Cannabis stocks on a high at mining’s expense
There is a salutary lesson for SA's listed mining stocks as cannabis companies eat into Canada's junior mining sector's funding
South African miners and explorers want to take note of a growing threat to junior miners in Canada in the form of a shrub, Cannabis Sativa — or marijuana, to be precise. The listing of cannabis-related companies in Canada since the herb was legalised late in 2018 has resulted in a flood of money pouring into those stocks and out of junior mining companies, which have long been held up as an example of what SA should be doing to attract investment into exploration and junior mining companies. In SA, where the personal ownership of cannabis is legal, there could be similar implications if companies bring the drug to the JSE, given the underperformance of mining shares against the broader market in recent years. Canada’s venture exchange on the Toronto bourse and tax incentives have resulted in companies at the forefront of mineral exploration, discoveries and the creation of a pipeline of new sources of deposits for larger companies. The trend of investment money out of junior mining...
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