Cannabis will now be sold in stores and ordered online, with the drugs posted to customers' homes.
Prime Minister Justin Trudeau made legalising the drug a 2015 election promise in a bid to take the market away from organised crime.
"We're not legalising cannabis because we think it's good for our health. We're doing it because we know it's not good for our children," Mr Trudeau said.
"We know we need to do a better job to protect our children and to eliminate or massively reduce the profits that go to organised crime."
Canada is only the second nation after Uruguay to legalise the drug, although countries such as Portugal have decriminalised it - meaning those caught with the drug face civil punishment, such as a fine