Canadian Prime Minister Justin Trudeau rolled back the public perception July 1, 2018, would be the day for Canadians to legally buy cannabis all across the country. In an interview with TVA network in Quebec, Trudeau dismissed the target date saying he was unaware how that came to be the specific timeframe for the Cannabis Act to come into effect.
Investors have been eagerly awaiting the opening of the recreational market in Canada as the industry expands and their stock picks reap the benefits of new sales.
“The date will not be July 1, I can assure you of that,” Trudeau said. “I don’t know where that date came from.” Instead of providing a specific date, the Canadian PM offered “next summer” as the potential timeline for cannabis to become fully legal.
“[I]t seems pretty on schedule for the summertime, whether that means July 1 or some point in July or some other point in the summer before or after that,” Michael Garbuz, corporate strategy and legal counsel for CannaRoyalty (CSE:CRZ; OTC:CNNRF) told INN.
Garbuz explained the leaders of the cannabis industry had foreseen the unofficial nature of the July 1, 2018, date.
“I think [Trudeau has] indicated there’s never been any sort of firm ‘we’re doing anything for a specific date or a specific time,’ Garbuz said, explaining the date had been an unofficial one.
Potential delay could come from Senate procedure
Bill C-45 was passed in parliament and moved to the Senate on Nov. 27. A group of Conservative senators had already had expressed concerns about the government’s proposed timeline.
“The Senate will bring its sober reflection to this bill and I think it’s really important to help us get this right. But we also expect to work as diligently as everyone else in the country has and in recognition that delay is unacceptable,” Parliamentary Secretary to the Minister of Justice Bill Blair warned on possibility of a delay to the government’s plans.
Deepak Anand, vice president of government relations at Cannabis Compliance, a consulting firm for cannabis companies, told INN due to the process in the Senate, legalization could face a delay.
“I don’t think it’s a matter of not getting approved to the Senate, I just think the Senate is going to take its time in approving the bill which could delay legalization if that were what to happen beyond July,” Anand said. “That’s the only risk at this point.”
Concerns on rush of cannabis getting reduced as provinces outline legislation plans
Despite some initial concerns of the proposed timeline from the federal government, Ontario, B.C., Alberta, Manitoba, Quebec, New Brunswick, Newfoundland and Labrador, Nova Scotia, P.E.I, Yukon and the Northwest Territories have all detailed their plans on the regulation of cannabis for their territories.
Another aspect that helped the above-mentioned provinces and two territories ease the burden of the new legislation was the reorganized tax plan for marijuana. Originally the federal’s proposed plan was to split the tax on a 50-50 basis with the provinces.
The provinces fought back claiming they would be the ones facing the toughest challenges of the new legislation. In the end, the agreement came to the provinces taking 75 percent of the tax revenues from cannabis according to Bill Morneau, federal finance minister.
In November the feds published their proposed approach to the regulation of cannabis document, detailing their plans on the enactment of Bill C-45. The government sought input on its proposed legislation and said it would announce the results in 2018.
When asked if the potential confusion of the dates could have a negative impact in the market, Garbuz told INN it’s hard to say what may cause things to move in the market, but added for the cannabis industry, today is “business as usual.”
“[E]veryone is on the same timeline we thought were under place and in some ways, it might be coming sooner than we think but I haven’t seen anything to indicate anything’s changed on the timing front,” Garbuz said.
When asked about the potential for the bill to get in earlier, cannabis analyst at 420 Investor Alan Brochstein told INN it was “not likely.”
“I think, more likely than not, we’re going to see this happen in July of 2018 and I don’t think anybody at this point has a date on what that’s going to be,” Anand said.While the cannabis industry was aware of the misconception behind July 1, 2018, cannabis stocks on the Toronto Stock Exchange took some small dips today.
On Wednesday (Dec. 20) Canopy Growth (TSX:WEED) closed the day with a 3.30 decrease to its share price, while Aphria (TSX:APH) and Aurora Cannabis (TSX:ACB) saw a 2.30 and 0.99 percent decrease respectively. On the other side, CanniMed Therapeutics (TSX:CMED) and MedReleaf (TSX:LEAF) both enjoyed increases in their share value, however, both were less than one percent.
The Marijuana Life Sciences Index ETF (TSX:HMMJ), which collects 10 cannabis stocks in its holdings, suffered a 1.22 percent decrease to its value.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.