Canada: High Time To Enter The Cannabis Industry: Canadian Federal Government Introduces Legislation To Legalize Recreational Cannabis

Last Updated: April 27 2017
Article by Rick Moscone

On April 13, 2017, the federal government introduced the highly anticipated Bill C-45, An Act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts (the "Act"). The proposed Act creates a strict legal framework for controlling the production, distribution, sale and possession of recreational cannabis in Canada. The policy rationale behind this proposed legislation is to set national standards that will more effectively protect youth and reduce the role of the illegal market and organized crime.

The proposed Act lifts the ban on the recreational use of cannabis in Canada dating back to 1923. However, until the Act receives Royal Assent, current laws apply and recreational cannabis remains illegal unless expressly authorized. Following Royal Assent, the federal government intends to bring the Act into force no later than July, 2018. Until then, Canada's medical cannabis framework, the Access to Cannabis for Medical Purposes Regulations ("ACMPR"), will remain in force.

The principal features of the Act are set out below.

1. Products, Personal Use and Cultivation

The Act permits the sale of five cannabis products: dried cannabis, cannabis oils, fresh cannabis, plants and seeds. The Act restricts including nicotine, caffeine or alcohol in any of these cannabis products. Notably, the Act prohibits the sale of edibles or beverages. However, the federal government has stated that it intends on authorizing the sale of these products once stronger production regulations and controls are developed.

The Act restricts the sale of cannabis to adults 18 years of age and over ("Adults"). However, the provinces and territories will have discretion to set access at a higher age. The Act also allows Adults to possess up to 30 grams of legal dried cannabis or its equivalent in other cannabis products in public. Furthermore, the Act allows Adults to legally produce cannabis products without a licence for personal use at home (including edibles). However, Adults are only permitted to grow up to four plants per household at a maximum height of 100 centimetres.

2. Provinces, Territories and Municipalities

The federal government has granted the provinces and territories substantial discretionary power over implementing and regulating the proposed legislation. The Act provides that the provinces and territories in collaboration with municipalities may develop, implement, maintain and enforce systems to oversee the distribution and retail sale of cannabis. Specifically, provinces and territories will have the authority to:

  • lower the possession limit;
  • impose additional requirements on personal cultivation;
  • increase the minimum age for cannabis consumption;
  • set additional restrictions and local requirements related to cannabis, such as setting zoning restrictions for cannabis-related businesses and restricting where cannabis can be consumed in public; and
  • develop, implement, maintain and enforce systems to oversee the distribution and retail sale of cannabis.

3. Licensing, Production, Distribution and Promotion

All producers of recreational cannabis under the Act will need to be federally licensed to operate. Once the Act comes into force, the federal government will establish an application process and criteria for individuals or corporations applying to become federally licensed cannabis producers. However, the existing 43 federally licensed producers under the ACMPR will continue to hold their licences and will be deemed to be licensed under the Act. As a result, once the Act comes into force, current licensed producers will sit in an advantageous position as they will likely be the federal government's preferred option for providing the initial commercial supply of recreational cannabis.

As mentioned earlier, the Act also gives the provinces and territories authority for developing, implementing, maintaining and enforcing systems to oversee the distribution and retail sale of cannabis. As a result, individuals and corporations interested in breaking into these industries will need to comply with provincial or territorial criteria in addition to the Act. In jurisdictions without a regulated retail framework, Adults will be able to purchase cannabis online from a federally licensed producer through the mail or by courier.

The Act takes major steps to protect Canadian youth. The Act creates a new offence for involving a minor to commit an offence relating to the distribution, sale, import, export, or production of cannabis. In addition, there is a prohibition on the selling, packaging, and labelling of cannabis products that are considered appealing to youth and also a prohibition on the sale of cannabis through a self-service display or vending machine.

The Act also places hefty restrictions on how a producer may advertise its products and promote its brand. Specifically, the Act prohibits promoting cannabis or any of its brand elements in a way that "evokes a positive or negative emotion about or image of, a way of life such as one that includes glamour, recreation, excitement, vitality, risk or daring." These advertising restrictions might cause headaches for current licensed producers that have already signed or are planning to sign promotional agreements with individuals to endorse their brand. Unlike advertising in the alcohol industry, licensed producers will not able to glamourize the lifestyle associated with consuming cannabis products.

4. International Obligations

Under the proposed Act, the importation and exportation of cannabis and cannabis products remains illegal except under specific circumstances. Licences and permits will be authorized for the importation or exportation of cannabis only in respect of cannabis for medical or scientific purposes or in respect of industrial hemp.

5. Bill C-46

In addition to the Act, which regulates the production, distribution, sale and possession of recreational cannabis, the federal government has also introduced legislation that regulates drug-impaired driving by amending and introducing new offences and procedures to the Criminal Code. Bill C-46, An Act to amend the Criminal Code (offences relating to conveyances) and to make consequential amendments to other Acts, authorizes peace officers who suspect a driver has a drug in their body to demand that the driver provide a sample of a bodily substance for analysis by drug screening equipment that is approved by the Attorney General of Canada. Critics of the proposed legislation suggest that this may breach one's constitutional right to be secure against unreasonable search or seizure. However, the constitutional effects of the proposed legislation remain to be seen.

What to Expect in the Future

Despite the federal government's comprehensive regulatory framework, there still remains a number of unaddressed issues. For instance, there are still questions surrounding pricing, taxation, packaging and marketing, a regulated retail framework and how the licensing regime will be administered. As a result, we can expect the federal government to continue consultations over the course of the next few months and can expect additional rules and regulations to be released in the near future.

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
Dentons
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Dentons
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