Canada: Matt Maurer Publishes "Task Force Recommendations On Legalization Of Marijuana: The "Coles" Notes" On Slaw

Last Updated: January 9 2017
Article by Matt Maurer

Task Force Recommendations on Legalization of Marijuana: The "Coles" Notes

Originally published on Slaw by litigator Matt Maurer.

On June 30, 2016, the Minister of Justice and Attorney General of Canada, the Minister of Public Safety and Emergency Preparedness, and the Minister of Health announced the creation of a nine-member Task Force on Cannabis Legalization and Regulation (the "Task Force").

The mandate of the Task Force was to consult and provide advice on the design of a new legislative and regulatory framework for legal access to cannabis, consistent with the Government's commitment to "legalize, regulate, and restrict access."

Over five months, the Task Force consulted with a wide variety of groups and individuals before finally releasing its report to the Government on November 30, 2016. The release of the report to the public was delayed by a few weeks to allow the report to first be translated into French. The report is very lengthy, a complete copy of the report can be found here.

Personal Observations

There is something for everyone in the report. Whether you are a politician, doctor, business owner, parent, or user, there are recommendations that you will find interesting and relevant to your current situation. I have set out the recommendations in a summary fashion (which are quite lengthy despite being in a summary fashion) below. However, before listing those recommendations I thought I would highlight a few that I personally find interesting.

Encouraging a Competitive Marketplace

The Task Force recommends using licensing and production controls to encourage a "diverse, competitive market that also includes small producers". Many people believed that production capabilities might be slanted in favour of big corporations, or entities that already have a license to produce for medical purposes by Health Canada. If the task force recommendations are implemented, there will be room in the industry for small businesses akin to craft breweries.

No to the LCBO?

The Task Force recommends that wholesale distribution be regulated by the provinces and territories, and that retail sales be regulated by the provinces and territories in close collaboration with municipalities.

In Ontario, there has been talk that marijuana would be distributed by the LCBO. For those outside Ontario, the LCBO is a Crown corporation that retails and distributes alcoholic beverages in the province of Ontario. However, the Task Force has recommended that there be no co-location of alcohol and tobacco and cannabis sales, "wherever possible", and that if co-location "cannot be avoided", appropriate safeguards must be put in place.

If implemented, how this recommendation translates into practice will be interesting. In theory it would rule out sales by the LCBO and convenience stores and other businesses that sell cigarettes. Might specialty stores or dispensaries be the exclusive retailer of marijuana?

The Task Force has also recommended that there be limits on the density and location of storefronts, including appropriate distances from schools, community centres and public parks, and that there also be access via a direct-to-consumer mail-order system.

Personal Growing Permitted?

The Task Force recommends allowing people to grow their own, up to a maximum of four plants per residence and subject to other recommended restrictions. One of the recommendations in this area is that growing your own be subject to "oversight and approval by local authorities". How that would function on a practical level is a mystery.

Social Smoking?

The Task Force has recommended extending the current restrictions on public smoking of tobacco products to the smoking of cannabis products. However, they also recommend that dedicated places such as cannabis lounges and tasting rooms ought to be permitted. Interestingly, they also recommend implementing safeguards to prevent the co-consumption with alcohol, which leads to interesting questions for bars, restaurants and social club owners.

Summary

From a business perspective, the legalization of marijuana is going to touch a wide range of industries. From growers, to distributors, to retailers, to landlords, to marketers, to bar and restaurant owners, there are going to be an abundance of business opportunities in an industry that will come into existence almost literally out of nowhere.

What is also clear is that the industry is also going to be extremely heavily regulated and that anyone who wishes to participate in the industry is going to need help navigating the administrative landmines that are going to be set out by the various levels of government. This especially so in light of the Task Force's recommendation to allow for significant fines and penalties for non-compliance with the law.

Summary of Recommendations

Minimizing Harms of Use

With respect to minimizing harms of use, the Task Force recommends that the federal government:

