The road to recreational legalization hasn’t always been smooth – in fact, it’s been full of potholes – but here are the key moments in Canadian history that have brought us to where we are today: leading the world in cannabis reform. From outlawed cash crops to the many acronyms that lead us to ACMPR, the country’s current legal medicinal marijuana program, let’s learn about Canada’s history with cannabis.
History of Cannabis in Canada
First believed to be used by Indigenous communities for cultural, medical and textile purposes, cannabis was a cash crop for settlers long before Canada was officially a country. That’s right, the first settlers to Canada were growing the stuff like a, well, weed. Then, everything went up in smoke in 1923 when it was outlawed without parliamentary discourse, a full 14 years before the U.S. criminalized the plant. Without parliamentary or public debate, “cannabis indica (Indian hemp) or hasheesh” was added to the Opium and Narcotic Control Act alongside two other new entries: heroin and codeine.
This harsh ruling wasn’t questioned or addressed until 1969, when the Commission Of Inquiry Into The Non-Medical Use Of Drugs was launched. Better known as the “Le Dain commission” after chairman Gerald Le Dain, it examined whether there is “well-founded social concern” about the non-medical use of cannabis, and how that concern should be expressed in social policy.
In 1972, the commission advised for the decriminalizing of simple possession and cultivation for personal use. Even though it called cannabis-related penalties “grossly excessive” and “completely unreasonable,” nothing changed.
Medical Cannabis Legalization
Here’s a name you should know: Terrence Parker. While not a household name, he was instrumental in spearheading the right to access medicinal cannabis, after a series of landmark legal battles for patients’ constitutional rights.
The epileptic man was arrested and charged with possession numerous times dating back to 1987. Parker had tried conventional medication and undergone surgery to help with his condition but found that smoking cannabis was the only treatment to drastically reduce his seizures.
Since he was unable to access cannabis, he grew the plants himself. The R. v. Parker case eventually landed in the Ontario Court of Appeal, which ruled that prohibiting Parker from owning and growing cannabis for personal use to treat his condition deprived him of his rights to liberty and security. This precedent finally overruled marijuana prohibition in Canada for medical users.
The federal government launched the Canadian Medical Marihuana Access Regulations (old-timey spelling intended) back in 2001. The MMAR program granted legal access to cannabis for Canadians who couldn’t find relief through conventional treatment. This meant patients had to get authorization from a doctor in order to grow their own cannabis, or they could get it directly from Health Canada.
The MMAR eventually became the Marihuana for Medical Purposes Regulations (MMPR) in 2013. Under the new system, Health Canada regulated but didn’t supply or distribute cannabis. Here’s how it worked: Patients got medical documentation from a doctor and then bought their cannabis through government-licensed producers. Health Canada’s responsibility shifted to ensuring product quality and safe facilities rather than distribution. And Canada’s commercial cannabis market was born.
In 2016, the system changed once again as a result of a court case. In Allard v. Canada, the court ruled the MMPR violated Canadians’ right to reasonable access to marijuana for medicinal purposes. That lead to yet another medical cannabis program, along with a whole new set of acronyms.
The new Access To Cannabis For Medical Purposes Regulations (ACMPR) doesn’t change the role of doctors, and patients still have access to licensed producers. But enrollees who want to grow their own plants must now register for a license. The number of plants patients can grow depends on their prescribed dosage and the average amount produced by a cannabis plant. Every gram of prescribed dried cannabis equals five indoor plants, or two outdoor plants.
The government even has a nifty calculator to help you figure it out. LPs are still the only legal source of cannabis products while dispensaries and compassion clubs remain illegal but also ubiquitous, especially in populated regions.
Recreational Cannabis Legalization
Despite the abundance of dispensaries in major cities across the country, and the skunky smell wafting across public parks on sunny days, cannabis has been illegal in Canada for 95 years. However, since the Cannabis Act passed in senate on June 19, 2018, cannabis for recreational use is officially legal on October 17, 2018.
After October 17, Canadians of legal age, which varies in each province, will be allowed to access fresh or dried cannabis strains and cannabis oil from a provincially or territorially regulated retailer, as well as plants or seeds if the province or territory allows home growing.
In regions that have yet to authorize retailers, those of legal age will be able to buy product directly from a provincial wholesalers online and it will be mailed to their home address.
Adults of legal age can have up to 30 grams of legal cannabis in public, and can share that same amount with other adults. Canadians will be able to grow up to four plants per household, and will continue to be allowed to make their own edibles for personal use.
The rise of Canadian cannabis stocks
Canopy Growth was Canada’s first cannabis company to graduate from the Toronto Venture Exchange for emerging companies to the Toronto Stock Exchange. In July 2016, they staked their claim to the ticker symbol WEED and began trading at around $2.80.
Originally called Tweed Marijuana Inc., Canopy now owns and operates a number of subsidiaries including Tweed, a medical and recreational cannabis company with 450,000 square-feet of production facility in Smiths Falls, Ontario, as well as Bedrocan and Mettrum. Canopy’s Tweed Farms also includes a greenhouse approximately twice that size located in Niagara-on-the-Lake, Ontario’s wine country about an hour’s drive south-west of Toronto.
In November 2016, after news that eight American states were planning to legalize cannabis, the company reached “unicorn” status – the elusive billion-dollar market capitalization. (Market cap is the value of a company as calculated by multiplying the number of shares by each share’s dollar value). In the summer of 2018, Canopy was valued at a whopping $6.6 billion—peaking at $37.48 on January 19, 2018—even though profits continue to elude the company.
In its 2016 report about recreational marijuana, Deloitte estimated the potential base retail market size to be as high as $5 billion per year post-legalization. But weed stock investment critics, on the other hand, compare the high valuations of Canadian cannabis companies to the dot-com bubble, particularly when weed stocks take a periodic nosedive.
There are lots of variables that can throw market speculation off-track. Demand for cannabis could be much lower (or much higher) than experts have anticipated. Potential international markets for medical cannabis revenue such as Germany and Israel haven’t officially signed on quite yet.
The much-maligned black market, which thus far has been the sole supplier of recreational cannabis to the Canadian masses and still provides to many who consume for medical purposes, may be priced lower than companies that comply with Health Canada’s long, expensive list of regulations.
So the black market could continue to divert potential revenue even after legalization. But these risks haven’t discouraged entrepreneurs from taking their burgeoning companies public. As of April 2018, there were 84 publicly traded cannabis companies on Canadian stock exchanges and four Exchange Traded Funds (ETFs)—a portfolio of stocks listed under one name.
Which weed stocks to watch for
Throughout the lead-up to legalization, economists are predicting a flurry of mergers and acquisitions that could contribute to stock price volatility. The Canadian Marijuana Index tracks 25 cannabis stocks. Canopy’s competition includes Aurora (ACB.TO), Aphria (APH) and Cronos (MJN.V), each with a market cap of $4.65 billion, $2.13 billion, $1.95 billion and $1.17 billion respectively.
In February 2018, Toronto-based Cronos Group—which owns medical cannabis brand Peace Naturals, among others—became the first cannabis company to get listed on the Nasdaq, a move they said was motivated by wanting to make it easier for American investors to get in on the action. A few months later, Canopy landed on the New York Stock Exchange.