In many rural regions of British Columbia (BC), cannabis production subsidized the livelihoods of thousands of small businesses for decades. While mostly illicit, this form of sustenance has been recognized as a primary industry and an integral part of the local socio-economic fabric. However, with the introduction of legalization on 17 October 2018 governments are trying to direct new ways for pre-legalization cannabis economies to take part and function. This affects two predominant stakeholder groups, namely cannabis participants and all levels of government who are forced to team up to transition illicit markets to a legal market. Recognizing this rural economic transition involves a particularly unique group of individuals who have been perceived as "criminals", this dissertation examines the impacts of cannabis legalization by framing it as a traditional rural economic transition involving an underrepresented stakeholder group. Focusing on the case of the Central Kootenay region of BC (referenced generally as "the Kootenays") this dissertation addresses four research questions: (i) Is the framing based on transitioning economies and stakeholder participation an accurate representation of the dynamics of the case region?; (ii) What are the perceived and experienced social, economic, and political impacts of legalization?; (iii) What evidence is there of evidence-based policy-making for Bill C-45, the Cannabis Act?; (iv) How can the Kootenay region effectively transition to legalization considering the key challenges and opportunities faced by the two key stakeholder groups? Based on 56 key informant interviews within the case region and a hybrid thematic analysis, this exploratory research found that the implementation of cannabis legalization has largely failed the Kootenay region for three reasons; most local cannabis and local government participants were ignored during federal policy-making because of their criminal past and rural location, respectively, many participants from both groups regarded legalization as primarily motivated as a tax grab which fueled long standing mistrust between the groups, and division destroyed social capital, disincentivized local cannabis participants from legally participating, and hampered the potential for genuine collaboration between and within groups. This dissertation advances academic knowledge on transitioning economies and stakeholder participation while informing cannabis policy and rural economic development.