(Source: Adobe Stock.)
  • The Canadian federal government is putting forth numerous amendments to cannabis regulations to reduce red tape for new and existing businesses
  • The proposed changes include more consumer-friendly packaging and doing away with redundant oversight measures
  • If passed, the amendments are estimated to yield C$41 million in annualized savings
  • Some of the largest Canadian cannabis stocks had a mixed reaction to the news

The Canadian federal government is putting forth numerous amendments to cannabis regulations to reduce red tape for new and existing businesses.

As outlined on Saturday in the latest edition of Canada Gazette – the federal government’s official newspaper – the proposed changes will represent approximately C$41 million in annualized net savings across administration and compliance, including:

  • Allowing lids and containers of cannabis products to come in different colours, enabling transparent packaging and the use of QR codes.
  • The ability to package multiple products together, subject to certain requirements, allowing cannabis companies to sell edibles with higher unit counts.
  • The legalization of cannabis pollen sales and distribution.
  • Eliminating the need to provide the government with paper copies of product information sheets.
  • Eliminating the need for companies to notify the government about promotional efforts, cultivation waste and every new cannabis product they intend to sell.

The government’s leniency follows a rocky history since cannabis legalization in 2018, marked by two years of hyper-growth, acquisitions and overproduction, and four years of deteriorating margins, bankruptcies and consolidations that have left most Canadian-listed cannabis stocks in investors’ regret piles, though hope still glimmers thanks to the U.S. government’s ongoing efforts to reschedule cannabis as a less risky drug.

Prospective stocks include some of the largest and highest-potential names doing business in Canada, many of which find themselves down by more than 80 per cent because they grew too big to turn a reliable profit, or any profit at all, making their considerable international asset bases prime candidates for a turnaround story.

Here’s how a selection of these Canadian-listed cannabis leaders reacted to the federal government’s proposed regulatory changes:

  • Curaleaf Holdings (TSX:CURA), market capitalization C$4.58 billion, owns 145 dispensaries across 17 U.S. states, boasts an extensive presence across Europe and the U.K., and recently purchased a vertically integrated producer in Canada. The stock is down by 1.94 per cent as of 9:40 am ET, trading at C$6.05 per share, and has given back more than 80 per cent since going public in 2018.
  • Tilray Brands (TSX:TLRY), market cap C$2.02 billion, is active in more than 20 countries across medical and adult-use cannabis, medical distribution, wellness foods, and beverages including alcohol. The stock is down by 1.02 per cent as of 9:42 am ET, trading at C$2.41 per share, and has given back 87.74 per cent since 2019.
  • Cronos Group (TSX:CRON), market cap C$1.29 billion, is a cannabinoid company with an established global supply chain and the No. 1 brands in edibles and dried flower in Canada according to Hifyre data for December 2023. The stock is down by 1.18 per cent as of 9:40 am ET, trading at C$3.34 per share, and has given back more than 88 per cent from its all-time-high in 2019.
  • SNDL (NASDAQ:SNDL), market cap C$536.91 million, is the largest private-sector liquor and cannabis retailer in Canada and one of the country’s largest vertically integrated cannabis companies. The stock is up by 1.47 per cent, trading at US$2.07 per share as of 10:05 am ET, and has given back more than 98 per cent since 2019.
  • Canopy Growth (TSX:WEED), market cap C$527.61 million, owns some of the most well-recognized brands in Canadian cannabis, including Tweed and 7Acres, as well as a strategic set of assets including Wana Brands, Jetty Extracts and Acreage Holdings that position it for U.S. expansion. The stock is down by 1.97 per cent as of 9:50 am ET, trading at C$9.44 per share, and has given back 98.29 per cent since 2019.
  • Aurora Cannabis (TSX:ACB), market cap C$427.59 million, boasts the No. 1 spot in Canadian medical cannabis revenue and a presence in 15 global cannabis markets. The stock is down by 1.91 per cent as of 9:51 am ET, trading at C$7.69 per share, and has given back 99.37 per cent since 2019.
  • High Tide (TSXV:HITI), market cap C$275.29 million, operates Canna Cabana, the largest non-franchised cannabis retail chain in Canada with 172 current locations across British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. The stock is up by 0.86 per cent, trading at C$3.50 per share as of 9:50 am ET, and has given back 42 per cent since inception in 2018.

Join the discussion: Find out what everybody’s saying about these cannabis stocks and the state of Canadian cannabis regulations on the Curaleaf Holdings Inc., Tilray Brands Inc., Cronos Group Inc., SNDL Inc., Canopy Growth Corp., Aurora Cannabis Inc. and High Tide Inc. Bullboards, and check out the rest of Stockhouse’s stock forums and message boards.

The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here.

(Top photo: Adobe Stock)

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