Marijuana Stocks Slump As Canadian Court Nixes Restrictions

Canadian medical marijuana producers plunged after a federal court threw out a series of regulations that restrict the private growth and consumption of the substance.

Canopy Growth Corp., based in Smiths Falls, Ontario, plunged as much as 12 percent and was down 8.7 percent to C$2.88 at 1:50 p.m. in Toronto, the most in seven weeks and erasing gains for the year. Smaller producer Aphria Inc. sank as much as 13 percent, the most since November.

In a ruling delivered Wednesday, federal court justice Michael Phelan declared Canada’s 2013 “Marihuana for Medical Purposes Regulations” invalid, saying they violated the constitutional rights of patients who use marijuana.

The regulations were brought in by the Conservative government of former Prime Minister Stephen Harper, who placed restrictions on private growth of marijuana. Some users objected, saying the changes would force them to buy from major producers at a higher cost. The court ruled the restrictions were arbitrary and “did not prove to reduce risk to health and safety or to improve access -- the purported objectives of the regulation.”

Prime Minister Justin Trudeau, who took power in November, has pledged to legalize, regulate and restrict access to marijuana. His Liberal government plans to create a “new regulatory framework” but hasn’t yet offered details or a timeline for completion.

The decision comes after a report Shoppers Drug Mart, the retail pharmacy unit of Loblaw Cos., is in talks with licensed medical-marijuana producers about carrying the drug in its stores, according to the Globe and Mail newspaper.

“We believe dispensing medical marijuana through pharmacy, like other medications, is the safest option,” Tammy Smitham, a spokeswoman for Shoppers Drug Mart, said in an e-mail when asked to confirm the retailer is considering dispensing the drug.

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