Canada: Cannabis Is The New Kale? Ontario Veggie Growers Are Turning A New Shade Of "Green"

Making the Switch to Cannabis

Ahead of the federal government's anticipated legalization of recreational cannabis on October 17, 2018, some Canadian vegetable growers are turning to cannabis for relief from years of thinning profit margins.1 In addition to the higher revenue potential of cannabis compared to traditional crops, in some cases cannabis production requires less labour and moisture than traditional crops.2 Also consider recent reports that suggest current Canadian production levels of cannabis could fall short of demand.3

As a result, many growers and greenhouse operators see cannabis as a way to cope with the long-standing challenges of vegetable production, including foreign competition and high costs.4 Can we expect to see a shift from the production of green vegetables to green buds?

Before rushing to meet the demand for cannabis, growers in Ontario or owners of commercial space planning to lease to a cannabis production tenant should be aware of the environmental laws and regulations applicable to cannabis operations.5

Cannabis Act and Provincial Environmental Laws

The Cannabis Act6 introduces stringent regulation of growing facilities. See for example, Part IV (Physical Security Measures) of the Cannabis Regulations, including video surveillance, access restrictions and physical barriers.7

While the Cannabis Act does not specifically address environmental standards for producers, cannabis growers and property owners must be aware of provincial environmental laws governing emissions, waste and water use. These include the laws set out in the Ontario Water Resources Act,8 Pesticides Act,9 Nutrient Management Act, 2002,10 and Environmental Protection Act.11 Failure to comply with these laws can result in regulatory Orders and prosecutions.

Whether growing tomatoes or cannabis, it is critical for facility owners and operators to be aware of their legal obligations and liability. Environmental laws are often applied to both landlord and tenant. What follows is an overview of some of the requirements under Ontario's environmental legislation that may apply to cannabis production facilities.

Permits and Approvals

The OWRA and Pesticides Act require growers and greenhouse operators to obtain permits and approvals prior to operating a greenhouse or grow operation. Required permits and approvals may include the following:

  • Permit to Take Water – if the operation is taking more than 50,000 litres of water per day from a lake, stream, river, pond, or groundwater source12
  • Environmental Compliance Approval (ECA) – where the operation will be:

    • discharging sewage (including wastewater, storm water, process water and sanitary sewage),13 or
    • using an existing sewage works
  • Pesticide licence or permit – where the operation will be applying certain pesticides.14

An operation may also require a building permit for the installation of septic tank systems.

Local municipalities may require additional permits and building specifications for operations.

Managing Greenhouse Nutrient Feedwater

Ontario producers may use greenhouses for cannabis production as an alternative to other types of indoor industrial facilities. Greenhouses can be preferred as operators can maintain a year-long production schedule while limiting emissions because of reduced use of lighting and air conditioning.

Where greenhouse operations use closed circulation systems, the resulting nutrient rich solution, known as greenhouse nutrient feedwater (GNF), can be used to fertilize other agricultural crops.

The Greenhouse Nutrient Feedwater Regulation15 under the NMA sets out requirements for managing GNF generated by registered greenhouses. These include provisions about:

  • transportation of GNF between agricultural operations
  • application and storage of GNF
  • soil sampling and analysis requirements, and
  • annual, daily, and hourly application rate limits.

It is important for greenhouse operators to fully understand the options available under the GNF Regulation and their downsides. Some options require the use of a contingency process where processes do not work out as planned. This can result in product damage and operation shutdowns.

Waste Regulation and Other Provincial Laws

Waste cannabis material from cultivation or production is considered to be a "controlled substance" under Schedule II of the Controlled Drugs and Substances Act.16 Licensing requirements for cannabis production demand that any waste or controlled substance must be secured and destroyed.17 However, waste materials from cannabis production, including organics, may also be subject to the EPA and its detailed waste regulations.

The EPA prohibits the discharge of contaminants that are likely to cause an adverse effect. Similarly, the OWRA prohibits discharge or deposit of any material into any water body or watercourse that may impair water quality.18 Greenhouse and other grow operations with nutrient management strategies and plans may be required to have a contingency plan in place for handling spills related to manure or other prescribed materials. The emission of odours may also lead to nuisance complaints from nearby landowners.

