On April 13, the Canadian government unveiled a bill to legalize cannabis by July 1, 2018. In the US, however, laws are still a little murky.
The cannabis industry has no doubt taken on a life of its own in recent years. Now that legalization is taking shape at a federal level–at least in Canada–the tide has officially begun turning for growing sector.
On April 13, the Canadian federal government finally announced its much anticipated bill to legalize recreational use of cannabis by July 2018. In particular, the bill follows many of the recommendations made in the federal task force, released in late 2016.
Indeed, Canada’s decision to legalize marijuana recreationally certainly sets the framework for other countries around the world following suite. In fact, Canada is the first developed country to fully legalize marijuana since the war on drugs started in the 1970s. Uruguay is the only other country in the world that allows recreational use of marijuana.
With that in mind, here’s a look at some of the rules surrounding legalizing marijuana in Canada–and if the US will be the next to do so.
Legalizing marijuana: Canada a go
As mentioned above, the framework for legalizing marijuana in Canada will follow a number of the recommendations made in the task force released in November, 2016. This also means significant policy changes for Canadian public health and safety.
The bills, introduced in the House of Commons by Justice Minister Jody Wilson-Raybould, Public Safety Minister Ralph Goodale, Health Minister Jane Philpott, and Foreign Affairs Minister Chrystia Freeland, first establishes a minimum age of 18 years old to purchase marijuana.
Of course, laws surrounding framework for production, sales, distribution and possession of marijuana are also part of the suite of bills: individuals over the age of 18 will be able to possess up to 30 grams of dried marijuana, or its equivalent, in public settings. Residents will be able to grow up to four plants per home, in addition to making legal-cannabis products.
The federal government has also propositioned a change to the Criminal Code to punish those who attempt to provide youth under the age of 18 with marijuana, or sell it outside of the new legal regulations.
The Globe and Mail stated that the legislation would put in place new criminal offences, including a maximum penalty of 14 years to anyone who sells or provides marijuana to a minor.
On that note, there are currently 42 companies that have been authorized by Health Canada to produce medicinal marijuana across the country. The Globe and Mail wrote that the federal government will need additional staff and resources to “speed up the approval process” for new producers looking to come online.
With that in mind, the world’s first cannabis ETF was launched in Canada in early April. Horizons ETF Management inaugurated the Horizons Medical Marijuana Life Sciences (TSX:HMMJ) on the Toronto Stock Exchange, with 14 marijuana stocks included in the fund, at least for now.
Indeed, there’s plenty to look forward to with legalizing marijuana in Canada, and new companies will no doubt be chomping at the bit to get in on the action.
Legalizing marijuana: is the US next?
Down in the US, however, laws for recreational cannabis in the US are still a work in progress. That said, it is legal in eight states while 28 have some form of medical marijuana. Even though cannabis remains illegal at a federal law, Canada’s legalization could very well be the push the US needs to follow in the same steps.
That said, it is important for investors to understand the legalities surrounding the medical cannabis and hemp industries. One key point is that regulations in Canada and the US differ from the municipal, provincial and state levels to the federal level.
Despite having low levels of mind-altering THC, hemp has been lumped into the same category as marijuana in the US, and is classified as a Schedule 1 drug under the Controlled Substances Act. Previously, the US allowed patients with a variety of medical conditions to smoke marijuana in a variety of states since 1996, and four states have voted to allow the sale and distribution of marijuana. However, that number is now growing.
Still, under a Donald Trump presidency, the laws are still murky: there’s no signs indicating that will happen any time soon.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.