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Canadian senate votes to legalize recreational cannabis; product could be on retail shelves in 8-12 weeks

Canada is first major economy to vote to legalize recreational cannabis use and according to industry analysts, the Canadian cannabis industry could surpass C$22 billion in size over the coming years.
Legal cannabis sales in Canada will likely begin in 8 to 12 weeks

Cannabis could be on retail shelves in 8 to 12 weeks in Canada, as the Senate passed its final hurdle Tuesday night with a landmark vote to lift a 95-year-old prohibition on cannabis.

After seven months of study and debate, the historic vote saw Senators vote 52-29, with two abstentions, to pass Bill C-45, meaning Canadians will be able to legally purchase and consume recreational marijuana.

This makes Canada the first G7 and G20 nation to legalize recreational use federally. 

“We have seen in the Senate tonight a historic vote that ends 90 years of prohibition of cannabis in this country, 90 years of needless criminalization, 90 years of a just-say-no approach to drugs that hasn’t worked,” said independent Sen. Tony Dean, who sponsored the bill in the upper house.

“I’m proud of Canada today. This is progressive social policy."

READ: Canaccord Genuity sees major upside for Canadian cannabis as legalization of pot in Canada 'rounds 3rd base'

Canadian Prime Minister Justin Trudeau made it a campaign promise to legalize recreational cannabis. The new bill has controls in place in terms of how the drug can be grown and distributed for recreational use. 

Adults will soon be allowed to carry up to 30g of dried cannabis in a “public space." The law bans sales to anyone under 18, although provinces and territories will be allowed to set higher minimum ages.

A 2017 report by investment firm Canaccord Genuity (TSE:CF) predicted that legal cannabis prices (recreational and medicinal) would remain constant at around $8 per gram until 2019 or 2020, with illicit market prices ranging from $8-$9 per gram.

"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," tweeted prime minister Justin Trudeau.

According to industry analysts, Canada’s cannabis industry could surpass C$22 billion in size over the coming years.

The stand-off between public and private retail models

So, what does that mean for shoppers interested in purchasing recreational cannabis? Well, it depends. 

The government is currently giving the 13 provinces and territories a short period of time to get their retail systems in order and sales will actually start around September.

Individual provinces and territories in Canada will have significant power when it comes to the specifics of recreational cannabis in Canada. The nationwide maximum for personal possession is set at 30 grams.

However, other specifics, such as implementation (government-operated or private industry), the eligible age of purchase (likely 18 or 19) and home cultivation rules were all be decided on by each specific province and territory.

For example, Ontario, Quebec, Manitoba, New Brunswick, Prince Edward Island, and Nova Scotia plan to run a government public retail model that will see cannabis sales run by either the provincial government or by a province’s liquor commission. 

Other provinces, including Alberta and Saskatchewan, have gone for a private retail model, which will see private businesses control cannabis sales with some government oversight. British Columbia will be operating a hybrid model. 

Bill still needs Royal Assent

There is one last procedural item to attend to: the bill needs to receive Royal Assent, which is expected as soon as today. The Crown will have to approve the bill, by way of Canada's representative, the Governor General. 

One that is approved, the government will declare the official date legalization will come into force. 

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Canaccord Genuity Timeline

August 09 2012

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