Canada: The Future Is Green, But Cloudy

Last Updated: August 29 2018
Article by Fiona Brown

Canada is the first G7 economy to fully legalize recreational cannabis. The legalization of recreational cannabis on October 17, 2018 will result in significant societal changes. This article highlights some of the social issues on the horizon, and provides some commentary on how they might be resolved.

Past Cannabis Convictions

One of the overriding objectives of the federal Cannabis Act is to "prevent young persons from accessing cannabis .... and to deter criminal activity by imposing serious criminal penalties for those operating outside the legal framework." This is an ambitious goal, given that Canadian youth ranked first for cannabis use out of 43 countries in a 2010 report from the World Health Organization.

The Cannabis Act (Canada) creates two new criminal offences, both of which relate to providing cannabis to young persons. However, the fate of individuals with past convictions for cannabis-related offences remains unclear. Health Canada has indicated that prior offenders may not be barred from participating in the industry. However, advocacy groups such as the Campaign for Cannabis Amnesty are seeking broader amnesty measures, such as retroactive pardons. This movement is likely to gain momentum following legalization.

Cannabis in the Workplace

There is no absolute right to use cannabis at work and the legalization of recreational use will not substantively change this principle.

Access to cannabis for medical purposes has been legal in Canada since 2000. Accordingly, many employers already have policies in place addressing the use of cannabis in the workplace. Human rights legislation and caselaw impose a very broad duty on employers to accommodate medical cannabis users and employees addicted to cannabis to the "point of undue hardship." The scope of this duty to accommodate has been heavily litigated and unlikely to change in response to the legalization of recreational use. Accommodation is a highly fact-specific determination and may involve modified hours, duties and/or time off work on an unpaid basis.

Recreational use may be more contentious and subject to change as the caselaw develops. As a first step, employers should update existing or craft new cannabis policies to address the legalization of recreational cannabis. When drafting policies, employers may also consider looking to existing case law regarding non-prescription medication and alcohol. As with alcohol, employers may prohibit the use and possession of cannabis in the workplace and discipline employees who attend work while impaired.

Many employers operating in safety-sensitive industries are considering whether to implement drug and alcohol testing. In fact, certain employers have called for legislation to explicitly permit post-incident, reasonable cause, random and other drug testing. Employers should be aware of the courts' reluctance to permit wide-ranging drug testing. It will be interesting to see whether drug testing becomes more common, as it is in the United States.

Food, Beverages ... and Cannabis

The food and beverage industries rank amongst the largest in Canada. Agriculture, viticulture, restaurants and bars account for a significant portion of Canadian employment and economic activity. The cannabis industry is currently barred from the sector entirely – but not for long, as edible cannabis products are set to be legalized within a year of the Cannabis Act (Canada) coming into force.

The future of cannabis in the food services sector is currently unknown. However, there is likely to be significant demand for spaces permitting social consumption, such as in restaurants and bars, or at public events such as concerts. Given the legislation's overarching goal of protecting the youth, it seems unlikely that cannabis consumption will be permitted in venues accessible to young persons. The precise rules surrounding such spaces have yet to be devised, but it seems likely that the food and beverages industry will be watching closely – if not actively lobbying – for favourable changes.

Furthermore, the regulations currently prohibit the sale of any mixture of cannabis and ethyl alcohol (the active ingredient in beer, wine and liquor). That has not stopped entrepreneurial businesses from investing in scientific research to develop, for example, cannabis-based beer – and from receiving government funding to do so. These businesses (and indeed the public) are likely anticipating future legal developments that will permit cannabis-based alcohol products. However, the precise nature of such changes remains uncertain.

Cannabis at the Border

Twenty-nine states, plus Washington D.C., Puerto Rico and Guam, have legalized medical cannabis, while nine states, in addition to Washington D.C., have legalized cannabis for recreational purposes. However, at the federal level, cannabis remains a Schedule I drug under the Controlled Substances Act of 1970. This unusual legislative dissonance – where two highly-interdependent countries sharing an extended border disagree on the legality of a drug – has already led to a small number of Canadians working in the cannabis industry receiving lifetime bans from the United States.

At present, the bans appear to affect only individuals who support the illicit cannabis industry in the United States, such as investors and other businesspersons. However, the risks may evolve as the Canadian cannabis industry develops. Tourists may also be affected, as previous use of cannabis is also grounds for denial of entry into the United States.


The first several years of legalization will undoubtedly generate a lot of data which will, in turn, inform the legislative direction the government may take. Legalization is not a one-off event, but an evolving story – and we will be observing closely as the story develops.

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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