The ride ahead may be a little bumpier, but GMP Securities analyst Martin Landry says Bill C-45 should meet its expected timeline.
On Monday, marijuana Bill C-45, by a vote of 200-82, passed the House of Commons Third Reading. The bill will now move to the senate.
“We’re one step closer to legalizing & regulating marijuana. #BillC45 means less money for organized crime and harder access for our kids. Tonight, it passed third reading in the House and it’s now headed to the Senate,” Canadian Prime Minister Justin Trudeau tweeted.
Landry says this was an expected developement and says the true test lies in the senate, where things are not expected to progress quite as smoothly.
“Unlike the HoC, there is no party majority within the Senate as Trudeau ejected several Liberal senators in 2014 in an effort to reduce partisanship,” the analyst explains. “The Senate’s current composition is ~16% Liberal, ~37% Conservative, and ~47% Independent which could suggest less potential consensus and hence, a less smooth progression for Bill C-45 through the Senate stage. We note however, various industry reports point to Independent senators often voting alongside the government, which is reassuring in our view as this could make the Independents the swing vote.”
Landry notes the senate will be on recess for the last week of December and for most of January, and that the bill will need to pass a first reading, second reading and vote, commitee review, report stage, and a third reading and vote to make its way through the senate. While the analyst says this will make for slower progress than the House of Commons, he expects the timelines have not changed.
“In our view, Bill C-45 has progressed quite well thus far without any major delays, and Third Reading passing within our expected November timeframe,” Landry says. “This represents a positive step through the legislative process, and supports our sector investment thesis. While movement through the Senate is expected to be less rapid, we believe there is enough time for the Senate review to be completed and Bill C-45 to be signed into law by July 1st, 2018.”
Canada is widely expected to become the first G20 nation to legalize access to cannabis for recreational purposes.