How the Marijuana Industry is Moving Towards Legalization in Canada?

The Marijuana Industry has raised a lot of eyebrows in the last few years as investors see the potential profits associated with the ending of prohibition.  Canada is the first G7 country that has committed to legalizing marijuana at the Federal level. Canada’s medical marijuana legislation created a lot of speculation regarding the government’s process moving forward when implementing full-scale legalization. The status of medical marijuana has given Canadian companies the ability to build factories, spend money on research and development, thus obtaining a small market segment of what is currently available for retail.

Marijuana dispensaries, growers, and recreational smokers all have reasons to be optimistic following the release of a government report on how legalization in Canada should be shaped.  The Task Force on Cannabis Legalization and Regulation made 80 recommendations to the government that include allowing marijuana to be sold in retail establishments and to be smoked at indoor marijuana lounges and tasting rooms.  The task force has determined that the legal age to purchase and consume cannabis should be 18, and allow Canadians who use recreationally to possess a maximum of 30 grams of weed.  The task force called for illegal production, trafficking, and selling to minors to remain criminal offenses, however lesser offenses will move towards a fine based system.

Paul Lewin, lawyer and a regional director of NORML, The National Organization for the Reform of Marijuana Laws said he doesn’t believe that anyone should be receiving criminal records for cannabis-related offenses anymore.  “It should be treated administratively,” he said. “Like if your signal light is not working you get a ticket for it… You’re not going to get a criminal record for having a signal light not working.”  Lewin said he would like the government to acknowledge the harm that prohibition has done to Canadians with criminal records.  He believes they should consider pardons for those who have only been convicted of nonviolent cannabis crimes.

Where other countries have stifling marijuana-related development, Canada is giving businesses an opportunity to operate within a legal framework that encourages economic growth and scientific innovation.  The marijuana industry in the United States, for example faces financial and legal barriers because of discrepancies between state and federal laws.  These barriers include a lack of access to traditional banking systems, tax deductions and courts within which to enforce their rights. Canada’s new, more hospitable environment will bring foreign innovators and investors into this market – creating a “green rush” of sorts.  This has led to a run up in the value of cannabis company stocks.  Canada’s leading online marijuana dispensary – Green Panther has said business has tripled in the last six months.  Canaccord Genuity analysts reported in late 2016 that if legalization were to follow expected timelines, Canada could have nearly four million legal recreational users of marijuana by 2021, with a potential for $6-billion in annual sales.

With the passing of this legislation and the expected influx of entrepreneurs comes the necessity to protect intellectual property, including filing trademark applications for their brands, registering domain names and applying for plant breeders’ rights (PBR) for new plant strains.

Licensed cultivators of medical marijuana began staking their branding claims well before the announcement of this legislation by filing trademark applications, led in number by Tweed Inc. of Smiths Falls, Ontario.  With 39 trademark applications currently on file with the Canadian Intellectual Property Office, Tweed will have a significant head start on competitors entering the commercial-cannabis industry after the legislation goes into effect.  Applications for trademarks can be made if the owner intends to use them in Canada.  The legislation does contain heavy restrictions on how cannabis may be branded and promoted.  The government wishes to avoid any advertising to minors, in the same fashion that alcohol and tobacco are not advertised to attract children.  With the market potential exploding, the intellectual property race is on full steam and who comes out on top will be directly tied to who gets in early.

With the United States also moving toward legalization, Canadian companies are already investing in the U.S. marijuana market and looking to license products that have become popular here, says Troy Dayton, CEO of Arcview Group, which runs a network of investors and publishes an annual report on the size of the legal marijuana industry. Assuming legalization comes to pass, “it’s the Canadian companies that have the best shot of building the biggest portfolios of U.S. companies,” he says. He also believes that Canada will be in a good position to set up a lucrative export business, as populous countries like Germany have legalized medical marijuana as a nation and others consider relaxing their laws.

The future is bright for the marijuana industry in Canada!