Ontario: First Out of the Gate With Proposed Cannabis Legislation

On November 1,1 the Government of Ontario introduced its own cannabis legislation in preparation for target date for federal legalization of recreational cannabis, July 1, 2018.2 The proposed provincial legislation (Bill 174) aims to safely regulate the use and distribution of recreational cannabis, with the objectives of protecting youth, safeguarding public health and safety, and deterring illicit cannabis activities. If passed, Bill 174 would enact the Cannabis Act, 2017 and Ontario Cannabis Retail Corporation Act, 2017, repeal the Smoke-Free Ontario Act and the Electronic Cigarettes Act, 2015 and replace them with the Smoke-Free Ontario Act, 2017, as well as amend the Highway Traffic Act. This bulletin focuses on Ontario's proposed Cannabis Act, 2017.

What You Need To Know

Ontario's proposed legislation is consistent with the framework published in September 2017.3

  • Not Yet Law. Bill 174 is in its first reading of the legislative process. Given the target date of cannabis legalization by the federal government, Ontario's legislature will likely proceed quickly with this bill. In its news release, the Ontario government has expressed its intentions to consult with municipalities, Indigenous communities, and other stakeholders.
  • Retail. Bill 174 provides that no person is permitted to sell cannabis or buy cannabis from persons other than Ontario's official cannabis retailer, established under the Ontario Cannabis Retail Corporation Act, 2017. Ontario's cannabis retailer will operate through stand-alone stores with oversight by the Liquor Control Board of Ontario (LCBO).
  • Minimum age. Bill 174 will set the minimum age to legally possess, consume, purchase, distribution, cultivate, or propagate cannabis at 19. The sale and distribution of cannabis to persons under 19 will be prohibited.
  • Landlords. The proposed legislation places restrictions on landlords, who are prohibited from knowingly permitting their premises to be used for the unlawful sale or distribution of cannabis. Landlords are required by the legislation to take reasonable measures to prevent such unlawful activities, the failure of which may result in penalties imposed on the landlord. Both private and commercial landlords should remain cautious and diligent with respect to potential unlawful cannabis sale and distribution activities that take place on their premises.
  • Places of consumption. Bill 174 would restrict cannabis from being consumed in public places, workplaces, vehicles and boats. This restriction does not apply to medical cannabis users.
  • Penalties. Persons who contravene the proposed Act or its regulations are guilty of an offence. For corporations, directors or officers who cause, authorize, permit or participate in the offence can be found guilty as well. The general penalty imposed by the proposed legislation is a maximum fine of $250,000 for corporations and $100,000 or one year of imprisonment for individuals. With respect to acts that contravene the sale and distribution restrictions for cannabis, the following penalties apply:
    • an individual's first conviction: a fine not exceeding $250,000 or an imprisonment term not exceeding two years, or both;
    • an individual's subsequent conviction: a fine not exceeding $100,000 for each day that the offence continues or an imprisonment term not exceeding two years, or both;
    • a corporation's first conviction: a fine not less than $25,000 and not exceeding $1,000,000;
    • a corporation's subsequent conviction: a fine not less than $10,000 and not exceeding $500,000 for each day that the offence continues.
  • Enforcement and compliance. In addition to various enforcement powers given to police officers, the proposed legislation also provides that a court may order a premises be closed for a maximum period of two years if a person was found to contravene sale and distribution or landlord restrictions.
  • Exemptions. The following activities are exempt from the proposed Act and its regulations:
    • activities surrounding cannabis for medical purposes,
    • activities surrounding cannabis research or education; and
    • prescribed activities with respect to the cannabis supply chain.

    The regulatory regime ensures that the regulatory frameworks governing cannabis medical uses, research uses, and recreational uses remain separate and co-exist in parallel.

What's Next

Although Bill 174 is in its first reading of the legislative process, Ontario's Attorney General has indicated the government's intention to pass the bill by year's end. There will be an opportunity for stakeholders to provide comments before the proposed legislation and accompanying regulations are enacted. We will provide you with updates to the legalization process as they become available.

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1 See: http://www.ontla.on.ca/web/bills/bills_detail.do?locale=en&Intranet=&BillID=5276

2 See: https://www.torys.com/insights/publications/2017/04/breaking-ground-canadas-cannabis-framework

3 See: https://www.torys.com/insights/publications/2017/09/monopoly-on-cannabis-ontarios-plan-for-retail-sales

To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

For permission to republish this or any other publication, contact Janelle Weed.

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