Stocks of marijuana companies Canopy Growth Corp (TSX:WEED) and Aphria Inc (TSX:APH) were up 2.5% and 1.3% respectively on Friday, September 8 midway through the noon hour. The same day the Ontario government unveiled plans to sell marijuana through a at least 150 new government chains. The new system will be overseen by the Liquor Control Board of Ontario but it will be sold through separate stand-alone stores and not alongside alcohol. The product will be behind-the-counter and purchasers will be subject to ID checks and may have to sign for the product. This comes after a period of debate among several provinces and Ontario releasing a survey to citizens for how marijuana will be sold.
The legal age for consumption will be 19 and marijuana will also be available for purchase online. Small, privately-owned dispensaries will now be the further focus of a government crackdown. For companies like Canopy Growth and Aphria the move by the Ontario government likely does not come as a surprise. Politicians and bureaucrats have been warm on the idea, no doubt many are attracted to the potential revenue that can be produced for the public sector since the announcement of legalization.
Canopy Growth CEO Bruce Linton believes that the remaining provinces will follow suit with similar systems. Marijuana stocks are in good position to shed some of the pessimism since concerns emerged following the provincial debates. It appears legalization is on track for the July 2018 deadline.
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