Is Canada Now Backtracking On Legalizing Recreational Cannabis?
Canada’s cannabis industry is booming, but Prime Minister Justin Trudeau’s government is hinting that recreational cannabis isn’t coming anytime soon.
As investors jump into Canada’s booming cannabis industry, Prime Minister Justin Trudeau’s government is hinting that recreational cannabis isn’t coming anytime soon.
These things take time… a long time
In a recent interview with Bloomberg News, Canadian Parliament’s Secretary to the Minister of Justice and head of Prime Minister Trudeau’s agenda to legalize cannabis Bill Blair confirmed a bill is due in parliament this spring.
But, it won’t be the last hurdle as ample regulatory work remains. The federal government will take its time and work with provinces, territories, and cities to build a framework and develop specific regulations.
The government is looking for ways to control production, distribution, and retail aspects of legalized cannabis while testing it for quality and keeping it out of the hands of adolescence.
We will take as much time as it takes to do it right I’m pretty reluctant to suggest a specific time frame, frankly, because I don’t know how long this will take in each of our 10 provinces and three territories. – Bill Blair
Licensed cannabis producers are in the middle of expanding their capacity and if there are significant delays, there will be a large amount of excess cannabis.
Analysts are saying that Mr. Blair’s comments suggest it’s unlikely the government will introduce a bill by June and companies with huge valuations won’t have any serious business if the recreational market takes until 2019 to become legal.
Stock prices of cannabis companies take plunge
Ontario’s Canopy Growth, which considers itself as the world’s largest medical cannabis producer had its market value plunge almost 18% between Monday’s and Wednesday morning, to around $1.53 billion. Their brand’s value took a hit of more than $300 million.
Many other cannabis stocks fell Wednesday as well, with Aurora Cannabis down 6.7%, OrganiGram at 12.6% and Supreme Pharmaceuticals falling 11.2% as of closing on Wednesday.
Analysts say traders had already priced in the expectation that these companies would be selling recreational marijuana in Canada in the near future.
If they delay, there’s going to be a lot of eggs that are going to break in this business. The valuations are extreme. – BCMI Research analyst Chris Damas