Many believe that Philip Morris or British American Tobacco are the market leaders in tobacco distribution. However, this is far from the truth. In fact, the largest tobacco distributor is China National tobacco in terms of volume. Unfortunately these companies margins are being squeezed due to increased regulation surrounding tobacco leaving them with only two sustainable options going into the future
– Investment in Cannabis
– Investment in E-Ciggs
Some are even perusing both avenues.
Why should you consider an investment in cannabis?
In recent years, there has been a large cultural shift towards the legalisation of cannabis. On top of that, the increased legislation in the tobacco industry has made cannabis a more profitable prospect. Naturally the end consumer is beginning to switch their preference. In addition, as it’s becoming more socially accepted, more and more governments are beginning to legalise it. As a result, this is leading to increased competition from new entrants but also increased opportunity.
Unlike smaller businesses setting up to take advantage of this legislative shift larger companies such as Philip Morris or British American Tobacco could dominate this niche. However, Asian markets have not been as rapid towards this shift. Is this bad? Absolutely not but it’s definitely worth keeping an eye on. Why might that be?
For the reason we’ve outlined above, China is the largest distributor of tobacco and is mainly due to lack of legislation and size of the population. It’s only a matter of time before they begin to legalise cannabis. When the same cultural shift begins to happen in Asian markets it will be worth noting the main players in tobacco as these companies will be the first to dominate this niche not only nationally but globally.