Tuesday, June 19th, 2018. For marijuana advocates across Canada and the world, this is a date that will always be remembered, with the Canadian Senate passing Bill C-45, also known as the Cannabis act, by a vote of 52-29. In the Marijuana Legalization world, this will make Canada only the second country in the world to have a nationwide legal marijuana market. Other countries like the U.S. may allow for medicinal and recreation uses in some states, but a nationwide market is only found in Uruguay—until now.
For Canadian prime minister Justin Trudeau, this marked the fulfillment of a campaign promise he made. “It’s been too easy for our kids to get marijuana – and for criminals to reap the profits. Today, we change that. Our plan to legalize & regulate marijuana just passed the Senate. #PromiseKept,” he tweeted following the landmark ruling.
While those in the marijuana business, as well as potential customers, are celebrating, it’s important to understand that rolling out legislation of this scale takes time. As a result, there’s going to be a bit of a delay that means that people won’t be able to use marijuana nationally on a wider scale until a later date. In addition, it’s important to understand the path that led to this recent ruling, and what it could mean for the Canadian economy and worldwide legalization efforts. This guide will walk you through how the cannabis industry reached this point, and what you can expect moving forward.
When is Marijuana Legalized in Canada?
For those on the outside looking in, the ruling may be a bit confusing, as while June 19th marks the date of legalization, one can’t actually use marijuana recreationally yet under the law. In fact, the country will have to wait until October 17th of this year.
Originally, Trudeau and the government were hoping to have pot formally legal by July 1st, a date which had already passed, but there are some delays regarding actually rolling things out. With only one other country actually doing this to date, it’s easy to understand how there is a desire to make sure that the preparation for retail sales is done properly at the territorial and provincial levels.
Why is Marijuana Legalization Being Delayed?
What exactly does the delay entail? Some examples of this include:
- Business licenses
- Growers’ licenses
- The supply chain
- Compliance, at every step of the industry
Being the first major economy to legalize marijuana nationwide, Canada has a lot of eyes on it from other countries debating legalization themselves. This added scrutiny means that it is important that things go smoothly as retail stores prepare to set up. So, don’t think of this delay as a last-ditch effort to stop legalization, so much as it is a grace period to make sure that things are done properly. There’s a reason why the U.S. state of California only started marijuana sales earlier this year, even though legalization had passed some time before.
Along with this, keep in mind the fact that it won’t necessarily take too long to reach this point. Following the ruling, the government said that this process would take roughly eight to 12 weeks. As of right now, Trudeau has said that the law allowing legalization is scheduled to go into effect on October 17th, 2018, and at least some of the retail sales will be allowed to start on that date.
Before then, the only way to get legal marijuana is to do so for medicinal purposes, with proper approval, through mail order purchases from licensed providers. This is little change from when medicinal marijuana was first legalized in 2001.
What is Bill C-45?
The law in question is Bill C-45, also known as the Cannabis Act, which was originally introduced in April of 2017 by Justice Minister Jody Wilson-Raybould, along with then-health minister Jane Philott, Public Safety Minister Ralph Goodale, National Revenue Minister Diane Lebouthillier, and parliamentary secretary Bill Blair. This will allow for the retail sale of marijuana and will go into effect along with a law removing possession from the Criminal Code.
In essence, this law is the backbone of legalization in Canada, which is why it has gone through several iterations before reaching this point. Here’s a brief timeline on what happened before Bill C-45 reached its current incarnation:
- April 2017: Bill C-45 is introduced.
- September 2017: Bill C-45 gets several key amendments from the House of Commons Health Committee. Most of these are technical, but a few of them are of note to those in the marijuana industry, like removing a height restriction on homegrown plants.
- November 2017: Bill C-45 is passed by the House of Commons by a vote of 200 to 82. It is sent to the Senate at this point, but conservative senators had already been talking about plans to delay the bill.
- December 2017: This marks the first debate in the Senate over the bill, with 13 days of debate total taking place at this stage of the process.
- February 2018: Senators finally lay out a formal timeline for Bill C-45. At this point, the final vote was expected to happen around June 7th, already pushing back the government’s planned legalization time of July 2018.
- March 2018: Bill C-45 is passed on to the committee stage, 44-29.
- May 2018: Supplementary studies and senator recommendations take place. Following the committee’s 18 meetings, they bring the bill back before the Senate with 40 amendments. Most of these, again, are technical, with one huge exception: premiers can ban home-growing in their provinces or territories if they choose to.
- June 13, 2018. The home-growing amendment is rejected, along with other reforms like prohibiting marijuana companies from distributing branded merchandise.
- June 19, 2018. Bill C-45 passes by a vote of 52 to 29.
- June 21, 2018: Bill C-45 receives royal assent, officially marking its passage into law.
Highlights of the Cannabis Act
All this leads us to the current wait for marijuana legalization, but what exactly are the parameters of this going to be? We mentioned some of the failed amendments and early changes in the history of the bill, but what’s going to matter most to the average Canadian interested in marijuana legalization are the day-to-day details on what you can and can’t do. Here are some of the points you need to take note of:
- Adults will be able to share and carry up to 30 grams of legal marijuana in public.
