Why Is Recreational Marijuana Legalization Delayed?
Canada has delayed its recreational marijuana legislation and marijuana stocks have taken note. The legislative dealings surrounding the Canada marijuana legalization process have led to a longer-than-expected timeline for pot to be available in all forms to Canadians.
Initially, the drug was meant to be fully legalized by early summer. It’s looking now like that date will be pushed back to at least August, perhaps as late as mid-fall.
With this bit of news, you have panicked voices asking, “Is weed legal in Ontario?” and “Is weed legal in Toronto?” concerned that the delay will affect the overall legislation.
But I can douse those fears now: the Canada marijuana legalization process is still bearing ahead—perhaps not at full speed, mind you—and it is still very much a federal initiative. The delay affects absolutely nothing in terms of how the law will be applied on a municipal or provincial basis unless provinces or cities pass their own separate regulations.
It’s also worth bearing in mind that medical marijuana is unaffected by this delay, meaning that marijuana stocks in Canada are hardly rudderless and adrift while they wait on the slow-moving beast that is federal politics.
Speaking of federal politics, political gamesmanship is largely being blamed for the delay.
The Conservative Party in Canada was able to put up a roadblock through the largely symbolic Senate, or Upper House of government in Canada. In Canada, unlike the U.S., the Senate is not democratically elected and instead are appointed to the house largely as an honoring gesture. Traditionally, the Senate has abstained from doing more than rubber-stamping bills that make it through the democratically elected Parliament.
In this case, however, Senate conservatives were able to rally and delay the bill. They could also amend the Canada marijuana legalization bill and send it back to Parliament, possibly delaying the bill even further, but that is an unlikely outcome.
The bottom line is that the bill is being delayed so that conservatives can make political hay out of the resulting stumbling block. With the Canada marijuana legalization bill still a somewhat hot-button issue among certain demographics in Canada, the delay can be seen as a way to bolster election outcomes, with the most pressing one being a provincial election in Ontario.
“I am pleased to say that we secured time that will allow the Senate to have a thorough evaluation on the marijuana legislation,” Conservative Senate leader Larry Smith said in a statement following news of the delay. (Source: “Senate deal to vote on pot bill on June 7 means no sales before August,” The Toronto Star, February 15, 2018.)
“The official Opposition in the Senate has been clear from the beginning, we want to review the wide-ranging concerns and voids in this legislation, instead of rushing this through only for the sake of a political deadline set by the Trudeau government.”
The end result, however, will still be a Canada marijuana legalization bill becoming the law of the land. There’s no stopping that now. The question is when. And it is very much the billion-dollar question. There’s a lot of money on the line, tax revenue to be gained, and—most importantly for you, dear reader—marijuana stock value to be bolstered.
The sooner the bill passes, the better for marijuana stocks. That means that hopefully, this political back-and-forth is resolved as quickly as possible.
It’s also worth noting that there will be some knock-on effects that come as a result of this legislative delay.
For instance, anyone who rented out storefront space in anticipation for an early-summer legalization window will be paying rent but receiving no revenue. (Source: “Delay in opening pot stores will allow fine tuning, corporation says,” CBC, February 20, 2018.)
Hiccups like these can impact quarterly reports, projected earnings, and therefore stock value. But dips will likely only be temporary, so if there’s one thing to take away from this piece, it is this: don’t panic. The Canada marijuana legalization bill is on the way and while stocks may be hurt by the extended timeline, this will not by any means be deadly.
Canadian Marijuana Legalization Date
As mentioned before, there is no hard and fast date to mark down on your calendar in regards to marijuana legalization.
At the moment, the best-case scenario will see pot on store shelves by August.
But the legislative process involves the bill being passed by the Senate and Parliament, and then be given royal assent.
The royal assent part will come almost immediately, but then the problem is that provincial and territorial governments will need eight to 12 weeks after royal assent to prepare for retail sales.
It’s that four-week window that really complicates the whole process.
But in the end, it’s almost a certainty that recreational marijuana legalization in Canada will be national law by fall 2018.
This delay is not good news for the marijuana industry, but it’s not apocalyptic either.
Marijuana stocks may take a few hits as a result of the roadblock but make no mistake about it, legalization is coming and it will be a huge boon (at least in the immediate aftermath) for most marijuana stocks provided the numbers come in as anticipated.