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Pot primer: Your guide to legalized cannabis in Canada

Recreational cannabis is about to be legalized in Canada: We break down the most common questions: Where will it be sold? What are the rules? Where does the country go from here?

cannabis plants
In British Columbia, Canada, there is only one brick-and-mortar store officially opening on Oct. 17

The clock is ticking and Canadian cannabis legalization is on the doorstep. Simply put: it’s going to change many Canadians’ lives – from businesses to investing to technology to growers to tourism. The list is endless.

But with the potential boom comes potential pitfalls – from a possible stock bubble to impaired drivers, to police and workplace policies to hard discussions between parents and kids.

How will the country change? Will we leap, or limp over the line?

Proactive Investors put together a guide to go through the nuts and bolts questions when it comes to cannabis legalization in Canada: Where will it be sold? What are the rules? How much will it cost? What will implementation look like?

1. Where will it be sold?

The short, non-fun answer: it depends.

In British Columbia, arguably Canada’s most cannabis-friendly province and certainly the one with the most grey-market marijuana dispensaries, there is only one brick-and-mortar store officially opening on Oct. 17. And it's a town where few people live: Kamloops, BC: an interior city of 90,000 people. The population of British Columbia, by comparison, is 4.5 million. Greater Vancouver alone has a population of 2.5 million.

In short: brick and mortar stores are still to come in British Columbia. For most British Columbians on day one of Oct. 17, the rollout will be almost non-existent. 

In Ontario, Canada’s most populous province (13.6 million people), there are zero physical stores opening on Oct. 17 -- everything will be sold online via the government-run online retailer (with a $5 postal delivery charge to boot). 

The online store will be the only way for Ontario residents to legally buy cannabis for the next six months. The provincial Conservative government plans to license private companies to operate brick-and-mortar cannabis stores but they will not open until April 2019. 

The Ontario Cannabis Store will likely be the largest online seller of cannabis in Canada.

Other provinces differ: Alberta, Saskatchewan, Manitoba, Nova Scotia, Newfoundland and other provinces and territories have announced they will have physical stores, however, the rollout and implications of such stores are varied.

From a population perspective, Ontario is the province to watch. 

2. What are the rules?

Canadians will be allowed to buy limited amounts of fresh/dried cannabis, cannabis oil, cannabis seeds or cannabis plants from retailers that are authorized on Oct. 17  when Bill C-45, the Cannabis Act, becomes law.

Products, such as edibles, beverages, concentrates, etc., will not be legal on Oct. 17 but many of these are expected to be allowed in 2019.

On Oct. 17, consumers will be allowed to buy cannabis accessories including bongs, pipes, vaporizers, lockable stash boxes and grinders.

3. Will there be a supply shortage?

Probably. 

There are more than 135 publicly-traded cannabis companies in Canada. 

Aphria Inc (TSE:APH) (OTCMKTS:APHQF) has stated on record that it expects shortfalls

"There will not be any complete satisfaction by any of the provincial regulators out of the box," said Aphria's chief executive officer Vic Neufeld during an earnings call last week. 

"The pipeline fill is not going to be there. But that's just the short term."

READ: Aphria reports higher 1Q fiscal first quarter revenue and looks ahead to cannabis legalization in Canada

According to BC's Solicitor General and Public Safety Minister Mike Farnworth, it is expected that some popular strains may run dry. 

“Some strains or varieties, if they prove to be particularly popular – it’s like a small-scale winery...” said Farnworth to Global News. 

“But the reality is we will have the largest variety of cannabis products available anywhere in the country.”

4. What will happen to cannabis companies?

Labour shortages and other delays will affect cannabis supplies.

In short: there are 135 (or more) publicly traded cannabis companies in Canada, but many believe it's only a matter of time before that number becomes smaller, through consolidation and/or failure.  

"As we long maintained, the legalization of adult-use cannabis in Canada is a major inflection point for the industry and all licensed producers, Aphria included," said Neufeld.

5. What are the rules surrounding driving?

Again, it depends on where you live. Cannabis-impaired drivers can face fines, license suspensions and jail time.

Thanks to the Canadian federal government, a number of provinces will have the option of a new drug testing device in as it enforces laws about driving under the influence of cannabis.

In Quebec alone, the Public Security Ministry said in August it will offer financial support for police in Quebec who want to purchase the machines and help provide training for police to use the device appropriately.

In Montreal, it is reported that nearly 2000 officers have had training in terms of roadside detection tests. 

6. How much will cannabis cost?

Right now, that's unknown across all provinces and territories but in general, it should be between $7 and $10 a gram. A significant goal of legalization is to take down the black market, so officials are targeting a price that is competitive with illegal dispensaries and dealers but not so cheap that it encourages consumption. There will probably be a range of prices, depending on the quality of the cannabis.

In Nova Scotia, the government announced that a gram will cost anywhere between C$6.33 to C$10.99 after the Crown corporation unveiled its pricing strategy.

In New Brunswick, the price of dried flower cannabis will range from C$8.50 to C$15.50 per gram. 

Contact Katie Lewis at [email protected]
Follow her on Twitter: @kelewis

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