Canadian Federal Government Unveils Long-Awaited Cannabis Legislation

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April, 18, 2017


On April 13, 2017, the Trudeau government unveiled its highly anticipated legislation to legalize access to marihuana. The legislative package includes two Bills: one, the “Cannabis Act”, that creates a new federal-provincial regime to produce and sell cannabis, and a second that strengthens the laws related to impaired driving by users of both marihuana and alcohol. Amendments to numerous other statutes, as well as an educational program covering the health risks posed by cannabis, will also be implemented to help integrate the provisions of the Cannabis Act into Canadian law. In all, the newly proposed legislation establishes a legal framework for the production, possession, distribution and sale of cannabis and cannabis products, as well as the enforcement of cannabis related offences.

The purpose of the new legislation is essentially threefold: (i) to protect public health and safety by restricting the access of youth to cannabis, (ii) to deter illegal activities with appropriate sanctions and enforcement, and (iii) to provide access to a quality-controlled supply of cannabis. Given the focus of the new law, and presumably to avoid the impression that the Liberal government is promoting the use of cannabis, the term ‘recreational use’ is notably not contained in the Bill.

The discussion below includes a brief overview of the proposed legislation.

Restricting the Access of Youth to Cannabis

Adults over the age of 18 (though provinces can set a higher minimum) will be entitled to possess up to 30 grams of dried cannabis in public, and to grow up to four plants per residence for personal use. Those below the age of 18 will not be permitted to legally possess cannabis. However, if young persons between the ages of 12 and 18 are caught with 5 grams of cannabis or less, they will not face criminal prosecution for such possession.

Deterring Illegal Activities

The counterbalance for the permissible possession of (recreational) cannabis is the addition of certain key amendments to the Criminal Code. The legislation creates a new criminal offence for selling or providing cannabis to youth below the age of 18, punishable by up to 14 years in prison. The bill also proposes penalties of up to three years in prison, or a fine of $5 million, to anyone who creates cannabis products that are appealing to youth. This will likely have repercussions beyond just the sale and production of cannabis products, for example the impact on permissible marketing and advertising activities in this bourgeoning but regulated industry.

New provisions were introduced against drug-impaired driving, including a new drug-impaired driving offence, as well as a roadside testing system in which police would be given powers to obtain a saliva sample and to screen drivers for alcohol and drug use. Drivers with a small amount of THC in their blood would face a fine of up to $1,000, while those with high levels (or those who also have alcohol in their blood) would face up to 10 years in prison.

Ensuring Access to a Quality-Controlled Supply

In order to ensure the quality of the product, commercial producers of cannabis will be required to be licensed. At present, there are only 43 companies that have the necessary authorizations from Health Canada to produce cannabis. This is a particularly strict regulatory standard where less than 1% of applicants have successfully undergone the process and have been awarded the permission to sell cannabis and cannabis products (including plants and seeds). Moreover, it will remain illegal to import and export cannabis and cannabis products (i.e. cannabis oils, cannabis edibles) without a valid license to do so. Whether the licensing requirements will need to be amended to accommodate new cannabis products and their derivatives is yet to be determined.

Cannabis for Medical Purposes

The regime governing the access to medical cannabis will remain unchanged.

What’s Next?

The government plans to officially legalize adult access to cannabis by July 2018. This timing is thought by a number of legislators, particularly provincial governments, to be ambitious. Still to be determined are the rules governing the distribution and sale of cannabis, including whether store front operations will be permitted, and which matters are to be managed by the provinces and local municipalities. Questions surrounding pricing, taxation, quality standards and inspection procedures to monitor compliance, among others, also remain outstanding and unanswered by the current draft of the Cannabis Act. For businesses waiting on the sidelines to launch into the recreational cannabis arena, the proposed legislation is a giant leap forward. But upon a closer look there would appear to be a long road ahead to arrive at a comprehensive regulatory framework that meets and balances the needs of governments, law enforcement, business and consumers.

As always, Fasken Martineau is available to assist with understanding and implementing these reforms.