William SumnerThe nation of Canada is on the precipice of a historic moment as the country’s legislature stands poised to pass cannabis legalization. On June 7, 2018, the Senate will hold a vote on Bill C-45, a measure legalizing recreational cannabis nationwide.
If passed, Canada will become the first G7 nation to legalize cannabis for recreational purposes and could potentially usher in a boom of economic activity. A new report from Stifel said, “We estimate a total medical market opportunity of $1.3 billion CAD and a recreational opportunity of $8 billion CAD (retail sales). We believe the domestic wholesale market opportunity for Licensed Producers (LPs) in Canada will be closer to $5 billion CAD in total value, which is a much smaller opportunity than what we believe the frenzy around Canadian marijuana stocks seems to imply.”
However, while many industry insiders already consider legalization a sure bet, the passage of Bill C-45 is far from a done deal. According to CBC, a flurry of last-minute amendments have been added to the bill which could gum up the legislative process.
For example, one amendment submitted by the Senate’s social affairs committee passed would allow provinces to decide for themselves whether or not to allow home cultivation, an idea that Prime Minister Justin Trudeau has dismissed. Both Quebec and Manitoba have expressed interested in banning home cultivation, so if the amendment was included in the final legislation, at least two provinces would ban the practice.
Furthering clouding the outcome of the upcoming vote is the question of whether the legislature’s Indigenous senators would support the bill. Previously, some Indigenous senators have complained that the legislature did not adequately consult with the First Nations, Metis or Inuit. If the Indigenous senators pull their support from Bill C-45, the legislation could fall short of passing.
Should the measure pass in the Senate, it would then go on to the House of Commons for approval. Dominated by the Liberal Party, there is a strong possibility that they will reject some of the amendments proposed by the Senate, such as the home cultivation provision, which could set the stage for a stand-off between the two houses of government.
Speaking with CBC, MP Marie Ginette Petitpas Taylor expressed confidence in the measure while acknowledging that some more legislative work may need to be done.
“We’re confident with Bill C-45. However, we recognize that the Senate has done some work and I’m looking forward to seeing the recommendations that they bring forward,” said Petitpas Taylor. “[After the vote] we’ll be able to evaluate what the results are and from there … we’ll be able to make a determination as to what our next steps are going to be moving forward.”
Assuming that both legislative bodies approve Bill C-45, recreational sales of cannabis would begin at the earliest by August 2018. Beyond its borders, the Stifel report also said, “Canadian companies will be well positioned for supplying international markets as they potentially develop – U.K., Germany, Australia, etc. are all markets where legalization is starting to occur and the Canadian companies are increasingly well positioned to attack these markets.”
