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 Recreational marijuana has been legalized in some U.S. states,
including Colorado and Washington, but Canada would be the first
Group of Seven country to do so nationally.
The ruling Liberal party made legalization part of its successful
2015 election campaign and Prime Minister Justin Trudeau has argued
that it will keep marijuana out of the hands of underage users and
reduce drug-related crime.
"Criminal prohibition has failed to protect our kids and communities
and we need a new approach," said Bill Blair, the government's point
man on the issue and a former police chief.
The government said it will provide details on a new licensing fee
and tax system in the coming months. Blair said Ottawa was talking
to provinces and producers to make sure the sale price will be
"appropriate."
The provinces will be responsible for overseeing and approving
retail sales of cannabis. Authorities have been battling a rise in
illegal dispensaries, particularly in British Columbia and Ontario,
for over a year.
In jurisdictions that do not put a regulated retail framework in
place, Canadians would be able to purchase marijuana online. The
minimum legal age would be 18, though provinces would be able to
raise that.
Only cannabis grown by a federally licensed producer will be
available for sale, though Canadians could grow up to four plants at
home.
Packaging would not be allowed to appeal to youth, include
endorsements, or associate cannabis with a certain "way of life,"
according to the legislation. An official panel recommended late
last year that the government require plain packaging.
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While medical marijuana is already legal in Canada, consulting firm
Deloitte has estimated annual sales of recreational marijuana could
be as high as C$8.7 billion ($6.5 billion).
Shares of marijuana producers were trading lower following the
announcement, though the stocks have seen a run-up in anticipation
of legalization.
Canopy Growth Corp fell 3.8 percent to C$9.92, though the stock has
more than tripled in the last year. OrganiGram Holdings Inc, which
has nearly doubled, fell 9.7 percent to C$2.80.
The market action was likely a "sell the news" reaction as the
legislation was largely in line with what an official task force
recommended last year, said Aaron Salz, founder of Stoic Advisory.
The legislation will be reviewed in Parliamentary committees, where
alterations could be made. But it is ultimately all but guaranteed
to pass, as the Liberals have a majority in the House of Commons.
(Reporting by Leah Schnurr and David Ljunggren; Editing by Dan
Grebler and Lisa Shumaker)
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