Cannabis craze weeds out junior mining field – by Joe Bavier and Barbara Lewis (Reuters Canada – February 7, 2019)

https://ca.reuters.com/

CAPE TOWN (Reuters) – A boom in cannabis investment is siphoning capital away from mining and hitting junior miners hardest, forcing them to up their game and potentially improving the quality of projects in a sector long rife with cowboy speculators.

Canada’s relaxation of cannabis laws culminated in legalization for recreational use in October. Other jurisdictions are following suit or liberalizing their laws on medical or health use, creating an industry that has lured a breed of high-risk, high-return investors.

The world’s top three listed cannabis companies – Canopy Growth, Tilray and Aurora Cannabis – have a combined market value of around $30 billion. And consumers are expected to spend over $7 billion on cannabis products in Canada alone this year, according to Deloitte.

In Africa, where miners met this week for Cape Town’s African Mining Indaba conference, cannabis companies are setting up projects in Lesotho, while other countries, including Zimbabwe and South Africa, plan to issue license.

“Raising money is extremely difficult,” said Patrick Downey, head of Canadian junior gold exploration company Orezone Gold, who compared the cannabis boom to the headwinds juniors faced during the dot-com bubble of the late 1990s.

For the rest of this article: https://ca.reuters.com/article/businessNews/idCAKCN1PW1CR-OCABS

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