  • Set a national minimum age of purchase of 18, acknowledging the right of provinces and territories to harmonize it with their minimum age of purchase of alcohol
  • Apply comprehensive restrictions to the advertising and promotion of cannabis and related merchandise by any means, including sponsorship, endorsements and branding, similar to the restrictions on promotion of tobacco products
  • Allow limited promotion in areas accessible by adults, similar to those restrictions under the Tobacco Act
  • Require plain packaging for cannabis products that allows the following information on packages: company name, strain name, price, amounts of delta-9-tetrahydrocannabinol (THC) and cannabidiol (CBD) and warnings and other labelling requirements
  • Impose strict sanctions on false or misleading promotion as well as promotion that encourages excessive consumption, where promotion is allowed
  • Require that any therapeutic claims made in advertising conform to applicable legislation
  • Resource and enable the detection and enforcement of advertising and marketing violations, including via traditional and social media
  • Prohibit any product deemed to be "appealing to children," including products that resemble or mimic familiar food items, are packaged to look like candy, or packaged in bright colours or with cartoon characters or other pictures or images that would appeal to children
  • Require opaque, re-sealable packaging that is childproof or child-resistant to limit children's access to any cannabis product
  • Additionally, for edibles:
    • Implement packaging with standardized, single servings, with a universal THC symbol
    • Set a maximum amount of THC per serving and per product
  • Prohibit mixed products, for example cannabis-infused alcoholic beverages or cannabis products with tobacco, nicotine or caffeine
  • Require appropriate labelling on cannabis products, including:
    • Text warning labels (e.g., "KEEP OUT OF REACH OF CHILDREN")
    • Levels of THC and CBD
    • For edibles, labelling requirements that apply to food and beverage products
  • Create a flexible legislative framework that could adapt to new evidence on specific product types, on the use of additives or sweeteners, or on specifying limits of THC or other components
  • Provide regulatory oversight for cannabis concentrates to minimize the risks associated with illicit production
  • Develop strategies to encourage consumption of less potent cannabis, including a price and tax scheme based on potency to discourage purchase of high-potency products
  • Require all cannabis products to include labels identifying levels of THC and CBD
  • Enable a flexible legislative framework that could adapt to new evidence to set rules for limits on THC or other components
  • Develop and implement factual public education strategies to inform Canadians as to risks of problematic use and lower-risk use guidance
  • Conduct the necessary economic analysis to establish an approach to tax and price that balances health protection with the goal of reducing the illicit market
  • Work with provincial and territorial governments to determine a tax regime that includes equitable distribution of revenues
  • Create a flexible system that can adapt tax and price approaches to changes within the marketplace
  • Commit to using revenue from cannabis as a source of funding for administration, education, research and enforcement
  • Design a tax scheme based on THC potency to discourage purchase of high-potency products
  • Implement as soon as possible an evidence-informed public education campaign, targeted at the general population but with an emphasis on youth, parents and vulnerable populations
  • Co-ordinate messaging with provincial and territorial partners
  • Adapt educational messages as evidence and understanding of health risks evolve, working with provincial and territorial partners
  • Facilitate and monitor ongoing research on cannabis and impairment, considering implications for occupational health and safety policies
  • Work with existing federal, provincial and territorial bodies to better understand potential occupational health and safety issues related to cannabis impairment
  • Work with provinces, territories, employers and labour representatives to facilitate the development of workplace impairment policies

The Task Force further recommends that:

  • In the period leading up to legalization, and thereafter on an ongoing basis, governments invest effort and resources in developing, implementing and evaluating broad, holistic prevention strategies to address the underlying risk factors and determinants of problematic cannabis use, such as mental illness and social marginalization
  • Governments commit to using revenue from cannabis regulation as a source of funding for prevention, education and treatment

Establishing a Safe and Responsible Supply Chain

With respect to establishing a safe and responsible supply chain, the Task Force recommends that the federal government:

  • Regulate the production of cannabis and its derivatives (e.g., edibles, concentrates) at the federal level, drawing on the good production practices of the current cannabis for medical purposes system
  • Use licensing and production controls to encourage a diverse, competitive market that also includes small producers
  • Implement a seed-to-sale tracking system to prevent diversion and enable product recalls
  • Promote environmental stewardship by implementing measures such as permitting outdoor production, with appropriate security measures
  • Implement a fee structure to recover administrative costs (e.g., licensing)
  • Regulate CBD and other compounds derived from hemp or from other sources

The Task Force recommends that the wholesale distribution of cannabis be regulated by provinces and territories and that retail sales be regulated by the provinces and territories in close collaboration with municipalities. The Task Force further recommends that the retail environment include:

  • No co-location of alcohol or tobacco and cannabis sales, wherever possible. When co-location cannot be avoided, appropriate safeguards must be put in place
  • Limits on the density and location of storefronts, including appropriate distance from schools, community centres, public parks, etc.
  • Dedicated storefronts with well-trained, knowledgeable staff
  • Access via a direct-to-consumer mail-order system

The Task Force recommends allowing personal cultivation of cannabis for non-medical purposes with the following conditions:

