Progress on Legalized Recreational Cannabis

Overview

Food and Drug Law
Food and Drug Regulatory LawWhen will recreation marijuana be legalized in Canada? Will it be regulated in the same way as tobacco? What distribution channels will be adopted? We address these questions and more.

The federal government has indicated that legislation regulating recreational marijuana will be introduced in the spring of 2017. Canadian Health Minister, Jane Philpott, made this announcement at a recent special session on global drug issues at the UN General Assembly. Although the Minister was vague on details, the campaign refrain of “legalize, regulate and restrict” provides clues on the approach the government is likely to take. Marijuana consumption and incidental possession will be removed from the federal Criminal Code, according to the Liberal campaign website, and a new set of laws outlining legal use and punitive measures for those who provide the drug to minors, drive under the influence or sell marijuana outside the new regulatory framework will be introduced.1 A federal/provincial/territorial task force will be created with input from public health and law enforcement experts. And of course, appropriate federal and provincial excise taxes will be applied.

Before shaping the landscape of this new industry, the government will need to jump some legal hurdles. Canada is a signatory to a number of international treaties on illicit drug use. The government will need to find a way to carve out exemptions from some aspects of these treaties and diligently fulfill their obligation under others—for instance, guarding against illegal export.

Legal obstacles aside, there is precedence for the concerted regulation of substances between federal and provincial governments in Canada. Tobacco, for instance, is federally regulated through the Tobacco Act, yet nearly every province has additional legislation that touches on virtually every facet of its use from its sale, distribution, and marketing, to designating non-smoking areas and banning flavoured tobacco products. The two levels of government may adopt a similar regime to regulate marijuana.

Sales and distribution schemes to mainstream marijuana are also making news headlines as different players in the retail and pharmacy industries scope out ways to get involved in an industry that is projected to generate $5 billion in tax revenue alone. In the medical marijuana sphere, pharmacy chains are reported to be in discussions with licensed marijuana producers across the country to distribute to their drugstores. News reports on recreational marijuana have focused on regulated retailers like the Liquor Control Board of Ontario (LCBO), a Crown corporation mandated to sell liquor, wine and beer. Using a model like the LCBO would enable the government to generate tax from sales but also a stream of profits. The LCBO or an analogous retail entity may be a sensible option especially in the face of the government’s objective of having a regulated and restricted marijuana market. Other options could include private-sector outlets, online operators, and marijuana “cafes.”

Conclusion

Indications from political leaders suggest marijuana intended for medical use will be sold and distributed differently than marijuana for recreational use. How these differences in sales will manifest themselves remains to be seen but, between the Court’s repudiation of the MMPR, a six-month deadline for its replacement and highly anticipated regulations promised for next spring, the issue of marijuana, for both medical and recreational use, is set to be a focal point in federal policy development in the near future. However the government decides to proceed, major changes are on the horizon for the narcotics regulatory landscape in Canada.

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1 Available online at https://www.liberal.ca/realchange/marijuana.

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