I’ve been intrigued by how well the Shopify share price has held up or at least recovered and am also keenly interested in how their next quarter’s results are going to look given:
- The legalisation of Cannabis in Canada in October and their ecommerce leadership exposure there
- The benefits of the (Google) cloud migration and removal of double spend inefficiencies on the bottom line
In particular Cannabis players seem to be regaining some momentum after posting massive volume and $ revenue growth in their Q4 reports however beyond the Day 1 announcements, Shopify has been very tight lipped about how Cannabis sales are going.
Whilst checking out the triple digit growth rates reported by Cannabis players in the most recent quarters and as we await the Q4/Q1 earnings releases, I came across an interesting piece on CNBC by Wall St’ “top weed analyst”, (I don’t know what it takes to be Wall St’ top weed analyst but anyway).
Besides forecasting a massive number for the US market opportunity by 2030 (US$80Bn), they had some interesting comments on the Canada situation and the 2019 Canada market forecast (C$3.1Bn)…
It will be interesting to see how this comes through in Shopify’s numbers and whether Shopify can gain a similar kingpin position in the US ecommerce market.
Worth keeping an eye on me feels.
After months of political haggling and legal debate, Canada became the first Group of Seven country to OK recreational use of pot on Oct. 17. But despite the excitement surrounding national legalization, Azer said that the adult-use market got off to a rocky start thanks to a rushed retail framework (e.g., no stores in Ontario) and insufficient supply available.
Still, as Canadian legislatures gradually legalize new forms of cannabis consumption, planned production expansion should be enough to ease those early concerns.
“With the market set to expand to include novel form factors, and with expanded retail access, we remain encouraged at the market’s potential for growth in 2019, where we expect adult use sales (at retail) to total C$3.1 billion (including taxes),” Azer said.