The cannabis industry should prepare itself for a “clash of the titans” as growing U.S. companies face off with Canada’s already-established players, says a GMP Capital Inc. investment banker who specializes in the industry.

“My thesis is the Canadian companies won’t go down to the U.S. immediately but will go around the globe and become their own little behemoths, while the U.S. companies are going to come up,” Steve Ottaway, who’s a managing director at the firm’s GMP Securities business, said in an interview at Bloomberg’s Toronto office. “There will be an eventual clash of the titans between the two for brand superiority and distribution channels.”

GMP is hosting an investor conference on the marijuana industry Thursday in Toronto. The company has done three equity financings in the space this year, including Canopy Growth Corp.’s $200.7-million deal and Cronos Group’s $100-million stock sale in March. Canada’s publicly traded marijuana companies, of which there are now 89 with a combined market capitalization of $29.6-billion, are building up a “war chest” to fund expansion and potential takeovers ahead of recreational legalization later this year, Ottaway said Wednesday.

Story continues below advertisement

However, fundraising has been lumpy amid volatility in pot stocks, which nearly tripled in 2017 but have since lost about a quarter of their value.

“We’ve had a couple of down weeks for fundraising, and then last Friday Trump changed it,” Ottaway said, referring to the U.S. President’s statement that he would let states decide how to regulate the drug. “It’s a very news-driven space. It’s like predicting the weather -- you should predict often.”