A few days before the marijuana legalization, Canada releases the bill 36, seeking to make cannabis a public issue and causing a bit of uncertainty.
With full marijuana legalization taking effect just two weeks ago, it can be quite challenging to fully keep up with Canada and its marijuana industry, both recreational and medical.
Take the province of Ontario for example. Earlier this year, in preparation for the upcoming marijuana legalization, its provincial government replaced the planned public model for cannabis retail with a new legislative framework designed around the private sale, releasing a draft legislation right after it. The complete overhaul of the government’s original commitment came as a surprise to many people.
Speaking with CBC earlier this year, Canadian Minister of Finance Vic Fedeli said, “The government of Ontario will not be in the business of running physical cannabis stores. Instead, we will work with private-sector businesses to build a safe, reliable retail system that will divert sales away from the illegal market.”
Following this, Fedeli, along with Attorney General Caroline Mulroney laid out the plan for a hybrid system that will prioritize public safety, as well as eliminating the black and grey markets for marijuana.
In a surprising turn of events, however, Bill 36 was released. Seeking to enact a statute in place of various pieces of legislation that needs amending, the new bill is specifically made for the use and sale of cannabis in Ontario. The result then was somewhat unexpected, and people are left wondering whether this would place a limit on the number of retail store licenses that will be available in Ontario in the near future.
A changing landscape
What this new business model essentially does is it’s regulating the cannabis industry in unique ways. As with any model, there are pros and cons to this. One such advantage is that franchising will create brand recognition for products moving forward, building trust with its consumers. Nevertheless, there are also cons, such as building a market between companies and retail stores between what should be trusted and what we should ignore.
So how will this affect the industry? More so for its medical sector?
The truth is that this part of the industry remains unclear, particularly to establish cannabis brands. Take, for example, FSD Pharma (CNSX: HUGE, OTCMKTS: FSDDF), a publicly traded company trading under the Canadian Securities Exchange (CSE). Headquartered in Toronto, Canada, the company currently cultivates and grows cannabis through its Access to Cannabis for Medical Purposes Regulations license. The company reportedly operates this sector of the company through its wholly-owned subsidiary FV Pharma Inc.
Already a well-known name in Canada’s medical marijuana sector, the company made history on its first day of trading under the CSE, breaking the all-time record of most volumes traded in the span of a single day. To up the ante, the company then continued on and broke the all-time records for most volumes traded in a single week and year, being the first ever company to do so.
Despite this, and its popular brand recognition, the new bill still raises many questions for FSD Pharma and other companies like it. This is because, until full legalization, the new bill’s effect on the industry will border on uncertainty and assumptions. Some are saying that this will do good things for the sector, while others argue that this will only further push the separation of the markets for recreational and medical marijuana, leaving the latter behind.
Still, a quick look at what FSD has been recently up to easily points out that if anything, the company is only preparing to fully accept the upcoming marijuana legalization.
Headed by its CEO Thomas Fairfull, the company recently started the construction of its flagship dispensary and heritage museum in Ontario, which according to Fairfull, is one of the company’s ways to prepare for the “sales of our high quality, indoor grown and pharmaceutical grade product, which will be available for sale shortly.”
Furthermore, FSD Pharma is also in the process of transforming a former Kraft facility into the world’s biggest indoor hydroponic cannabis production and processing facility and farm. Once the construction is complete, the facility will then be used by multiple businesses that will all work together to meet the demand and change that the legalization will bring to Canada.
The company also recently joined the Horizons Marijuana Life Sciences Index ETF, garnering a company stock weighting of 1.9 percent.
With the industry changing and evolving at near breakneck speed, it can be quite challenging how the revolving doors of cannabis laws can affect Canada’s booming cannabis scene and whether a company like FSD Pharma can keep up, remains to be seen. Nevertheless, the company’s roots are already firm in the ground, and all that’s left is for legalization to fully embrace it.
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