April 10, 2017 / 8:02 PM / a year ago

UPDATE 1-Canada to introduce legal marijuana legislation this week -sources

OTTAWA, April 10 (Reuters) - The Canadian government will introduce legislation this week to legalize marijuana for recreational use, sources familiar with the matter said on Monday, providing a road map that will be closely watched by companies seeking to capitalize on the emerging market.

The Liberal government made legalizing recreational marijuana part of its successful 2015 election campaign and had said it would introduce legislation this spring. Authorities have been battling a rise in illegal dispensaries, particularly in Ontario and British Columbia.

The legislation will be introduced on Thursday, according to one source. A second source said it would come this week. They declined to be identified, citing the sensitivity of the situation.

Spokesmen for the justice and health ministers declined to comment.

Shares of marijuana producers rose after the news was widely reported.

Canopy Growth Co was up 2.2 percent at C$10.44 for a gain of more than 14 percent so far this year. Aphria Inc rose 5.9 percent to C$8.38, and Organigram Holdings jumped 11.7 percent to C$3.45.

Although some U.S. states have legalized recreational marijuana use, including Colorado and Washington, Canada was on track to be the first Group of Seven country to legalize it nationally.

Medical marijuana is already legal in Canada through a mail order system that requires a prescription. Deloitte has estimated that annual sales of recreational marijuana could be as high as C$8.7 billion ($6.52 billion).

The Globe and Mail newspaper reported that the legislation is expected to control the ability of producers to market their products.

An official panel recommended late last year that the government require plain packaging, and that provinces be allowed to decide how cannabis is sold. (Reporting by Leah Schnurr and David Ljunggren; Editing by Richard Chang)

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