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  • Writer's pictureFroese Law

Understanding Canada’s Cannabis Industry

The legalisation of cannabis is a huge milestone, not just for Canada but for the rest of the world. Canada has become only the second country in the world, after Uruguay, to legalise the recreational use of cannabis at a federal level. More importantly, however, Canada is the first G7and G20 country to legalise cannabis country-wide. All eyes will be watching eagerly to see whether Canada can deliver in this hugely promising market. There is no doubt that many countries will attempt to replicate this ground-breaking market. Canada, having set this train in motion, will be the country that everyone is trying to duplicate. Whether you are a distributor, cultivator or a company sponsored by a cannabis company, the exposure will never be greater so make sure your company is camera ready to take advantage of this revolutionary market.

Economic Impact of the Canadian Cannabis Industry

Although there has been debate about how to best implement legislation there has been no confusion over the economic benefits that legalisation will bring. There have been various reports claiming that the Cannabis market could bring up to a $22.6 billion economic boost annually. Wouldn’t that be dope! Its effects will impact numerous markets including: health, crime, business and technology, retail, e-commerce, pop culture, hospitality and so on. Whatever your business, it appears that cannabis has the potential to put you at an all-time high!

Overview of the Legalization of Medical Use of Cannabis

Canada’s venture into the cannabis industry started with legalizing medicinal use. Again, Canada was the first nation to federally legalise the medical use of cannabis. Although, the regulations relating to medical Cannabis have been changed numerous times over the past, the law is now in full swing and there are record numbers of people that are legally entitled to the medical use of cannabis in Canada. Here is a brief overview of the law and how it has changed since its inception:

  • Pre 2001 the only way to access medical cannabis was through the discretionary powers of the Minister of Health. Cannabis was completely prohibited under The Controlled Drug and Substances Act. However, s.56 of the Controlled Drug and Substances Act allowed the minister of health to apply an exemption from the Act if it was for a “medical or scientific purpose.” This power was completely at the discretion of the Health Minister, which led to its constitutional challenge.

  • The ban against medical marijuana was challenged in the case of R v Parker where the court held that s.56 was unconstitutional as the blanket prohibition violated Parker’s fundamental rights to liberty and security of the person. The court confirmed that individuals who have a recognised medical need do have a right to access cannabis for medical purposes and s.56 was therefore incompatible with this right.

  • In 2001, following the court’s decision the government created a set of regulations to help those who needed medical cannabis to legally obtain it. The regulation was called the Marijuana Medical Access Regulations. This allowed those who needed medical cannabis to be legally able to grow it themselves.

  • The previous regulation was soon challenged in the court which led to the Marijuana for Medical Purposes Regulation (“ACMPR”) replacing the previous regulation. This regulation was much more commercially focused and allowed for the setting up of a licensing system whereby individuals could purchase the marijuana instead of having to grow it themselves.

  • The latest governing regulation allows those who have been authorised by a medical professional to either purchase from licensed producers or in certain cases produce their own cannabis. The current regulations seem to strike the better balance than all previous regulations because it allows those that need medical cannabis to have easy access, instead of having to jump through numerous regulatory hoops.

Both the government and the courts have had years to perfect the law relating to medical cannabis which will hopefully help ensure the efficiency of the legislation in relation to recreational cannabis.

Overview of the Recreational Use of Cannabis

The Cannabis Act legalized the recreational use of marijuana Canada-wide. It received royal assent in June 2018 and will come into force on October 17, 2018. The governance of recreational cannabis is divided between the federal and provincial governments, who can also grant municipalities additional governing authority. The Cannabis Act provides for key provisions relating to criminal offences associated with cannabis such as how it can be advertised and how much can be carried. This will ensure uniformity across the whole of Canada. However, there will be provincial variations in how cannabis is retailed and distributed as the provinces have the jurisdiction over this area. This creates a more complex framework for businesses operating in the market across Canada. The provinces have been given the discretion to decide how the cannabis will be distributed and retailed. Provinces have the power to decide whether to create a government run retail and e-commerce system or create a private sphere where businesses can compete with little government oversight. This is an important area to keep an eye on as provinces are still developing and changing their stance on this issue. It is important to be aware of how each province is planning to operate as there could be huge variety which will greatly influence how the market takes shape.

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