Canada Goes Green as Senators Approve Recreational Marijuana Bill

Canada will become the first G7 nation to legalize recreational marijuana after a Senate vote Tuesday night cleared the final hurdle to a ceremonial approval later this year.

Canada Goes Green

The upper chamber voted 52 to 29 in favor of passing Bill C-45, a controversial proposal to end the generational ban on recreational pot. The Senate passed the bill mere days before a Parliamentary recess began, paving the way for implementation by the end of summer.

It is unclear when Bill C-45 will receive ceremonial approval by the governor-general – the final step before it becomes law – although ministers said an additional 12 weeks beyond that may be required before retail sales begin.

Prime Minister Justin Trudeau took to Twitter Tuesday to announce the Senate’s decision:

“It’s been too easy for our kids to get marijuana – and for criminals to reap the profits. Today, we change that. Our plan to legalize & regulate marijuana just passed the Senate. #PromiseKept.”

Investors Look to Get High on Canadian Weed

The Senate’s decision makes the world’s eleventh-largest economy an attractive destination for yield-seeking investors looking to capitalize on an industry with high-growth potential.

Canadians spent $5.7 billion on marijuana last year, according to the government’s top statistics agency. The nation’s 5 million pot consumers doled out an average of about $1,200 on the green plant and its derivatives, with 90% of the proceeds going to the black market. By comparison, Canadians spent just over $22 billion on alcohol and $16 billion on tobacco products.

This year, Canadians are expected to consume about 474 metric tons of marijuana flower, according to GT Research, a cannabis analytics company. Consumption is expected to reach roughly 861 metric tons in four years.

Research from Deloitte suggests legal pot sales in Canada will exceed $7 billion. However, the economic footprint is expected to be much larger. When factoring direct and indirect activity, legal weed could generate up to $22.6 billion in economic value.

The end of prohibition, once confirmed later this year, will take the weight off marijuana producers that have wagered big on legalization. After a flurry of consolidation domestically, Canadian producers are now setting their sights on countries like Italy, Spain and Colombia for expansion.

The Canadian weed landscape has experienced “merger madness” over the past 12 months, with larger firms snatching up smaller players in a series of moves. Aurora Cannabis Inc. (ACB) recently acquired MedReleaf Corp for $2.9 billion. In January, it agreed to buy CanniMed Therapeutics Inc. for $1 billion.

Canada is now home to over 90 publicly-listed marijuana producers collectively valued at more than $31 billion. The top-24 producers capture about 88% of that market. The biggest pot stocks are listed on the Canadian Marijuana Index, which is nearly four times bigger than the U.S. index despite America being ten times greater in size.

Featured image courtesy of Shutterstock. 

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi