



Thursday, April 27, 2017On April 13, 2017, the federal government released the much anticipated proposed Cannabis Act (Bill C-45 – An Act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts) (the “Cannabis Act”) to introduce the framework for recreational cannabis in Canada. The Cannabis Act was introduced concurrently with Bill C-46 – An Act to amend the Criminal Code (offences relating to conveyances) and to make consequential amendments to other Acts.
The Cannabis Act generally follows the recommendations laid out by the Task Force on Cannabis Legalization and Regulation in its final report published on December 13, 2016 (the “Task Force Report”) about which we have previously written (Task Force on Cannabis Legalization and Regulation Delivers Report to Federal Government). The overarching theme of the Cannabis Act is to prevent youth from accessing cannabis, promote and protect public health and safety and deter cannabis-related criminal activity. The Cannabis Act provides the federal government with significant authority to regulate the possession, production, distribution and sale of cannabis for recreational purposes.
The Cannabis Act will require the individual provinces and territories to enact legislation that contains minimum conditions to address public health and safety objectives across the country. Provinces and territories will also have the ability to increase the minimum age requirements, lower the possession limit, impose additional requirements on personal cultivation and set additional restrictions and local requirements related to cannabis, including zoning and additional public consumption restrictions.
The federal government has indicated that it expects the Cannabis Act to be brought into force, as it may be amended, by July 1, 2018. Much of the interpretation of the Cannabis Act, including many of the commercial aspects of the recreational regime, will depend on the regulations that will be released at a later date and will provide additional clarity in significant areas.
Several of the key provisions of the Cannabis Act are summarized below:
Types of Cannabis
The Cannabis Act contemplates the sale of a variety of forms of cannabis including dried cannabis, cannabis oils, fresh cannabis, cannabis plants and cannabis plant seeds. With respect to cannabis-infused foods, commonly referred to as ‘edibles’, which have been widely discussed in the media, the government has indicated that following the coming into force of the Cannabis Act, the government will develop regulations to permit the sale of edible products. We would expect that such regulations will address the appropriate levels of THC (or tetrahydrocannabinol), the psychoactive ingredient in cannabis, in edibles, among other limitations within the regulations aimed at ensuring only safe edible products are permitted in Canada.
Substances containing nicotine, caffeine or ethyl alcohol are prohibited from also containing dried cannabis, cannabis oil or fresh cannabis.
Sale and Possession
As expected following the Task Force Report, the Cannabis Act will prohibit anyone from selling cannabis or cannabis accessories to any person under the age of 18. Each province and territory may raise the minimum age at its discretion.
Adults will be permitted to possess up to 30 grams of dried cannabis in a public place, which includes any place to which the public has access as of right or by invitation, any motor vehicle located in a public place or in any place open to public view. Adults will also be permitted to cultivate up to four cannabis plants that do not exceed 100 centimeters in height each. The four plant maximum is limited to a “dwelling-house” and applies irrespective of the number of adults residing in such dwelling-house. Possession of a cannabis plant in public is prohibited. There are currently no restrictions within the Cannabis Act as to whether cannabis plants may be cultivated indoors or outdoors within the definition of “dwelling-house”.
Young persons between the ages of 12 and 18 are prohibited from possessing or distributing more than 5 grams of dried cannabis (or its equivalent). Provinces and territories will be provided with the ability to prohibit the possession of any amount of cannabis by youth.
Promotion, Packaging and Labelling
The Cannabis Act contains promotion and packaging restrictions that are intended to protect youth from being persuaded through marketing or advertising to purchase and consume cannabis. The depiction of persons, characters or animals or the use of testimonial or endorsement will be prohibited under the Cannabis Act. While the Cannabis Act contemplates the promotion of cannabis at the point of sale, such promotion will be limited to the availability and/or price of cannabis and cannabis accessories or services.
Similar to the restrictions on “lifestyle advertising” in the Tobacco Act, the Cannabis Act places broad prohibitions on the use of a brand element in promoting cannabis, cannabis accessories or services related to cannabis if such brand element is presented in a manner that associates it with or evokes a positive or negative emotion about or image of a way of life that includes glamour, recreation, excitement, vitality, risk or daring. The Cannabis Act defines “brand element” as a brand name, trademark, tradename, distinguishing guise, logo, graphic arrangement, design or slogan. We expect the regulations of the Cannabis Act will provide further clarity on what will be permitted but, generally speaking, promotion will be severely limited. It appears that business-to-business promotion between licensed producers (“LPs”) not directed at consumers will not be subject to the strict promotion restrictions.
The Cannabis Act does provide an exception for the promotion of cannabis, cannabis accessories or cannabis-related services by means of informational promotion (i.e., promotion of the THC or cannabidiol content or other ingredients for the consumer’s knowledge and potentially the emotive effects of one strain versus another) or brand-preference promotion (i.e., promotion of characteristics of a brand). The intent is to provide consumers with factual, accurate information on which informed decisions can be made with respect to recreational cannabis. Informational promotion and brand-preference promotion of cannabis or cannabis accessories and services are only permitted if the promotion is presented as follows:
- in a communication that is individually addressed and sent to a person 18 years of age or older and is identified by name in such communication;
- in a place where young persons are not permitted by law;
- by means of telecommunication where the person responsible for the content has taken reasonable steps to ensure that the promotion cannot be accessed by a young person; or
- as prescribed by the Cannabis Act, in regulations to be developed.
- providing or selling cannabis to youth;
- using youth to commit a cannabis-related offence;
- possession by an adult over the personal possession limit or of illicit cannabis;
- possession of any amount by an “organization” which includes a public body, body corporate, society, company, firm, partnership, trade union or municipality;
- distribution, sales, imports or exports in contravention of the Cannabis Act; and
- production or cultivation of cannabis that is not authorized by the Cannabis Act.