Marijuana Oversupply Would Hit This Pot Stock Especially Hard -- The Motley Fool

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Date:
Wednesday, Mar 14, 2018

Big changes are probably headed the marijuana industry's way in 2018. After years of speculating on which country would follow in the footsteps of Uruguay and legalize recreational cannabis, Canada looks to be next in line.

Right now, Canada's parliament is analyzing a bill that'd make cannabis legal for adult purchase and consumption by this summer. With conservatives representing a clear minority in parliament, and a two-year tax-sharing agreement in place that's designed to allow provinces to receive three-quarters of all excise tax revenue generated from the sale of cannabis, legalization is looking more likely than ever. If the Senate votes in favor of the measure on June 7, it's expected to be signed into law very shortly thereafter, making either August or September the month where legal recreational cannabis sales will commence. 

Image source: Getty Images.

What does legal weed mean for Canada? Aside from becoming the most prominent marijuana market in the world, it would add an estimated $5 billion in annual revenue, if not more. Let's not also forget that Canada is among a small group of countries that've legalized the export of dried cannabis to markets that've legalized medical weed. With most of Europe having virtually no domestic growing capacity, they'll be leaning on countries like Canada to meet their near- and intermediate-term medical cannabis supply demands.

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