Ontario Becomes First Province to Introduce Cannabis Legislation

Written By Ranjeev S. Dhillon, Aaron E. Sonshine, Rami Chalabi and Nicholas Nevins

On November 1, 2017, Ontario became the first province in Canada to introduce legislation related to cannabis, a month after announcing its comprehensive cannabis plan. The province introduced Bill 174, which enacts three new acts and amends the Highway Traffic Act. The three new acts being introduced by Bill 174 are:

• the Cannabis Act, 2017;
• the Ontario Cannabis Retail Corporation Act, 2017; and
• the Smoke-Free Ontario Act, 2017.

The purpose of the Cannabis Act, 2017 (Act) includes establishing prohibitions in order to protect youth, public health and safety, as well as to deter illicit activities in relation to cannabis through appropriate enforcement and sanctions. Following the plan laid out by the province a month ago, the Act provides that no person be permitted to sell cannabis other than the Ontario cannabis retailer established under the Ontario Cannabis Retail Corporation Act, 2017. The Ontario Cannabis Retail Corporation Act, 2017, creates the Ontario Cannabis Retail Corporation (Corporation), a crown corporation overseen by the Liquor Control Board of Ontario with the exclusive right to sell cannabis in Ontario.  Fourteen municipalities have been identified by the Corporation to have stores that sell cannabis. There is an exception that allows for a party other than the Corporation to sell cannabis within Ontario provided that it is for medical purposes in accordance with applicable federal laws or if the cannabis is being sold to the Corporation.

The Act also confirms that the minimum age for possessing cannabis in Ontario will be 19, and places restrictions on where cannabis may be consumed in Ontario, similar to prohibitions on alcohol consumption. Pursuant to the Act, no person will be able to consume cannabis in any public place, a workplace, a vehicle or boat, or any other prescribed place, essentially limiting the consumption of recreational cannabis to private residences. However, the Act does provide a carve-out for medical cannabis users, subject to any prohibitions or restrictions put in place by subsequent regulations or the Smoke-Free Ontario Act, 2017. The Smoke-Free Ontario Act, 2017 repeals the Smoke-Free Ontario Act and the Electronic Cigarettes Act, 2015 and applies to tobacco products, vapor products and medical cannabis. The ability to smoke medical cannabis will be prohibited in a number of places, including motor vehicles, enclosed public places, enclosed workplaces, schools, child care centers, and the reserved seating areas of sporting events. This however, is also subject to certain exceptions, including controlled use areas in long-term care homes, and designated hotel rooms.

The province aims to crack down on illegal dispensaries throughout the province by imposing steep fines for anyone caught distributing or selling cannabis illegally. Under the Act, storefront properties that continue to operate could be fined up to $1 million, police will be granted interim closure authority, meaning they can immediately shut down a premises participating in illegal activities, and individuals working at an illegal dispensary can be fined up to $250,000 and face a jail sentence of up to two years.

There has yet to be a formal announcement regarding pricing, with the government stating decisions will be made after more details are made available from the federal government, but that the intention is to try to keep prices low in order to deter people from using the illicit market.

Bill 174 is not law yet. Given the intended date of the legalization of recreational cannabis of July 1, 2018, the legislature will likely move swiftly in passing Bill 174, which is in its first reading.

The Bennett Jones Cannabis team are the leading professional advisors to provide legal and strategic guidance to all cannabis participants as well as provide connectivity to our network as the Canadian cannabis industry continues to evolve.

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