- Adults will also be allowed to grow up to four plants in their households, as well as prepare edibles and other products for personal use.
- Marijuana will not be able to be sold in the same locations as alcohol or tobacco.
- Consumers still need to purchase their marijuana from regulated retailers. If there aren’t any available, then they should seek out federally licensed producers.
- The minimum age for consumers is 18. This is one point of objection for even some marijuana supporters, as other areas where marijuana is legalized has the minimum age at 21. For Trudeau and the government, the intent here is to discourage pot use for younger ages by making it subject to the same restrictions as cigarettes.
- Production, distribution, and the sale of cannabis products will still be an offense for minors.
Upcoming Changes to Canada’s Marijuana Laws
For the most part, these rules are going to be the overall law of the land once October rolls around, However, as can be expected when it comes to sweeping changes like this, one can expect there to be pushback. One example of this revolves around that home-growing amendment that we mentioned earlier. Quebec, Manitoba and Nunavut have all decided they don’t want to allow home growing at all, which is why the Senate put in the amendment in the first place. The government’s decision to reject it leaves a bit of a question mark as to what exactly is going to happen in terms of home-growing in these areas. Independent Sen. Andre Pratte told reporters that while the issue was important, it “wasn’t crucial” and that the courts would ultimately make a decision later.
A spokesperson for Manitoba’s justice minister told Global News that the minister was “satisfied that provinces have the legal authority to restrict home-grown cannabis, up to and including prohibition.” He added that Manitoba would be “willing to defend our position if challenged.”
While the home-growing rule may be the biggest question on a provincial basis, there are other rules that will differ as well. Here are some important points that you want to know about what will be, and what still won’t be, allowed in your province.
- Alberta: For the most part, Alberta will follow the national rules, but you will not be able to smoke anywhere frequented by children, like playgrounds.
- British Columbia: You will have to either shop from province-run stores or online retail. You can smoke most places where you can smoke cigarettes, but not in recreational areas, parks, public transportation stops, or around children.
- Manitoba: On top of limiting home cultivation, Manitoba also prohibits smoking in public places. Private online retailers also must have a brick-and-mortar store.
- New Brunswick: Smoking is also prohibited in public places. Your home-grown plants will also need to be in a separate and locked space if you grow them indoors, or in a locked enclosure with a height minimum of 1.52 meters outdoors.
- Newfoundland: Smoking here is prohibited in public places. If you have no private storefronts near you, you can use online, province-run dispensaries. One major difference here is that your possession amount is 30 grams total, not 30 grams in public like many other provinces.
- Northwest Territories: Smoking is prohibited in public spaces.
- Nova Scotia: You can smoke anywhere that cigarettes are allowed.
- Nunavut: Home growing is restricted, but you can smoke anywhere cigarettes are prohibited. You can buy from private dispensaries if they are acting on behalf of the Nunavut government.
- Ontario: Smoking will be prohibited in public places, and currently, cannabis will only be purchased from province-run dispensaries or online. However, that may change in the future.
- Prince Edward Island: Smoking is mostly prohibited in public places, with a few exceptions, such as multi-unit dwellings. If you home-grow, you will need to make sure that your plants are kept away from children.
- Québec: This province probably steers the furthest from the federal rules. Home-growing cultivation is prohibited, but you can smoke anywhere cigarettes are allowed. At the moment, you are allowed to have 150 grams total as a possession limit, with the maximum in public yet to be determined.
- Saskatchewan: Smoking is prohibited in all public places, and all private online retailers need to have a brick-and-mortar storefront as well.
- Yukon: Smoking will be prohibited in public places. At the start, the only place you will be able to purchase legally is through one province-run dispensary in Whitehorse. Private retailers and online options will open up sometime afterward, six months-post legalization at the minimum.
There are other laws orbiting legalization that are in a bit of limbo as well, like Bill C-46. This bill would allow for new powers for police and overall harsher punishment for driving impaired under the influence of alcohol or drugs. Detractors of marijuana legalization have pointed to public safety as one of their prime concerns, especially with regard to driving.
One particular point of contention that came up in the Senate was the ability for police to force drivers to submit to random breath tests, without any suspicion of impairment. Again, a Senate amendment took this out and was then rejected by the government. With the House of Commons having risen for the summer, we won’t get a resolution on this piece any time soon.
When we talk about revisions to marijuana legalization in Canada, there are likely going to be a lot of different changes like these going on. It’s going to be important to follow the news for both the country and your province to see if smaller details change as we get closer to October.
Support for Marijuana Legalization in Canada
A bill of this magnitude, for a country with the international and economic presence of Canada, would never be able to take place without some favorable public opinion. Even though not everyone is on the bandwagon when it comes to legalized marijuana in Canada, in the recent years and decades, we can see a big change in attitudes toward legalization and marijuana in general.
One example can be found in a survey that covered both Canada and the United States, which currently has legalization in some states but not all. This survey focused less on demographics and more on beliefs and attitudes, to determine the potential size of the cannabis market in these countries. The study showed that overall, 84 percent of Canadian adults favored legalizing marijuana in some capacity. Notably, many participants in the survey mentioned having used marijuana illegally in the past, which may have impacted their answers.
