80 days from marijuana legalization, retail rollout is still hazy

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With less than 80 days before Canada legalizes marijuana, the rollout in its largest market remains hazy.

While Ontario was the first province to announce how it would regulate and distribute sales in government-run pot shops, a dramatic policy shift by newly elected Premier Doug Ford expected as early as Tuesday could move sales to private retail stores. There were already concerns Ontario’s stores wouldn’t be ready for legal sales on Oct. 17 and a shift in its retail model makes it more likely initial sales will fall short of expectations, according to Canaccord Genuity analyst Matt Bottomley.

“That will potentially make the sales that we see in the first quarter or two in a legalized market lower,” Bottomley said in a telephone interview. “There’s no way you’re pivoting that platform in anything less than six months.”

Concerns about lagging sales come as investor optimism has tempered in the lead up to Prime Minister Justin Trudeau’s legalization this fall. While market leaders such as Canopy Growth Corp. and Aurora Cannabis Inc. saw their value more than triple in 2017, companies haven’t seen the same meteoric growth of late.

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Jen Skerritt – Financial Post – July 30, 2018.

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