Cannabis stocks plummet in Canada on the back of Ontario rule changes

Canadian cannabis stocks tumbled on Tuesday as investors reacted to the news that Ontario will limit sales of the drug when it becomes legal on Oct. 17.

Ontario had previously planned to open government-run retail stores this October, however, a shift in provincial government has changed the timeline. The new provincial government in Ontario, under Doug Ford, has decided to allow the private sector to operate stores, but not until April.

The government says it plans to sell cannabis online starting in October.

Markets responded to the news, with stocks like Canopy Growth (TSE:WEED) and Aurora Cannabis Inc. (TSE:ACB:CA) tumbling 7.00% and 8.78%, respectively.

Aphria Inc. (TSE:APH:CA) was down 7.88%.

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The delay in the opening of Canada’s largest market for cannabis is a blow for the industry.

However, some believe the additional time is warranted — and needed.

On Monday, the government (elected in June) said it will begin to consult with businesses, consumer groups, municipalities, law enforcement and others next week and will examine the retail models planned by Alberta, Saskatchewan and Manitoba. 

Recreational cannabis will be sold online in Ontario when legalized Oct. 17 through a government agency, the Ontario Cannabis Store.

Brick and mortar stores will be in place by April 1.

Story by ProactiveInvestors