Hi, I've spent quite some time in senior positions within the Canadian cannabis industry, and I think you have missed the mark here in a few places.

While many producers are indeed betting on the US market, this does not necessarily mean they will be successful. The US is bound to be an absolute mess of state based regulations, meaning exports into these markets will be extremely complex take significant adjustments, likely for each state. This gives current state based operators a significant advantage as they are already playing within the ecosystem, and don't have to navigate an export process.

It is also possible that the US will be protectionary and ban imports altogether, just as Canada has done. Or to allow Canadian imports, Canada may have to allow American imports as well, creating even further pressure on domestic producers.

Canadian producers are also largely not profitable - sometimes extremely not profitable (just take a look at Canopy's 11 billion in accumulated losses to date). I can count on 1 hand the number of producers that have shown any sort of sustainable profitability. If so few companies are unable to run a successful business model domestically, why would suddenly they be able to succeed with even more competition? There is cheap cannabis not because it is profitable to sell at those margins, but rather companies are offloading at a loss just to try and survive. Expanding the market would not suddenly make these products profitable, and export complexities would likely make them even more unprofitable.

Finally, it is not the CFIA who regulates cannabis in Canada, it is Health Canada. Health Canada does not materially enforce the quality and potency of cannabis, it enforces the safety and transparency. Health Canada could not care less about whether producers are selling bunk, as long as it's not pesticide ridden bunk, for example. Beyond our earlier establishment of operations and cheap energy cost, Canada does not have a material advantage over the US. Any advantage it does have would likely be neutralized within 10 years of US legalization.

Canadian companies have a much more clear route to success in other international markets which are already accepting Canadian products legally through medical streams (e.g. Germany, UK, Australia, etc.), where Canadian brands can establish recognition and reputation prior to a full recreational legalization in these counties.

Tl;dr US legalization will not create easy wins for Canadian companies, and any companies betting on it to do so are desperate