Overall, 20 percent of the Canadian respondents said that they had used medicinal marijuana in the past, and 32 percent mentioned being open to cannabis consumption in the future versus 47 percent who said they were not. This leads a pretty sizable group of abstainers who may be swayed one way or the other. Notably, despite having made it further in terms of legalization, it appeared that many Canadians had fewer options and information overall than Americans. It will be interesting to see how that metric changes, say, a year from now.
Other polls centering on Canadian attitudes towards legalization specifically, showed that while fewer Canadians may be interested in marijuana use recreationally, they overall still support legalization. One Ipsos poll showed that 61 percent of Canadians believed that pot should be legalized. This number grew to 73 percent among millennials (defined as 18-34 for this survey).
“[Canadians] have been on board with the [legalization] for a long time,” said Darrell Bricker, CEO of Ipsos Affairs. “To be clear, what they are on board with is the idea that people should not be going to jail or have a criminal record because of the fact they are using pot personally.”
15 percent of respondents said that they currently use marijuana in some capacity, while 26 percent said they would be interested in using it if it becomes fully legal. Notably, in some areas, the majority actually deviates from Bill C-45. For example, nearly half of those polled supported the minimum age being set at 21, versus only 23 percent who wanted the set-upon age of 18. Bricker notes that this may be influenced by older Canadians, who may be okay with seeing pot as legal, but still want there to be restrictions, as opposed to something you see every day.
So, what exactly is driving the interest in legalized marijuana to this degree? Chances are, you’ve probably already heard about the medicinal potential of the plant, but for the most part, it appears that it’s ultimately the financial potential that has the general public the most interested. In 2016, it was estimated that the legal market for recreational marijuana could give Canada’s economy a boost of up to $22.6 billion annually. This includes growing, distribution, taxes, and tourism. Tourism is a surprising potential boost, but Canada having a fully legal market would be in a prime position, considering its neighbor to the south.
Speaking of the U.S., examples like Colorado’s legalization of marijuana may have potentially swayed the financially-minded who were suspicious about how much money there was in legal marijuana. The State’s legal marijuana industry brought in $1.51 billion sales of medical and recreational cannabis, edibles and concentrate products during 2017, according to government data. One thing is clear—you don’t have to be a cannabis user to be a cannabis supporter.
Which Marijuana Stocks Will Benefit from Canada’s Legalization?
When we talk about profits from marijuana legalization in Canada, most people think of the “feet on the ground” so to speak: like the retailers who sell cannabis as well as those in adjacent industries like delivery services. However, with nation-wide legalization, in the eyes of investors, Canada may have just become the epicenter of the “green rush” over the U.S. With legalization on its way, there are a few notable marijuana stocks that suddenly became a lot more appealing.
One example is the leader of the pack in terms of stock by market cap, Canopy Growth Corp. Last year, it started growing, possibly in anticipation of legalization, by acquiring Mettrum Health. This put Canopy in the driver’s seat when it comes to the medicinal marijuana consumer base, having access to about half of all of the users and putting two unique brands in its portfolio.
While Canopy is growing through acquisition, two other major Canadian marijuana companies are expanding through more conventional methods, and their marijuana stocks are every bit as appealing. Aphria made an announcement in January that it was ready to increase its square-footage capacity for cannabis growth from 300,000 to 1 million. Completion of the project will coincide nicely with October’s final legalization date.
Aurora Cannabis has also been working on an expanded cannabis production farm since 2016. The 800,000, square-foot facility known as Aurora Sky, promises to be the most advanced farm of its kind in the world. It also acquired a 40,000-square-foot production facility in Québec to handle short-term increases in demand.
History of Medical Marijuana to Recreational Legalization
To put things in perspective, the passage of the Cannabis Act closes the door on almost 100 years of prohibition, dating all the way back to 1923 and the introduction of the Act to Prohibit the Improper Use of Opium and Other Drugs. This would stay the norm with few changes until 1996, where a man named Terrance Parker was arrested for possession, cultivation, and trafficking for using cannabis to treat his seizures. Parker would appeal his case, and in 2000, cannabis prohibition was rendered unconstitutional. This would lead to the first rendition of the country’s medical marijuana laws, which allowed patients and growers with licenses access to cannabis.
While several decriminalization initiatives would fail in the following years, in 2013, the government introduced the Marijuana for Medical Purposes Regulations (MMPR), creating a commercially licensed industry for the medicinal marijuana.
In 2016, following another appeal by a cannabis baker charged with possession, the rules were changed again, with Canada’s Supreme Court ruling that restricting access to dried cannabis flower violated the constitutional rights of patients. Those with licenses could now produce cannabis oils, and patients could possess different forms as they wished. This would be the precursor to 2017’s introduction of the Cannabis act.
Whether you plan on adding marijuana to your health regimen, are a recreational user looking to enjoy yourself openly, or are a member of the business community excited for an explosive new market to open up nationwide, there are plenty of reasons to keep your eye on the path to marijuana legalization in Canada. With no roadblocks in the way, there’s all the more reason to keep an eye on marijuana companies like BC Bud to know where to buy from when October comes.