Cannabis stocks fall on Trudeau legislation for legal pot

Marijuana stocks declined after the Trudeau government tabled legislation to create a “strict legal framework” for the use and ownership of marijuana.

Canopy Growth Corporation (TSX: WEED), Canada’s leading cannabis stock, was down 3.78% as of Thursday afternoon to $9.98 per share. Horizons’ medical marijuana ETF (TSX: HMMJ) was down 3.62% to $10.91 per unit.

Adults aged 18 and older will be legally allowed to buy and cultivate a limited quantity of marijuana for personal use, according to the suite of bills introduced by Justin Trudeau’s Liberal government.

The new bills would, once passed, establish a “strict legal framework” for the production, sale, distribution and possession of pot, and make it a specific criminal offence to sell cannabis to a minor.

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Adults over 18 would be allowed to possess up to 30 grams of dried cannabis or its equivalent in public, share up to 30 grams of dried marijuana with other adults and buy cannabis or cannabis oil from a provincially regulated retailer.

They would also be permitted to grow up to four plants per residence for personal use, as well as make legal cannabis-containing products at home.

Penalties for illegal pot possession, production, distribution and sales would range from a ticket to a maximum of 14 years in prison.

The government says it intends to bring other products, including pot-infused edibles, into the legalized sphere once federal regulations for production and sale are developed and brought into force.

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Under the proposed Cannabis Act, it would remain illegal to import cannabis and cannabis products, and to export them without a valid permit. Permits may be issued for certain purposes, such as medical cannabis and industrial hemp.

The government also aims to establish “significant penalties” for those who engage young Canadians in “cannabis-related offences” and a “zero-tolerance approach” to drug-impaired driving, along with a “robust” public awareness campaign.

The RCMP and the Canadian Border Services Agency plan to work together, along with local police, to uphold laws governing illegal cross-border movement of cannabis.

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It would also provide additional investment for licensing, inspection and enforcement challenges.

Provinces, territories and municipalities would be able to tailor rules for their own jurisdictions, enforcing them through mechanisms such as ticketing.

They will also be permitted to set their own licensing, distribution and retail sales rules, establish provincial zoning rules for cannabis businesses and change provincial traffic safety laws as they deem necessary.

Once passed, the Liberal bills introduced today would make Canada the first member of the G7 to legalize marijuana for recreational use across the country.