In a “shot heard around the world” moment, the Canadian Senate has voted in favor of new legislation which ends a nearly 100-year prohibition in the Great White North and legalizes the use of marijuana nationwide, making Canada the first major country to do so. The upper chamber Senate voted 56 to 30 in favor of the new legislation on Thursday.

But it’s not over yet. Proposed amendments, including tighter advertising restrictions and giving provinces say over whether Canadians can grow marijuana at home, still need to be approved by the House of Commons. And the final step before the bill becomes the law of the land is for the bill to be granted royal assent (which is all but guaranteed).

During the 2015 general election, Prime Minister Justin Trudeau and the Liberal party behind him campaigned on a pledge to legalize recreational use of marijuana and have delivered on their promise.

Medical marijuana was legalized in Canada back in 2001. While there is not yet a clearly defined date when recreational sales of cannabis will begin, many expect the program to launch before the end of the summer, once retail systems have been ironed out and put in place.

Provincial Rules Vary

Marijuana policy will not be uniform across the country. Under the law, Canada’s 10 provinces and three territories are each allowed to determine their own regulations.

According to Cannabis Now, Ontario and Quebec are planning government monopolies on retail sales, while Alberta and Saskatchewan provinces are planning on a private industry model.  

Ontario, Canada’s most populous province, plans an initial launch of 40 government-run stores with plans to increase that to 150 by 2020. Quebec, the second largest province, will start with 20 stores and has not announced any expansion plans. These numbers fall well below experts’ projections of the number of stores required to meet consumer demand. For comparison, the US state of Colorado has more than 1,000 retail outlets.

In Quebec, proposed legislation will allow people to smoke cannabis in most places where cigarettes are allowed, while in neighboring Ontario, public consumption will be banned.

British Columbia plans on allowing for both government-run and private retailers, with the government-run dispensaries being operated by Canada’s Liquor Distribution Branch. Meanwhile, in Manitoba, the government’s liquor and gambling department will license private retailers but act as their supplier.

Home Grows Still Up In the Air

In late May, Canada’s Senate voted against a provision that would have banned home grows nationwide. Another amendment introduced, which would restrict home grows to indoors, was also rejected. Instead, the new law allows provinces and territories to decide whether or not to allow the cultivation of marijuana at home.

Demand Projections Vary

An April 2018 report from Health Canada predicts that demand for the drug will reach 1 million kilograms (2.2 million pounds) by the end of 2018. With production in April tallying around 300,000 kilograms countrywide, this implies a supply deficit of about 700,000 kilograms of dried cannabis, according to a report by Motley Fool.

“Even with domestic growers expanding their production capacity as quickly as their balance sheets will allow, it’d be a stretch to expect supply to meet demand,” writes Fool contributor Sean Williams. “Such a scenario suggests that pot stocks will see rapidly rising sales, and likely rising margins. Higher margins would be a function of steady or rising cannabis prices on a per-gram basis, as well as economies of scale working in favor of pot stocks and driving down growing costs as their operations expand.”

However, Canada’s largest licensed producers are on track to produce 1.65 million kilograms annually — a number well in excess of Health Canada’s projected domestic demand.

Here are the figures provided by Williams:

  • Canopy Growth Corp.: approximately 500,000 kilograms (kg)
  • Aurora Cannabis: 430,000 kg
  • Aphria: 230,000 kg
  • MedReleaf (NASDAQOTH:MEDFF): 140,000 kg
  • Emerald Health Therapeutics: approximately 125,000 kg
  • OrganiGram Holdings: 113,000 kg
  • Hydropothecary: 108,000 kg

Williams also points out that “these estimates could rise significantly.”

Williams cites MedReleaf as an example. “MedReleaf agreed to be acquired by Aurora Cannabis earlier this week, has 95 acres of land adjacent to its Exeter facility in Ontario. With its retrofitted Exeter facility spanning 1 million square feet and capable of 105,000 kilograms a year in production, building out this 95-acre plot could wind up yielding 150,000 kilograms or more in annual yield should demand merit expansion.”

Williams goes on to predict that supply will outpace demand. “If we were to add in the mid-tier players like Supreme Cannabis Company, Sunniva, Cronos Group, CannTrust, Cannabis Wheaton Income Corp., and the dozens of additional growers who’ve been issued a cultivation license, it’s not out of the question that production capacity by the end of 2020 could hit 2.3 million to 2.4 million kilograms on an annualized run rate,” writes Williams. “Even if domestic demand in Canada ebbs higher in 2019 and 2020, production looks to outpace demand by as much as 1.3 million kilograms, by my best estimate.”

National Amnesty

The recently launched Campaign for Cannabis Amnesty seeks to have the federal government grant a blanket pardon to all Canadians convicted of minor cannabis possession.

Having their convictions expunged, claims the group, would help members of disadvantaged communities get better jobs, have access to social services and social housing, and allow them to travel freely throughout the country. This is according to Toronto-based lawyer Annamaria Enenajor, who is one of a group of professionals and activists leading the amnesty campaign.

In its current form, the new law does not address amnesty for past convictions, which “shows that the impacts that decades of criminalization has had on individual lives are really an afterthought for the government – and it should be front and center,” Enenajor said.

“We find it particularly unjust because we know that the individuals who are most impacted by the criminalization of cannabis are people who are vulnerable members of society and marginalized and racialized members of society,” she told Al Jazeera.

According to a May 2017 survey commissioned by The Globe and Mail newspaper, the majority of Canadians back amnesty with 62 percent saying they support or somewhat support pardoning people with cannabis possession charges.

The Canadian Senate has voted in favor of new legislation which ends a nearly 100-year prohibition of cannabis in the country and legalizes its use nationwide, making Canada the first major country to do so.

The Canadian Senate has voted in favor of new legislation which ends a nearly 100-year prohibition of cannabis in the country and legalizes its use nationwide, making Canada the first major country to do so. #canada #marijuana #cannabis #legalizeit


This article by Cannabiz News editor Rick Schettino originally appeared on PotNetwork.com.