Is Marijuana Legal In Canada?
No, Marijuana is not legal yet in Canada but with the third and final Senate reading of the Cannabis Act, aka Bill C-45, scheduled for June 7th, legalization could become a reality in 2019. However, even though the final voting step to legalize marijuana could be completed this Thursday, there are still a number of hurdles that have to be overcome before the average Canadian can legally grow or consume marijuana.
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.
After the Senate Vote the Bill Needs to Go Back to the House of Commons
The Senate passed a few changes in early June so even if the bill passes third reading on June 7th it will have to go back to the House of Commons for the changes to be approved.
The House of Commons will be in session Friday so could approve the changes then, or if they object, the bill could spend up to a few weeks bouncing between the Senate and House before disagreements are worked out.
After Bill C-45 passes the Senate and the House it must be signed by Governor General Julie Payette. Her signature serves as 'Royal Assent' because the governor general is technically appointed by the Queen of England to sign in her name. This should only take a day or two.
The Marijuana Bill Will Take Minimum 3 Months to Become Law after Royal Assent
Even if Bill C-45 passes the Senate's third reading and the House of Commons, 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.
So, when will marijuana be legal in Canada?
Grizzle thinks the administration of Justin Trudeau will push the true legalization of marijuana, called coming into force, in mid-September (at the earliest), 3 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 September 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 passes the Senate tomorrow, which Grizzle considers very 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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