Cannabis Legalization: What To Expect

This post is the first in a series from Alexander Holburn regarding the pending legal use of non-medical cannabis in BC. Below is a summary of the existing laws on cannabis and the pending changes coming under the new federal and provincial legislation. 

Weeding Through the Legal Landscape for Cannabis

With the recent vote by the Canadian Senate on June 7, Bill C-45, the federal Cannabis Act, returns to Parliament for a final vote by MPs before returning to the Senate one last time, meaning the legalization of non-medical cannabis is one step closer to reality. Concurrently, BC’s provincial government recently passed two pieces of legislation to address the pending legalization: (a) the Cannabis Control and Licencing Act (“CCLA”), which regulates the possession and consumption of cannabis, establishes a retail licencing regime, and creates a number of civil offences for contravention of the CCLA; and (b) the Cannabis Distribution Act (“CDA”), which establishes a public wholesale distribution monopoly under the provincial Liquor Distribution Branch.

Existing Legal Regime Permits Medical Use Only

Drugs and controlled substances are primarily regulated by the federal Controlled Drugs and Substances Act (“CDSA”) and the Food and Drugs Act,, and the related regulations of each. Until Bill C-45 comes into force, cannabis is a controlled substance scheduled under the CDSA and subject to the Narcotic Control Regulations (“NCR”). Cannabis is further regulated by the Access to Cannabis for Medical Purposes Regulations (“ACMPR”), which was the federal government’s response to court decisions that found Canadian laws violated protections under the Charter of Rights and Freedoms to life, liberty and security of the person by restricting the reasonable, safe and continuous supply of medical marijuana.

Under the ACMPR, individuals authorized by a health care practitioner to access marijuana for medical purposes can:

(a)          purchase marijuana from a Licensed Producer (“LP”);

(b)          produce a limited amount of marijuana for their own medical purposes; or

(c)          designate another individual to produce marijuana for them.

Under the ACMPR, individuals who ordinarily reside in Canada and have a prescription for medical marijuana: (i) have the option of registering as a client of an LP and purchasing marijuana from one of 104 LPs in Canada (22 of which are in BC); and (ii) produce a limited amount of marijuana or designate another individual to produce it for them, with the number of plants based on the individual’s daily dose (as authorized by the individual’s physician) and the average yield of a cannabis plant growing either indoors or outdoors.

Bill C-45, the Cannabis Act, Permits Recreational Use

The Cannabis Act will legalize and regulate the use of non-medical, or recreational, cannabis across Canada. The Cannabis Act will control the possession, production, distribution, sale, importation and exportation of cannabis, while deferring to the provinces for much of the regulation surrounding sale and distribution. The Cannabis Act provides transitional provisions related to the ACMPR and the CDSA, including converting all licenses for producers under the ACMPR into licenses under the Cannabis Act.

Some of the highlights under the Cannabis Act include:

(a)          Individuals of legal age will be permitted to cultivate up to four legal cannabis plants per residence, regardless of how many people live in the residence. There was initially a size limit per plant, however this limit has been removed. It is unclear what constitutes a “legal cannabis plant” at this time.

(b)          Provincial, territorial and municipal governments may be able to impose restrictions related to personal cultivation, depending on the pending, final vote on the Cannabis Act.

(c)          Of note to retailers and those responsible for packaging, only information-type promotions will be allowed. This limits advertising to factual, accurate information about cannabis products, and information that will differentiate between brands. These restrictions are meant to avoid advertising that would be seen as appealing to youth.

(d)          Federal regulation of edible cannabis products is expected to follow within one year.

Highlights of BC’s Cannabis Regime and Related Rules

The CDA authorizes the government to buy and sell cannabis, and introduces a regime where the BC Liquor Distribution Branch will be the exclusive wholesale distributor of non-medical cannabis for the province and the exclusive provider of online sales. The CDA allows for both standalone, public retail stores, to be called BC Cannabis Stores and run by the BC Liquor Distribution Branch, and private retail sales of cannabis. The Liquor Control and Licensing Branch will oversee the licensing and retail of all cannabis sales. For private stores, restrictions for retailers in urban areas will not allow cannabis sales in stores selling liquor and tobacco (there may be exceptions in rural areas).

The CCLA requires a license for the sale, production and supply of cannabis. Issuing licenses will be based on the public interest, and through prescribed criteria. Individuals who were operating an illegal dispensary will not necessarily be excluded from being considered for a license, nor will individuals who have a prior criminal record.

In response to Bill C-45’s authorization of the personal growing of cannabis plants, the CCLA maintains a limit of four and requires that the plants not be visible from any public place nor grown in a home used for a daycare. In a situation where more than one adult lives in a residence, and one of those adults is authorized to grow medical cannabis, the other adult may grow up to four plants for personal use.

The CCLA restricts anyone under 19 years of age from possessing, consuming, selling, marketing or assisting in any way with the sale or consumption of cannabis. Minors will not be allowed to enter a store that sells cannabis, even if accompanied by a parent or guardian.

For consumption in public, smoking and vaping is banned: on school and hospital property; in public areas such as parks and playgrounds, skate parks, bus stops and recreational areas; in any workspace where a person performs services in return for compensation; and in vehicles and boats.    The CCLA places a positive duty on the owner, tenant or manager of any of the aforementioned places to take reasonable steps to prevent the smoking or vaping of cannabis in the area. Failure to do so is a contravention of the act. Business owners need to know that cannabis cannot be supplied to anyone who appears intoxicated from drugs or alcohol, and must not be readily accessible to anyone operating a motor vehicle. Penalties for various contraventions of the CCLA range from $2,000 to $100,000 and up to twelve months imprisonment.

Looking Ahead

The lifting of the prohibition on recreational cannabis will change the way individuals, small businesses, non-profit organizations and larger corporations interact with cannabis in BC and across Canada.

If you have questions on how this new regulatory framework for cannabis and cannabis-related products will impact business law, securities law, strata governance, employment law, and other areas of law, please do not hesitate to contact Scott Allen.