Both. Regulations within Canada such as controlling distribution channels, taxation levels, and marketing restrictions could affect sales within the country. However, the system is great for investors
and international buyers because it helps ensure a safe, quality product.

Dig a Little Deeper

Canada has a history of closely controlling related products including alcohol and tobacco. Similar regulations will likely be in place for the recreational cannabis market including relatively heavy taxes, requirements for warning labels or even plain packaging, and control over distribution channels similar to government-controlled alcohol sales in Ontario. These factors may negatively affect sales within Canada.

However for buyers outside of Canada, the Health Canada Licensed Producer system is great because it ensures a safe and quality product. The Canadian licensed producer system could become the Gold Standard for cannabis producers around the world. Canadian companies will likely become favoured suppliers in countries concerned about where they source cannabis for medical or adult use.

The system is also good for investors looking for more exposure to cannabis stocks. The Health Canada Licensed Producer application process is so strict with security checks, inspections, and even a review of business plans that it is like a level of due diligence all in itself. This will help keep out “fly by night” companies.