Canada embarks on legal marijuana: What we’re watching

Canada opened its doors to recreational marijuana Wednesday, becoming the first Group of Seven industrial nation to legalize recreational marijuana at the federal level.

While few brick-and-mortar stores were actually operational, the launch marks the start of what will eventually become a multibillion-dollar industry.

Across Canada, only about 100 physical stores were expected to begin selling recreational cannabis products on the first day of legalization – and most of those are located in the less-populated eastern provinces of New Brunswick (roughly 20 stores open), Newfoundland (20), Nova Scotia (12) and Prince Edward Island (three).

British Columbia managed to open only one store; Alberta has 17; and Manitoba six.

A store count for Saskatchewan had not been finalized before the launch, and Ontario won’t open any stores until spring.

That means most of the cannabis products sold in Canada in the coming weeks will be via provincial recreational cannabis portals.

The 100 stores are about 33% of the 288 outlets Statistics Canada expects to be open by the end of the year, while industry sources say at least another 700 could be open across the country by the end of 2019.

Licensed producers were generally not able to provide seeds to sell to people looking to grow their own marijuana in time for legalization.

Provincial wholesalers, with the exception of Saskatchewan, were responsible for procuring products from licensed producers, who have long said they expect shortages to occur shortly after legalization.

Dried leaf, pre-rolls, gels and cannabis oil will be available across most of the country.

What we’re watching in the first week:

  • Given the limited number of physical stores, online sales will be essential. Will provincial retailers be able to handle the traffic?
  • Will licensed producers defy Cannabis Act regulations on brand names?
  • How soon will we see shortages of certain products?
  • To what extent will taxes dampen competitiveness of legal sales?
  • How many illicit retailers, brick-and-mortar and online, defied provincial warning to close their doors before Wednesday’s launch?
  • Do stores have what consumers want? Or will consumers continue to turn to illicit sellers to find their desired products?
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