What to Expect In the Early Stages of Legal Recreational Marijuana in Canada

On October 17, 2018, Canada became the first G7 nation to legalize recreational marijuana usage at the federal level. The change, which affects adult cannabis users only, has been anticipated for months. Necessarily, there have been preparations for the regulatory shift in a wide variety of ways: companies began to conceive of new ways to operate, government officials took steps to ensure that the new legal cannabis industry would be properly regulated, and some of those opposed to marijuana usage spoke out about the impending changes. It would be easy to assume that the situation would be set as of October 17th. However, the reality is that there are probably many more shifts to come as the legal cannabis industry in Canada takes off. Below, we'll explore some of the likely early impact points.

One of the most basic components of the marijuana industry has been put to the test since the advent of legal cannabis products: marijuana itself. The Canadian law legalized only certain cannabis products as of October, with others set to be legalized at a future date. Already, reports have emerged that supplies of marijuana and related products have not been sufficient to meet with demand among Canadian consumers.

As time goes on and the market settles, it's likely that growers and distributors will come to a better understanding of how much product will be necessary to meet demand. Nonetheless, with certain cannabinoid products only slated to become fully legalized in 2019, there may be shifts for many months to come.

Along with these shifts, customers should watch out for potentially dramatic changes in the price of products, too.

Just because cannabis was legalized at a federal level does not mean that it was legalized equally across Canada. Indeed, each of the country's providences has a high degree of authority over the specific regulations of cannabis products. These regulations may very well change as time goes on, particularly if it becomes clear that some parts of the country have a more desirable constellation of regulatory practices in place than others. From the government's perspective, there is ample money to be made off of the legal cannabis industry; this can take the form of taxes on sales, fees for licenses for producers, costs of housing product and much more. Expect that, as the industry continues to grow, individual providences will adjust their approach in order to find an optimal balance of these factors.

It's likely that legal questions will also extend to individuals in Canada with prior criminal records related to marijuana. There has already been a suggestion that Canadian legislators will consider retroactively addressing individuals with marijuana-related crimes after legalization. The exact timing and form of such a process, however, remains unknown.

There has long been discussion of legalizing marijuana in the United States. Nearly two dozen states have moved to legalize cannabis, either for recreational, medicinal, use or both, and in certain situations and quantities. Expect that Canada's legalization procedure will put increased pressure on governments in other countries, and perhaps most specifically in the United States, to consider a similar proposition. This pressure may come not only from marijuana advocates but also from the business world as well, especially if Canadian companies seem to perform exceptionally well as the legal cannabis industry there grows.

Canada's move to legalize marijuana marks a dramatic shift for the country, with legal, financial, and other repercussions. While the impact of the regulatory change is undoubtedly going to be significant, no one can predict exactly how it will take shape over time.