Canada: Task Force On Cannabis Legalization And Regulation Delivers Report To Federal Government

Last Updated: January 4 2017
Article by Charlie Malone, Danny Kharazmi, Jeffrey Hergott and Davia Wang

On December 13, 2016, the Task Force on Cannabis Legalization and Regulation (the "Task Force") published its long awaited and much anticipated report, A Framework for the Legalization and Regulation of Cannabis in Canada (the "Report"), containing 80 recommendations for the Federal Government to consider as it prepares to draft legislation giving effect to legalizing and regulating the recreational use of cannabis in Canada, which the Federal Government has undertaken to table in Parliament in the spring of 2017.

Following Justin Trudeau's election campaign promise to legalize the recreational use of cannabis in Canada, the Minister of Justice and Attorney General of Canada, the federal Minister of Public Safety and Emergency Preparedness, and the federal Minister of Health announced the formation of the Task Force on June 30, 2016, with the mandate of taking a public health approach to providing recommendations on the design of a new legislative and regulatory framework for the legalization and regulation of recreational cannabis in Canada. The Federal Government's stated objectives include: (i) protecting young Canadians by keeping cannabis out of the hands of youth, (ii) keeping profits associated with cannabis production and distribution out of the hands of criminals, and (iii) protecting the health and safety of Canadians as it pertains to cannabis production and use.

In order to fulfill its mandate, the Task Force engaged in widespread consultation across Canada with, among others, provincial, territorial and municipal governments, legal and medical experts, law enforcement representatives, as well as representatives in other jurisdictions where recreational cannabis has been legalized (e.g., Colorado and Washington in the United States and Uruguay) and received more than 30,000 responses from various individuals and organizations in response to an online public consultation process. In addition to canvassing these various stakeholders, the Task Force also drew from Canada's own experience and practices from the regulation of alcohol and tobacco, as well as Canada's existing regulatory framework for medical cannabis.

The Report offers 80 recommendations on the production, distribution and restriction of the use of cannabis and its derivative products, reflecting a balanced, public health approach towards the legalization of cannabis by implementing strict regulations aimed at minimizing the harms associated with cannabis use and reducing the scope and scale of an illicit cannabis market.

Some key recommendations from the Report are summarized below:

  • The production of cannabis and its derivative products should be regulated by the Federal Government, in a similar fashion to how the Federal Government presently regulates the production of medical cannabis.
    • This is generally perceived as a big win for the 36 currently licensed producers of medical cannabis in Canada that have gone through the rigorous approval process under the existing medical cannabis regime, which has proven to be a barrier to entry into the medical cannabis market.
  • The recommended minimum age for purchasing cannabis be set at 18.
    • While this is on the lower end of the suggested range of ages, the Task Force is of the view that setting the legal age for purchase too high would not deter youth from gaining access to cannabis through the illicit market. Instead, the Report recommends that provincial and territorial governments should engage youth in education programs to discourage and delay the use of cannabis.
  • Because the provinces and territories will have power over the distribution and sale of cannabis, like they do over alcohol and tobacco, each province and territory will be free to increase the minimum age above 18.
    • The Task Force recommends allowing personal cultivation of cannabis for non-medical purposes subject to oversight and approval by local authorities.
  • Personal cultivation should be limited to four plants per residence, with a height limit of 100 cm per plant. Again, it will be interesting to watch how this recommendation unfolds in Parliamentary debates on the proposed legislation and we suspect that there will be lengthy discussions on this topic. If this recommendation makes its way into the legal regime for recreational cannabis, it will also be interesting to see how the restrictions on the number and size of plants will actually be monitored and/or policed.
    • The amount of non-medical cannabis that individuals are permitted to carry on their person in a public place should be limited to 30 grams.
    • Comprehensive restrictions on the packaging, branding and marketing of cannabis and its derivative products should be implemented.
  • The packaging ought to be plain and clear and include only minimal information on the labels, including price, company name, strain, and levels of delta-9-tetrahydrocannabinol ("THC") and cannabidiol.
  • Any promotion or marketing that is allowed should be restricted in a similar fashion as with tobacco, alcohol and pharmaceutical products. The Report also speaks to restrictions on sponsorship, branding and endorsement, which is an avenue certain licensed producers under the medical cannabis regime have already started to explore in anticipation of the recreational market. This will be an interesting facet to watch for when the Federal Government begins its Parliamentary debates on the proposed legislation, since in an open and free market, with a goal of increasing diversity of product (a recommendation in the Report) and quality of product, branding will be imperative to product differentiation and ownership of market share.
  • Any product that is deemed to be "appealing to children," is packaged to look like candy, is packaged in bright colours, with cartoon characters or other pictures or images that would appeal to children, should be prohibited. This is particularly the case in respect of so called 'edible' products that can often take the form of food items appealing to children (e.g., gummy bears).
    • There should be variable tax rates or minimum prices linked to THC contents (i.e., higher taxes for cannabis with higher THC levels) in the same way that certain provinces discourage the use of higher content alcohol products by taxing them at a higher rate. We note that the Report did not recommend a differentiated tax regime for medical and recreational sales of cannabis, which has disappointed certain currently licensed producers of medical cannabis.
    • A seed-to-sale tracking system is recommended to prevent diversion and assist product quality control.
    • Mixed cannabis products should be prohibited (e.g., cannabis-infused alcoholic beverages or cannabis products with tobacco, nicotine or caffeine).
  • The regulation of the distribution of cannabis and its derivative products should be shared between provinces and territories, and municipalities.
  • Access via both retail distribution and mail-order system should be allowed.
  • Where possible, no co-location of alcohol and cannabis should be permitted but when co-location cannot be avoided, appropriate safeguards must be put in place.
  • Potential for pharmacy distribution, albeit, making such a change would also require regulatory changes at the provincial and territorial level, given the role that provincial and territorial regulatory and licensing authorities play in regulating the scope of practice of pharmacists.
  • There ought to be limits on the density and location of storefronts, including an appropriate distance from schools, community centres and public parks.
    • Maintain criminal offences for illicit production, trafficking, possession for the purposes of trafficking, possession for the purposes of export, and import/export, and trafficking to youth.
    • Create administrative penalties (with flexibility to enforce more serious penalties) for contraventions of licensing rules on production, distribution and sale.
    • A separate medical access framework for patients should be maintained and be re-evaluated in five years.

