Shares of Canada’s cannabis companies fell sharply on Tuesday morning as investors reacted to news that Ontario will initially limit sales of the drug when it becomes legal on Oct. 17.

Ontario had previously planned to open government-run stores in October. The new Doug Ford government, however, has decided to allow the private sector to operate stores but not until next spring. The government does plan to sell cannabis online starting in October.

The delayed opening of Canada’s largest market for cannabis is a blow for the industry. Investors sent stocks lower on Tuesday. Canopy Growth Corp., the most prominent name in the industry whose ticker is WEED, led the declines.

At about 11 a.m. ET, Canopy was down 6.5 per cent, sliding $2.27 to $32.77. Its market capitalization is about $7-billion and its stock is emblematic of the wild ups and downs of the cannabis sector. Canopy hit a high of $48.72 in June and has lost about a third of its value since then. But a year ago, Canopy traded at about $8.40 a share, so investors from that point have still quadrupled their money, even with the declines of the past two months.

Analyst Martin Landry of GMP Securities said the delay in Ontario means less cannabis will be initially sold.

“A delay of six to nine months in the opening of retail stores is likely to dampen recreational cannabis sales at the onset in Ontario,” Mr. Landry said in a note to clients, cited by Bloomberg News. “Longer term, private retail could be more effective than a government monopoly to capture black-market share, and could result in more locations.”

Aurora Cannabis Inc. fell 4 per cent to $5.67, down 25 cents a share. Aphira Inc. traded at $9.09, down 55 cents or 5.7 per cent. Tilray Inc., which recently went public, was at US$25.69, down US$0.98 or 3.7 per cent.

Horizons Marijuana Life Sciences ETF, which tracks an array of cannabis companies, was down 3 per cent, sliding 47 cents to $14.81.