Summary

With Canada’s legalization of recreational marijuana, the next level of retail could be targeting ecommerce. As the cannabis industry has been fragmented, a company like Amazon could help consolidate it through online retail sales. Other non-cannabis companies like Shopify already see the potential and are getting involved early on. The digitization of cannabis sales could create an entirely new ecosystem for products and services.

If you really look at Amazon (AMZN), they’ve definitely taken their fair share of the money generated from simply giving a platform for ecommerce to flourish. But now there is a bigger question mark being created after Canada’s passage of C45, which legalized the retail sale of recreational marijuana across Canada: Will cannabis experience the Amazon Effect next?

You have to start thinking outside the box now because like we saw during the early days of legal cannabis (even on medical level alone), you could call any liquor distributor, beer company, or retail alcohol store in the popular cannabis states like California, Colorado, or even Washington State and ask, “Do you think legal marijuana will hurt your business.”

Outside The Box is The New Norm

More times than not (from personal experience), the answer would be “no” or “I don’t think so.” Fast-forward to today and now the liquor giants are scrambling for their own piece of the pie, pharmacies like Shoppers Drug Mart, Lovell Drugs, and PharmaChoice, which inked an exclusive pharmacy distribution agreement with CanniMed Therapeutics (acquired by Aurora Cannabis (OTCQX:ACBFF)) earlier this year, and countless other cannabis companies are making a play for market dominance.

What happens next? Well, just like traditional retail industries did in the past, digitization is coming and Canadian companies are already planning for rapid adoption of an online model to complement brick and mortar (for now). Under valid Health Canada commercial licensing, it is legal to produce, distribute and sell cannabis online and mail the product directly to your customers.

So here we have an already fragmented industry with hundreds of marijuana stocks floating around, there are new billion dollar valuation IPO’s going live, and there are still multi-million ad multi-billion dollar mergers happening right now.

Similar to what we saw when Amazon began to coral the entire group of small electronics companies, book distributors, etc. “way back when,” there could be a massive opportunity ahead for a company like Amazon to swoop in and organize these pot companies. This in turn could give a real platform to both source raw material as well as fully processed goods.