, Aurora Cannabis Inc and Canopy Growth Corp, were among the top 10 most traded shares at online broker Nordnet AB in January. Powered by the legalisation of cannabis for medicinal use in countries such as Canada and Germany, and for medicinal and recreational use in the US states of Colorado, Washington, Oregon and Nevada, the legal marijuana market is taking off – and at speed. According to Helix TCS, provider of operating solutions for the legal cannabis industry, cannabis-related cultivation and retail investments tripled to $718 million in January to September 2017. With California legalising adult use of cannabis on January 1 this year, the legal cannabis industry is projected to exceed $50 billion by 2022.

“The legal cannabis industry is the single fastest-growing industry in the United States – one that’s poised to create nearly 300,000 jobs by 2020,” says Zachary Venegas, CEO of Helix TCS.

As well as providing fun new words (‘Ganjapreneur’, anyone?), this obviously creates an investment opportunity – albeit one fraught with challenges. “No investor would prudently ignore such a market, but one must be mindful that this unique sector is rife with complex legal and regulatory risks,” says Venegas. But, like all trends, it is perhaps a more general bellweather. With populist politicians calling the shots from the White House to Warsaw, it can feel like the world is headed in a reactionary, illiberal and protectionist direction. Counter trends, such as the spreading legalisation of cannabis, show it isn’t necessarily so.

It’s interesting to note that in July 2017, Uruguay became the first country where the sale of cannabis is legal across the entire territory. It was also one of the first countries in Central and South American to introduce female suffrage.

Fiona Rintoul is editorial director at Funds Europe

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