The Canadian federal government has switched the production of medical marijuana from a monopoly to a relatively free market as it opens up a new commercial industry for entrepreneurs. This is a precious opportunity for new entrants, as it is rare to have a brand new market.

Just like what Ries and Trout stated, being the first in an industry is the easiest way to make the customers remember you. Since June, 171 parties have applied for a licence, which opens the door to the industry that is expected to worth $1.3 billion by 2024. Other than being the first, the producers are also establishing the point of difference by personalizing the cannabis’ contents through different tetrahydrocannabinol (THC) concentration for different customers.

Economically speaking, surplus will be maximized with the combined effect of a free market and economies of scale. However, the estimated high price of $7.60/gram might become a burden on the users in the short run, and ultimately lead to  black market behaviours or the illegal action of home growers.

Source:

http://www.cbc.ca/news/canada/canadian-pot-growers-eyeing-medical-marijuana-free-market-1.1894621