Canada has become the second country after Uruguay to legalise possession and the use of recreational marijuana.
The Canadian government has allowed adults to possess up to 30 grams of dried marijuana in public. Medicinal cannabis has been legal in Canada since 2001.
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Uruguay was the first country to legalise recreational marijuana in 2013.
Recreational weed is also now legal in nine US states including Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, Vermont and Washington. It is also legal in the District of Colombia and the northern Mariana Islands.
However, use and possession of the drug for any purpose is still illegal under the US federal law, meaning most cannabis companies are forced to function as all-cash businesses and struggle to get capital investments and loans from banks.
The government allows states to make their own marijuana policy and does not enforce the federal law prohibiting recreational consumption in areas where it has been approved.
While the UK is a long way off approving recreational marijuana, doctors will be able to prescribe medicinal cannabis from November 1.
People suffering from chronic pain, epilepsy, or nausea as a result of chemotherapy or multiple sclerosis (MS) will be among the first to be prescribed the drugs.
Geremy Thomas, chief executive and founder of medical cannabis investor Sativa Investments PLC (AQSE:SATI), has said the UK government’s decision to relax the rules on medical cannabis does not mean the legalisation of recreational use is on the cards.
He also reckons existing manufacturers outside the UK will likely be awarded limited export licenses for medical cannabis products. For this reason, investors are becoming aware of the opportunities in the UK.
“[Investors] will recognise that we [the UK] will be a very significant cannabis market,” he said.
Michael Hewson, chief market analyst at CMC Markets, said: “While there is no prospect of a significant change of tack from the UK government on how it views the legality or otherwise of cannabis, there does appear to be a growing recognition that certain parts of the plant can be harvested for medicinal uses, and legislation could well be changed in the future to reflect that."
He added: “This growing industry appears to be spawning a raft of start-up businesses keen to have a stake in what is likely to be a multibillion-dollar industry, but with that there still remains a high degree of resistance to its legalisation on a wider scale.”