February 21, 2018
One of the hot topics in 2017 was the legalization of cannabis for recreational adult use in Canada. Navigating through the weeds to understand the regulation of wacky tabacky can be challenging, but don’t let that blunt your enthusiasm for this new regulatory regime.
Countdown to (legal) High Times
The Canadian government had initially stated that legalization would happen no later than July 1, 2018; however, the Government has recently announced that implementation may be delayed until later in the summer so that provinces have a transition period to finalize their own regulations regarding the distribution and sale.
On April 13, 2017, Bill C-45, An Act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts (the “Act”) was introduced in the House of Commons. The Act would legalize adult use marijuana consumption and sales in Canada. The Act allows, among other things, for provinces and territories to take responsibility for the sale and distribution of cannabis. Over the past several months, we’ve seen several provinces put forth a legal framework or announce their plans for the regulation, distribution and sale of cannabis for recreational purposes.
We have previously discussed the key elements of the Act, which will create a strict legal framework for controlling the production, distribution, promotion and sale of cannabis in Canada. Much of the legislation is specifically targeted at limiting potential exposure to young people, as well as ensuring public health and safety and reducing the burden on the criminal justice system. We also noted that Canada has international obligations pursuant to international drug control conventions. The Government of Canada has briefly addressed this point in their Introduction of the Cannabis Act: Questions and Answers and reinforced that the Government of Canada “takes its international obligations very seriously” and will “continue to engage in constructive dialogue with our international partners”. We will have to wait and see how our international obligations will be addressed as we progress towards legalization.
Highlights of the Regulations
In Ontario, Bill 174, the Cannabis, Smoke-Free Ontario, and Road Safety Statute Law Amendment Act, 2017, will regulate the purchase, sale and use of cannabis. Under Bill 174, it will be illegal for people under the age of 19 to buy, sell, have or share recreational cannabis (this is higher than the federal minimum of 18 years of age). British Columbia, Nova Scotia, Prince Edward Island, Manitoba and New Brunswick and Labrador have all announced the minimum age is 19 years old. Under the legislation in Alberta (Bill 26, An Act to Regulate and Control Cannabis) and Québec (Bill 157, An Act to constitute the Société québécoise du cannabis, to enact the Cannabis Regulation Act and to amend various highway safety-related provisions), the legal age to buy, possess and consume recreational cannabis will be 18 years old, which is aligned with the legal drinking age in both provinces.
Retail and distribution
In Ontario, there will be a specific provincial retailer, the Ontario Cannabis Retail Corporation, a subsidiary of the Liquor Control Board of Ontario, will distribute recreational (or adult use or non-medical) cannabis though stand-alone stores and an online distribution service. British Columbia will be using a hybrid model, meaning British Columbians will be able to purchase non-medical cannabis through government operated or private retailers. The B.C. Liquor Distribution Branch will be the wholesale distributor of non-medical cannabis in the province. The Alberta Gaming and Liquor Commission will manage distribution in Alberta, with licensed retail establishments selling cannabis and government operating online sales and home delivery. Similarly, the Manitoba Liquor and Lotteries Corp. will secure the supply of cannabis in Manitoba, but private retail stores will be in charge of selling it.
In Nova Scotia, the distribution and sale of cannabis will be through the Nova Scotia Liquor Corporation, and, although cannabis and liquor will be sold in the same store, the area where cannabis is sold will be separated from the rest of the store and cannabis products will not be visible to people in the rest of the store. Several other provinces, including Ontario, Manitoba, British Columbia and Alberta, have prohibited cannabis from being sold in the same stores as alcohol.
The Société Québécoise du Cannabis, under the umbrella of the Société des Alcools du Québec, will have a monopoly over the purchase and sale of cannabis or any cannabis product in Québec and will manage retail stores and online sales across the province. In retail stores, customers must have the assistance of an employee to access cannabis and the cannabis can be visible only from inside the store.
New Brunswick’s Bill 16, the Cannabis Control Act prohibits the consumption of recreational cannabis in public places. If you have cannabis at home, you will be required to store it in a locked room or locked container to keep it out of the hands of minors. In Ontario, recreational cannabis can be used only in a private residence and, much like the use of alcohol, the use of cannabis is prohibited in public places, workplaces and motor vehicles. Medical users in Ontario will not be allowed to smoke medical cannabis in enclosed public places, enclosed workplaces, motor vehicles and other smoke-free places, with a few exceptions. Alberta has banned consumption in cars and already prohibits “impairment” in workplaces, but will permit consumption in some public areas where smoking is allowed. British Columbia will also permit consumption in some public areas where tobacco smoking is prohibited; however, to minimize child and youth exposure, consumption will be banned in areas frequented by children. In Québec, individuals will not be allowed to grow their own cannabis at home and there will be zero tolerance for driving under the influence. Cannabis must be smoked only in the same places as tobacco and is prohibited in several areas, including bus shelters, parks and school campuses.
Businesses in the industry still face a somewhat uncertain environment while the legislation is figured out. As we’ve seen, there is some variation between provincial regulations and we are waiting to see what the federal regulations will include. Health Canada has published a consultation document, the Proposed Approach to the Regulation of Cannabis, which, as we previously discussed, contains indications of the federal Government’s willingness to specifically regulate brand use on cannabis and related products.
Businesses will no doubt use the next several months to continue to help shape the regulatory framework that governs the production, distribution and sale of cannabis for both medical and recreational use in Canada.
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