Legalization turns two in Canada

Two years ago Canada became the second country in the world to legalize the sale of recreational marijuana. Since then, the country has also paved the way for legal edibles, cannabis-infused beverages, and vape pens, but the newly legal cannabis market is struggling with some difficulties despite the initial investor madness for marijuana stocks. With Canada being the first major country to fully legalize weed, governments around the world have been following with great interest over the past two years how the legal pot market there began to develop and making notes of when the time might come to allow recreational marijuana sales in their respective countries. A pandemic sales boom Consistent with public opinion, Canadian lawmakers tackled legalization in late 2017, while the measure went into effect on October 17, 2018, after passing both the House of Commons and Senate. A total of 507 producers have obtained licenses to grow cannabis from Health Canada in the past two years, while sales of legal marijuana products are increasing every month. Although the newly legal weed market faced immense competition from the illegal market, the coronavirus pandemic finally managed to bridge the gap between legal and illegal weed sales earlier this year. Back in August, Statistics Canada reported that household spending on recreational cannabis hit $ 648 million in the second quarter of 2020, while spending on illicit cannabis fell to a new low of $ 784 million. This boom in sales correlated with the ongoing pandemic, which means people may have been more reluctant to meet with dealers due to health concerns. The black market for cannabis, which is a significant problem in other legal markets as well, remained attractive to consumers despite legalization due to lower prices and the weaker presence of physical locations for buying legal pot across the country. Cannabis companies still have problems However, the cannabis supply hype has lagged behind initial expectations as more and more industry giants struggle in the current environment of global economic downturn and slow adoption of retail stores. Aurora Cannabis has written off billions in investments, closed several facilities, and underwent a dramatic management reorganization. The company recently announced that it will also be scaling back its operations in Europe as the medical market across the Atlantic "may not develop as quickly as \[the company\] once expected". Canopy Growth is another company that fell victim to the crisis sparked by the COVID-19 epidemic, although Canopy recently revealed its ambitious plans to expand into the U.S. cannabis-infused beverage market. Ontario-based CannTrust's shares were delisted from the New York Stock Exchange earlier this year, while industry experts warned that amid the ongoing liquidity squeeze, they anticipated an onslaught of companies to file for bankruptcy soon. However, as regulators seek to expedite the process of opening new retail locations for cannabis products, an issue that has troubled the nascent market since its inception, it is to be hoped that Canada's legalization history will inspire and encourage other countries seeking to end prohibition will inform.