On Monday, Marijuana Business Daily reported that Canada, with first-mover advantage, has been exploring new territories to export its cannabis oil. Last year, the company reported to 17 counties—the highest number of counties that it has exported to until now. Overall, Canada exported 5,372.3 liters of cannabis oil products last year—a rise of 483.9% from 920 liters exported in 2018. Meanwhile, Health Canada allowed 12,887.9 liters of cannabis oil to be exported. Canada exported less than 50% of the allotted quota. The Marijuana Business Daily article stated that this doesn’t mean that the remaining quantity wasn’t exported. There will always be a lag between issuing export permits and actual exports. Also, changing business conditions might have forced companies to abandon their export plans.

Meanwhile, Australia, Germany, and Denmark account for 90% of Canada’s exports. In 2019, Canada exported 3,700 liters to Australia, 790 liters to Germany, and 336 liters to Denmark.

Cannabis oil has an advantage over dried cannabis

Canada’s cannabis oil exports continued to outperform dried cannabis in 2019. According to Health Canada, cannabis producers consider 1 liter of cannabis oil to be equal to 0.93 kilograms of cannabis. So, 5,372.3 liters of cannabis oil is equal to 4,996 kilograms. In comparison, the dried cannabis exports stood at 3,740 kilograms. As reported by Marijuana Business Daily, medical cannabis oil can be readily used in medical products, which has increased the demand for the product. Overall, Canada exported 8,736 kilograms equivalent of cannabis last year.

Australia, Colombia, Jamaica, and Portugal are also eyeing the cannabis export markets. However, Canada has a first-mover advantage.

Growth in cannabis exports didn’t help Canadian companies

Marijuana Business Daily added that despite the surge in cannabis exports, it didn’t improve Canadian companies’ financial positions. Many companies cut their losses. International markets didn’t grow at their expected rate. In the last few months, many prominent cannabis players have ceased or sold their production and processing facilities in international markets to conserve cash. Aurora Cannabis (NYSE:ACB) stopped the construction of its second-phase facility in Denmark. Meanwhile, Canopy Growth (NYSE:CGC) exited its African operations by transferring the ownership of its operations in a local business. The company also halted its farming operations in Springfield, New York, and moved to an asset-light model in Latin America.

Cannabis sector’s YTD performance

So far this year, the cannabis sector has underperformed the broader equity markets. The ETFMG Alternative Harvest ETF (NYSE:MJ) has declined by 20.6%, while the S&P 500 Index has fallen by 5.1%. Operating losses, thriving black market sales, lower-than-expected Cannabis 2.0 demand, and weak cash positions have been a drag on the cannabis sector. During the same period, Aurora Cannabis, Canopy Growth, and Tilray (NASDAQ:TLRY) have fallen by 46.4%, 17.0%, and 50.7%, respectively.