On Thursday, April 13, 2017, Canada made headlines with its official introduction of legislation to legalize recreational cannabis in the country by July 2018. While the country’s announcement has major national and international implications, cannabis stocks in Canada took a downturn upon hearing the news.
The Canadian Marijuana Index dropped approximately 5.4% by market closing, with all 12 companies on the Canadian Marijuana Index down for the day.
“After increasing more than 14% in the last week, the Canadian Marijuana Index cooled off today despite the generally positive legalization announcement,” said Dan Nicholls, Vice President of the MJIC Marijuana Index. “This caps off a volatile week which saw the Canadian Marijuana Index increase 12% on Monday and fall 7% on Tuesday.”
If the recreational cannabis bill receives parliamentary approval and Royal Assent, provinces and territories would have to implement their own specific regulations in regards to selling recreational cannabis, so the risks and rewards of cannabis stocks in Canada may vary from jurisdiction to jurisdiction.