(Adds prime minister comment, Toronto, Vancouver developments, closing share prices)
By Nichola Saminather and Julie Gordon
TORONTO/VANCOUVER, Oct 17 (Reuters) - Canada became the first industrialized nation to legalize recreational cannabis on Wednesday, but a lawful buzz will be hard to come by in its biggest cities like Toronto and Vancouver, where stores are not yet open.
The day was historic for the country as Canadian adults can now legally smoke recreational marijuana after nearly a century-long ban. But provinces and businesses have struggled to prepare, and legalization was pushed back from a July start to enable setting up distribution and sales networks.
Despite the early problems, the move is a political win for Prime Minister Justin Trudeau, who vowed to legalize cannabis during his 2015 election campaign. The pledge was aimed at taking profits away from organized crime and regulating the production, distribution and consumption of a product that millions of Canadians consume illegally.
“The prohibition on marijuana has not worked in this country,” Trudeau told reporters in Ottawa. “Young Canadians have the highest usage of marijuana anywhere in the world ... criminal organizations and street gangs make over C$6 billion a year on the sale of marijuana across the country... That needs to stop and that’s exactly what we have done.”
The federal government and many provinces have been cautious, starting with limited stores and products, including no edible cannabis products for a year, and tight control over supply.
In many parts of the country, particularly those with few stores, much of the legal sales action was online, as consumers flocked to websites run by provincial governments and licensed retailers to buy legally, despite a few days’ wait for delivery and extra charges.
The online stores using Shopify Inc’s e-commerce software across the country were processing more than 100 orders a minute, and had millions of visitors in the first 12 hours, an external spokeswoman said. Some websites ran out of popular products.
“What changes is that now I can use it openly, without people coming and challenging my right to use it,” said Peter Hasek, a music teacher who grows the plant at home and was attending an end-of-prohibition party at a downtown Toronto coffee shop.
To him, that is more important than access to legal product, he said.
Ontario, home to Canada’s most populous city, Toronto, will have no stores until April 2019 due to a change in the province’s retail model by a new provincial government.
British Columbia will have both private and government stores, but has yet to issue any private licenses. In Vancouver, the City Cannabis Co dispensary, which is licensed by the city and awaiting provincial retail approval, was still operating, despite a government suggestion earlier this week that existing “gray market” shops close until fully licensed.
Consultants in pressed black aprons served a mostly older clientele browsing varieties of dried cannabis and bottles of tinctures.
“Most of our customers are professionals, not your typical stoners,” said general manager Alex Orantes.
In Kamloops, at British Columbia’s only legal shop open and run by the government, a line started forming at 6:00 am PT (1300 GMT), the Canadian Broadcasting Corporation reported.
Marijuana enthusiasts in St. John’s, the capital of Newfoundland and Labrador, Canada’s easternmost province, kicked off legal sales at midnight, with over 100 people lining up outside a Tweed-branded store owned by Canopy Growth Corp .
Canopy Chief Executive Officer Bruce Linton rang in the first sales to residents Ian Power and Nikki Rose.
Shares of Canadian cannabis companies retreated on Wednesday after rallying in the run-up to legalization. Canopy and Aurora Cannabis, the world’s two biggest cannabis producers, closed down 4.3 percent and 2.9 percent, respectively, after touching all-time highs on Tuesday.
Even in provinces with more shops, many shelves are expected to soon be empty because of a shortage of product. A study by the University of Waterloo and the C.D. Howe Institute economic policy think tank found legal supply will satisfy less than 60 percent of demand in the early months, although that will change as production increases.
Separately, Public Safety Minister Ralph Goodale on Wednesday said the government would waive the fee and waiting period when people who have been convicted of possession of up to 30 grams (1 ounce) of marijuana apply for pardons, after they’ve served their sentences. The legislation will be introduced by the end of the year, he said.
Law enforcement of those driving under the influence of marijuana could be patchy. In August, Canada approved a device to detect levels of tetrahydrocannabinol (THC), the psychoactive element in cannabis, in a driver’s saliva.
But many large police departments will forego the C$5,000 device, Adam Palmer, president of the Canadian Association of Chiefs of Police, told reporters on Monday.
Draeger Safety Canada, which makes the device, has shipped some units, but a two-week federal funding delay has put further orders on hold. It expects demand for between 300 and 500 units through March, Managing Director Rob Clark said.
Canada has invested C$274 million to enforce new laws and some provinces have allocated their own funding, but Palmer said police will not crack down on illegal stores right away.
“When the law changes on the 17th, we’re not going to see a big change overnight,” Palmer said. “Police aren’t ... champing at the bit to go out and start raiding stores.” ($1 = 1.2934 Canadian dollars)
Reporting by Nichola Saminather in Toronto and Julie Gordon in Vancouver; Additional reporting by Chris Wattie in St. John's, Rod Nickel in Winnipeg and David Ljunggren in Ottawa; Editing by Jeffrey Benkoe and Bill Berkrot