What Canadian Laws Mean for the Marijuana Stock Market

canadian marijuanaMarijuana Stocks Are Under the Government’s Thumb

Canada is going to be the first western nation to totally legalize recreational and medical marijuana on a national scale. As such, many investors are rightfully treating Canada as a guinea pig of sorts to see how arduous the process of legalization is and what the ultimate effects on the marijuana stock market will be as a result.

Obviously, as you would expect, legalization is good for business. Unless you know a way to invest and trade in roving illegal gangs, sellers, and importers (probably not a good idea, even if possible), then investors have for a long time been shut out from getting in on the recreational marijuana market.

But with Canada’s laws set to be put in place by next summer, we’ll be able to invest in the recreational marijuana market for the first time on a national scale. (Source: “Liberals to announce marijuana will be legal by July 1, 2018,” CBC, March 26, 2017.)

That explains why many companies that are on top of the marijuana stock market are companies based in Canada.

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But that brings us to another interesting crossroads. Namely, what sorts of laws will develop around Canadian marijuana sales. Much like other countries and states that have legalized the drug are serving as models for Canada, the Great White North is also likely to serve as an example for other countries looking to progress towards full legalization.

With most countries moving towards either partial or full legalization of marijuana, at least as seen by the less aggressive laws being put in place and increasing acceptance of medical weed, how Canada frames its laws could have a profound effect on the future of industry.

This means that Canada may be the first mover in a lot of ways that may eventually be emulated by other countries down the line, so marijuana stock market players should take note.

Canadian Laws, Marijuana Stock Market Implications

Canada has a bunch of restrictions when it comes to alcohol marketing.

For instance, alcohol cannot be shown to liven up a party, or be used by role models like celebrities and athletes, or even be consumed on air. (Source: “Marijuana marketing: Alcohol industry calls for restrictions,The Globe and Mail, April 6, 2017.)

The marketing restrictions are largely aimed at preventing exposure to children, thus prohibiting ads showing drinkers having too much of a good time.

And the booze industry in Canada wants to see marijuana subjected to the same rules.

The marijuana stock market would be wise to follow how this seemingly small legal dispute plays out because there’s a larger question at play: Is marijuana better, worse, or just as bad as alcohol?

Now, studies will show a million different health conclusions regarding marijuana, but what’s more important here is the perception of lawmakers and their constituents. If marijuana is treated like alcohol when it comes to marketing, then it would make sense that pot would face similar restrictions in terms of who sells it, age conditions, and store hours etc.

If the marijuana marketing law comes down on the side of the alcohol business, that will be a good indicator of how the nation will treat the drug in other areas as well. Additionally, the move will also be cited by those who wish to seek similar treatment in other nations when and if they join Canada in legalizing pot.

So keep your eyes on Canada, marijuana investors. It’s going to be an interesting time for the marijuana stock market.