TL: DR - What You Need To Know
Safe Supply Streaming Co. (CSE: SPLY), a startup, has entered the Canadian Securities Exchange with an intriguing focus on the potential legalization of cocaine. The company anticipates a third wave of policy changes that could decriminalize hard drugs, following the path of cannabis and psychedelics.
Safe Supply aims to support businesses that could benefit from these shifts, including producers of fentanyl test-strips, addiction clinics, and coca leaf-infused energy drink makers. CEO Bill Panagiotakopoulos leads this endeavor.
Currently valued at approximately C$11.9 million, Safe Supply's recent market valuation has dipped from its earlier C$20 million. However, the startup projects a $3.2 billion market for legal cocaine in British Columbia, where decriminalization efforts are underway.
Safe Supply aspires to a global scale, advocating for the regulation, sale, and taxation of drugs like ordinary products to address the drug crisis and reduce overdose fatalities. Their vision is encapsulated in a pitch deck that aims to build a better world and help bring a responsible end to the drug war.
Their strategy involves creating an ecosystem by acquiring businesses related to the drug industry, leveraging their public company status. Notably, governments worldwide have shown interest in legalizing hard drugs, such as Portugal, Oregon, British Columbia, and Switzerland.
While some see potential benefits, concerns exist, including fears that legalization could normalize drug use.
Safe Supply's board adviser, Ronan Levy, countered concerns, emphasizing the urgent need for investments in addiction and treatment facilities.
Why This Is Important for Retail Investors
Market Opportunity: Safe Supply's projection of a $3.2 billion market for legal cocaine in British Columbia demonstrates a substantial market opportunity. Retail investors may be attracted by the potential for profit in a burgeoning market.
Diversification: For retail investors seeking diversification in their investment portfolio, this venture offers exposure to a unique and relatively untapped sector—the legalization of hard drugs. Diversification can help spread risk.
Global Expansion: Safe Supply's ambition to advocate for global drug decriminalization means potential expansion beyond Canada. Retail investors looking for exposure to international markets may find this appealing.
Innovation and Disruption: Investing in a startup at the forefront of potential policy changes in the narcotics industry is a speculative way for investors to engage with innovative and disruptive trends that could reshape the market.
Impact on Ancillary Industries: Safe Supply's plan to support businesses related to the drug industry, such as addiction clinics and testing equipment providers, could have a ripple effect on these ancillary sectors. Retail investors may benefit from investing in companies poised to gain from this ecosystem.
While these points highlight potential benefits, investing in such ventures carries significant risks. Retail investors should conduct thorough due diligence and consider their risk tolerance before participating in this market.
How Can You Use This Information?
Here are some of the investing ideas that can be explored using this information:
Growth Investing
Safe Supply presents a speculative growth opportunity. If you believe in the company's vision and its potential to tap into a sizable market, you might want to hold its stock with the expectation of substantial future growth.
Sector Rotation
Identify and invest in companies within sectors related to drug decriminalization. For example, addiction treatment clinics, pharmaceutical companies working on harm reduction solutions, or businesses involved in drug testing technology. As the narrative around drug policy changes, these sectors may experience growth.
Momentum Trading
Monitor the stock prices and trading volumes of companies associated with the drug policy changes. As news and developments unfold, there may be short-term trading opportunities based on momentum. However, be cautious with this strategy, as it can be volatile.
Ethical or Impact Investing
If you believe in the social or ethical implications of Safe Supply's mission to reduce drug-related harm and improve treatment, you may choose to invest in these ventures from an impact investing perspective. Look for companies aligning with your ethical values in the broader drug policy reform space.
Read What Others Are Saying
Bloomberg (Legal Cocaine Is Coming, This Canadian Startup Predicts)
Yahoo (Safe Supply Streaming Co. Ltd. to Begin Trading on the CSE)
CNBC (Cocaine production is at its highest level on record, UN says)