The EPA and NMA regulate the spreading of non-agricultural waste materials on agricultural land. ECAs or non-agricultural source material plans may be required where an operation will spread non-agricultural waste materials on agricultural land.

Compliance Inspections

The Ministry of Environment, Conservation and Parks (MECP) may send an Environmental Officer to inspect operations approved under ECAs. MECP inspections may be unplanned and unannounced, especially in the event of a spill, complaint, or where there are ongoing compliance issues.

Orders & Prosecutions

MECP can issue Orders to current owners (and former owners) of a property and those with environmental management and control.

Non-compliance with an Order can result in an MECP prosecution of the orderee who is in breach. The Crown may also prosecute where there is a violation of an environmental law and despite no breach of an Order.

In R. v. Westbrook Greenhouses Limited,19 a greenhouse operator was charged under OWRA, s. 30(1) for discharging nutrient loaded water into a creek. The greenhouse operator, Westbrook Greenhouses Limited (Westbrook), applied "Kool Ray" to the roof of its greenhouse to help block out the UV light from the sun. Kool Ray entered the drainage system of the greenhouse and migrated into a nearby creek. A resident driving by observed a whitish colour to the creek and reported to the Ministry of the Environment and Climate Change's (MOECC, as it then was) Spills Action Centre. The MOECC investigated and found concentrations of nitrate at the discharge pipe that exceeded known toxicity thresholds for amphibians. Westbrook pleaded guilty and was fined $12,000 plus a victim fine surcharge.

Going Forward

Whether growing vegetables or cannabis, greenhouse and industrial growing facilities must pay close attention to applicable environmental laws. Failure to comply with laws can result in prosecutions and fines. Those seeking to establish new greenhouses or to "green" their existing greenhouses should seek legal advice to manage and reduce their exposure to environmental liability.

With the assistance of Lauren Wortsman, Summer Student.

Footnotes

1. Armina Ligaya, The Toronto Star, "Greenhouse Growers Take Chance on Cannabis in Push for Green", February 1, 2018, online: (https://www.thestar.com/business/2018/02/01/greenhouse-growers-take-chance-on-cannabis-in-push-for-green.html). Tracey Lindeman, The Globe and Mail, "Vegetable growers convert to cannabis to help boost margins", January 21, 2018, online: (https://www.theglobeandmail.com/report-on-business/small-business/sb-growth/vegetable-growers-convert-to-cannabis-to-help-boost-margins/article37677955/).

2. Armina Ligaya, Financial Post, "Greenhouse growers uproot other crops for a stake in lucrative cannabis market", February 1, 2018, online: (https://business.financialpost.com/pmn/commodities-business-pmn/agriculture-commodities-business-pmn/greenhouse-growers-uproot-other-crops-for-a-stake-in-lucrative-cannabis-market).

3. Armina Ligaya, Financial Post, "Legal cannabis supply to meet 30 to 60 per cent of demand: C.D. Howe report", October 5, 2018, online: (https://business.financialpost.com/pmn/commodities-business-pmn/agriculture-commodities-business-pmn/legal-cannabis-supply-to-meet-30-to-60-per-cent-of-demand-c-d-howe-report).

4. Supra, note 1.

5. Willms & Shier Environmental Lawyers LLP is focused on the full spectrum of environmental law, including agriculture, food production and natural resources law. Richard is the leader of the firm's Farms, Food and Cannabis practice. Our seventeen lawyers make us the largest private sector environmental law firm in Canada. 

6. An Act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts, Bill C-45, expected to come into effect on October 17, 2018.

7. Cannabis Regulations (SOR/2018-144).

8. RSO 1990, c O 40 [OWRA].

9. RSO 1990, c P 11.

10. SO 2002, c 4 [NMA].

11. RSO 1990, c E 19 [EPA].

12. OWRA, s 34(1).

13. Ibid, s 53(1).

14. Pesticides Act, RSO 1990, c P 11; O Reg 63/09. 

15. O Reg 300/14 [GNF Regulation].

16. Controlled Drugs and Substances Act (SC 1996, c 19)

17. https://www.canada.ca/en/health-canada/services/drugs-medication/cannabis/industry-licensees-applicants/licensing-summary/guide.html

18. OWRA, s 30(1).

19. 2008 CarswellOnt 10107 (OCJ). 

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
 
In association with
Related Topics
 
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