  • A limit of four plants per residence
  • A maximum height limit of 100 cm on the plants
  • A prohibition on dangerous manufacturing processes
  • Reasonable security measures to prevent theft and youth access
  • Oversight and approval by local authorities

Enforcing Public Safety and Protection

With respect to enforcing public safety and protection, the Task Force recommends that the federal government:

  • Implement a set of clear, proportional and enforceable penalties that seek to limit criminal prosecution for less serious offences. Criminal offences should be maintained for:
    • Illicit production, trafficking, possession for the purposes of trafficking, possession for the purposes of export, and import/export
    • Trafficking to youth
  • Create exclusions for "social sharing"
  • Implement administrative penalties (with flexibility to enforce more serious penalties) for contraventions of licensing rules on production, distribution, and sale
  • Consider creating distinct legislation – a "Cannabis Control Act" – to house all the provisions, regulations, sanctions and offences relating to cannabis
  • Implement a limit of 30 grams for the personal possession of non-medical dried cannabis in public with a corresponding sales limit for dried cannabis
  • Develop equivalent possession and sales limits for non-dried forms of cannabis

The Task Force recommends that jurisdictions:

  • Extend the current restrictions on public smoking of tobacco products to the smoking of cannabis products and to cannabis vaping products
  • Be able to permit dedicated places to consume cannabis such as cannabis lounges and tasting rooms, if they wish to do so, with no federal prohibition. Safeguards to prevent the co-consumption with alcohol, prevent underage use, and protect health and safety should be implemented

With respect to impaired driving, the Task Force recommends that the federal government:

  • Invest immediately and work with the provinces and territories to develop a national, comprehensive public education strategy to send a clear message to Canadians that cannabis causes impairment and that the best way to avoid driving impaired is to not consume. The strategy should also inform Canadians of:
    • the dangers of cannabis-impaired driving, with special emphasis on youth; and
    • the applicable laws and the ability of law enforcement to detect cannabis use
  • Invest in research to better link THC levels with impairment and crash risk to support the development of a per se limit
  • Determine whether to establish a per se limit as part of a comprehensive approach to cannabis-impaired driving, acting on findings of the Drugs and Driving Committee, a committee of the Canadian Society of Forensic Science, a professional organization of scientists in the various forensic disciplines
  • Re-examine per se limits should a reliable correlation between THC levels and impairment be established
  • Support the development of an appropriate roadside drug screening device for detecting THC levels, and invest in these tools
  • Invest in law enforcement capacity, including Drug Recognition Experts and Standardized Field Sobriety Test training and staffing
  • Invest in baseline data collection and ongoing surveillance and evaluation in collaboration with provinces and territories

Medical Access

With respect to Medical Access, the Task Force recommends that the federal government:

  • Maintain a separate medical access framework to support patients
  • Monitor and evaluate patients' reasonable access to cannabis for medical purposes through the implementation of the new system, with action as required to ensure that the market provides reasonable affordability and availability and that regulations provide authority for measures that may be needed to address access issues
  • Review the role of designated persons under the ACMPR with the objective of eliminating this category of producer
  • Apply the same tax system for medical and non-medical cannabis products
  • Promote and support pre-clinical and clinical research on the use of cannabis and cannabinoids for medical purposes, with the aim of facilitating submissions of cannabis-based products for market authorization as drugs
  • Support the development and dissemination of information and tools for the medical community and patients on the appropriate use of cannabis for medical purposes
  • Evaluate the medical access framework in five years

Implementation

With respect to implementation of the legalization, the Task Force recommends that the federal government:

  • Take a leadership role to ensure that capacity is developed among all levels of government prior to the start of the regulatory regime
  • Build capacity in key areas, including laboratory testing, licensing and inspection, and training
  • Build upon existing and new organizations to develop and co-ordinate national research and surveillance activities
  • Provide funding for research, surveillance and monitoring activities
  • Establish a surveillance and monitoring system, including baseline data, for the new system
  • Ensure timely evaluation and reporting of results
  • Mandate a program evaluation every five years to determine whether the system is meeting its objectives
  • Report on the progress of the system to Canadians
  • Take a leadership role in the co-ordination of governments and other stakeholders to ensure the successful implementation of the new system
  • Engage with Indigenous governments and representative organizations to explore opportunities for their participation in the cannabis market
  • Provide Canadians with the information they need to understand the regulated system
  • Provide Canadians with facts about cannabis and its effects
  • Provide specific information and guidance to the different groups involved in the regulated cannabis market
  • Engage with Indigenous communities and Elders to develop targeted and culturally appropriate communications

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Matt Maurer
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