The Report, for the most part, has been welcomed by Canada's currently licensed producers of medical cannabis. The recommendation that production be regulated at the federal level and model the current medical cannabis regime in respect of good manufacturing standards will certainly benefit the current producers of medical cannabis who have been pioneers in developing this industry in its regulated form.

Interestingly, the Task Force also recommends that diversity be encouraged, which we see as an opportunity for those producers that have been operating in the so called 'grey' (but really illegal) market of supplying dispensaries with their product. At the news conference announcing the Report's recommendations held on December 13, 2016, the Task Force Chair, the Honourable Anne McLellan, went so far as to say that she would like to see the currently illegal producers come under the legal regime by making application to be a federally-regulated licensed producer when legalization occurs.

An overall takeaway from the Report is the realization that there is still much to research; for example, the science behind the testing for impaired driving under the influence of cannabis is in its infancy and having a framework to test impaired drivers will likely be a condition precedent to the Federal Government enacting any legislation for the legalization of recreational cannabis.

The major hurdle in the effort to legalize cannabis in Canada remains a balancing act between access, affordability, product quality, public safety and the on-going research regarding the health benefits of cannabinoid-based drugs. Although the Report signifies a step forward in the legalization of cannabis in Canada, it also acknowledges that there remains a long and arduous road ahead. Indeed, the Federal Government will move cautiously and slowly.

In his speech from the throne on December 4, 2015, Governor General David Johnston's delivery of the governing priorities of Justin Trudeau's Liberals included a pledge to legalize, regulate and restrict access to marijuana. With the Report now delivered, proposed legislation is expected to be tabled in Parliament in the spring of 2017. Any new federal law in Canada must go through a legislative process beginning with an introduction of the bill (the first reading) in the House of Commons, followed by a second reading whereby the bill is debated by the members of the House of Commons and following which a vote is taken to determine whether the bill will proceed to the Committee Stage, wherein every detail of the bill is dissected line by line. Once the Committee has finished studying the bill, it will report back to the House of Commons and a further debate (the third reading) will take place. If the bill passes the third reading, it goes through a similar process in the Senate, before finally receiving Royal Assent and becoming law.

Given the complexity of the task and the level of coordination required among different levels of government, the implementation of the regulatory framework will likely take longer than expected. We expect there to be considerable debate in the House of Commons regarding, among other things, the minimum legal age, the ability to grow cannabis at home and distribution channels. This will not be a rubber stamping process and, while the proposed legislation is anticipated to be tabled in the spring of 2017, we do not foresee that the law(s) will be enacted any time before the third quarter of 2018, and even possibly as late as early 2019, which could align dangerously close to the next federal election. While we presume that the Federal Government will accept a vast majority of the recommendations contained in the balanced and detailed Report, there is no obligation to do so. A change in the Federal Government could also have a major impact on specific recommendations in the Report (e.g., the minimum legal age, growing at home, taxation levels and uses of tax revenue), and even the whole concept of the legalization of the recreational use of cannabis.

Wildeboer Dellelce LLP represents a variety of industry participants, including licensed producers, licensed producer applicants, research and development labs and investment banks raising capital for industry participants, and has acted on numerous transactions and mandates in the medical and recreational marijuana space (where currently permitted, including Colorado, Washington and Uruguay).

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions