Article by Ambrose O’Callaghan, Motley Fool
Investors are a little over a month away from the beginning of recreational cannabis legalization across Canada. Legalization will trigger on October 17, 2018. In Ontario, Canada’s largest province, cannabis will only be available for legal purchase online. That means that consumers will be unable to perform cash transactions for cannabis in the early months of legalization.
In July, the new Ontario PC government announced that it would pursue a private model for cannabis retail, mirroring the system that has been adopted in Alberta. On the surface this is a positive for investors.
Many of the top producers were pushing for at least some degree of private control going forward, and cannabis advocates were earning against handing over control to the public sector. However, the new Ford-led government has yet to lay out a concrete vision for wholesalers. The government set a date of April 1, 2019 for making wholesale cannabis available to consumers.
In the meantime, purchases will be made online through the Ontario Cannabis Store (OSC). This entity was originally supposed to be the sole wholesaler for cannabis before the Ford-led government made the switch to private.
As of the time of writing, the Ontario Cannabis Store has signed a supply agreement with 32 licensed cannabis producers. Investors and regular readers will recognize many of the big names.