Is Marijuana Legal In Canada?
No, Marijuana is not legal yet in Canada but with the Cannabis Bill, C-45, receiving Royal Assent on June 21st, legalization is now scheduled for October 17th 2018.
In this report we take you through the remaining steps to legalization and discuss what we think the future holds for legal marijuana users in Canada.
How a Bill Becomes Law in Canada
The general steps from the proposal of a bill to the passage into law follow these steps.
- Introduction and first reading
- Referral to a committee before second reading (where applicable)
- Second reading and referral to a committee
- Consideration in committee
- Report stage
- Third reading (and passage)
- Royal Assent
- Coming into force <——– WE ARE HERE
After the Final Senate Vote the Bill is Now Waiting for Royal Assent
The house of commons made a few changes to the bill last week and then sent the edited bill to the Senate late Friday for a final vote before Royal Assent.
The Senate decided not to argue with any of the changes proposed by the House of Commons and voted to approve the final version of Bill C-45, pushing the bill on to Governor General Julie Payette for her signature.
Payette’s signature serves as ‘Royal Assent’ because the governor general is technically appointed by the Queen of England to sign in her name. Royal assent happened on June 21st.
The Marijuana Bill Will Take 4 Months to Become Law after Royal Assent
Even after Bill C-45 receives Royal Assent, the government still needs to physically prepare to sell marijuana to the public.
The provinces are largely on hold with the infrastructure and manpower needed to regulate legal marijuana until the bill receives Royal Assent, so will be woefully unprepared if the bill were to become law in a few days.
The provinces advised the government that they will need 8 – 12 weeks (2 – 3 months) to get ready to sell marijuana to the public. The government confirmed on June 20th that they heard the provinces loud and clear and are pushing back the coming into force date until October to give all levels of government time to prepare.
So, When Will Marijuana be Legal in Canada?
Justin Trudeau is promising that Canadian’s will be able to legally buy and grow marijuana for recreational use no later than October 17th, 2018, almost 4 months after Royal Assent.
What Will Happen to the Marijuana Market after Full Legalization?
Legal recreational marijuana is just the beginning for the average Canadian. Here is what Grizzle thinks will happen in the next 12 months.
Edibles and Concentrates Should be for Sale Legally by October 2019
If you would rather not smoke your marijuana, another option is coming but it will take time. Marijuana edibles and concentrates, which don’t require smoking to ingest, will be available in all retail locations within 12 months after the ‘coming into force’ date which Grizzle believes will be mid-September 2018.
The Price of Marijuana in all Forms Will Fall, Potentially by a Lot
Grizzle has extensively tracked the future supply and demand of marijuana in Canada. Licensed producers plan to build dozens of greenhouses across the country, which will flood Canada with much more dried marijuana than its citizens can consume starting in late 2019. Legal supply will be 2x more than the market requires by 2020 and international demand isn’t growing fast enough to absorb the excess.
With too much marijuana to go around, prices for wholesale dried marijuana will fall. In provinces where pot shops are controlled by the government (Quebec, Ontario, and part of Alberta) consumers may only see small decreases in the price they pay as the government will keep most of the increased profit.
In provinces with privately run retail stores (Manitoba, B.C. and a few others) consumers could see a large decrease in price as companies fight among themselves to grow their customer base.
Supply Will Far Exceed Demand
Source: Stat Can, Grizzle Estimates
The Future of Marijuana is in Medicine
The next big step for marijuana beyond just recreation is to become a safer alternative to many of the pain medicines we take every day. The pain market in North America is worth $14 billion, three times as large as the entire marijuana market. Another area where marijuana shows significant promise is to decrease the effects of different mental disorders such as epilepsy and autism.
Pharmaceutical marijuana research is still in the very early stages, but over the next 3-5 years, expect to see many new marijuana drugs approved across the world.
We also will see big pharmaceutical companies begin buying marijuana research companies as they become comfortable with the viability of legal marijuana. This buying frenzy will benefit marijuana investors, though the timeline is uncertain at this early stage.
Summing it All Up
If the cannabis bill C-45 receives Royal Assent by June 22nd, which Grizzle considers likely, Canadians will be enjoying legal marijuana by the fall.
The legalization of marijuana will open up a whole new market to Canadians and eventually the entire world. If you’re a consumer, be patient and you will be rewarded with a cheap and convenient supply of cannabis. For investors the potential of marijuana to upend the traditional drug market is where the real money is going to be made. These are exciting times for the marijuana market.
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