Alberta Unveils Cannabis Distribution Plans

On October 4, 2017, the Government of Alberta (Province) released its proposed Alberta Cannabis Framework (Framework). The Framework is based on the Province’s four policy priorities: keeping cannabis away from children; protecting public health; promoting safety on roads, in workplaces and in public spaces; and limiting the illegal market for cannabis. Although the Framework does not conclusively settle the issue of sale, the Province is currently contemplating two separate approaches for the sale of recreational cannabis in Alberta — one private and one public.

The public option would see the Province adopt a similar model as Ontario and restrict the distribution and sale of cannabis to government-owned and operated stores. For information on Ontario’s distribution plan, please see our September 2017 Blakes Bulletin: Ontario Unveils Cannabis Distribution Plans. This approach would provide the Province with a high-level of oversight as it would have direct control over every aspect of the sale of recreational cannabis. However, unlike Ontario and the Cannabis Control Board (which follows the Liquor Control Board of Ontario model), the Province has no framework in place to facilitate the public sale of cannabis and would require that significant resources be expended to develop one. It would also limit the economic benefits of cannabis sales to the Province and oppose its stated objective of diversifying an economy currently struggling to recover from depressed commodity prices.

The other option would permit private retail sale and is similar to the existing framework for alcohol in Alberta, overseen by the Alberta Gaming and Liquor Commission (AGLC). A private retail model would encourage both large and craft industry participants to engage in the growth and sale of cannabis in Alberta and would have the added benefit of a more responsive and consumer-tailored system that allows small businesses to access the economic benefits associated with the cannabis industry. The Province has indicated that it will not permit the concurrent online sale of recreational cannabis without greater certainty that age verification can occur.

In either case, all sales of recreational cannabis in Alberta will be restricted to specialized retail outlets and distribution and wholesaling will be directly managed by the AGLC. Retail locations will be banned from selling alcohol, tobacco or any other pharmaceuticals. The hours of operation and the locations of such retail outlets will also be highly regulated to ensure that they are not in close proximity to places such as schools, community centres and liquor stores. All staff employed in retail cannabis sale will be required to be at least 18 years of age and must receive training to inform customers about the potency of products and risks of cannabis use.

The Province also intends to implement and enforce the strict advertising, labelling and packaging rules that have been proposed by the federal government. Retail locations will be required to provide consumers with point-of-purchase signage and educational materials regarding the risks of cannabis and responsible cannabis consumption. These restrictions will generally mirror the current regime in place for tobacco, which restricts advertising to locations where no minors are permitted. Restrictions will also be applied to retail displays and in-store promotions.

The Province has acknowledged that any tax on cannabis will have to be competitive in order to compete with the black market and intends to co-ordinate with the federal government, which recently indicated that it expects such tax to be approximately C$1/gram, to reach a practical taxation strategy for cannabis. It is unclear whether the Province will insist on the inclusion of additional tax to the sale of recreational cannabis beyond the one proposed by the federal government.

PERSONAL CONSUMPTION

The consumption of cannabis will be regulated in a similar manner as alcohol and tobacco. Albertans over the age of 18 will be able to purchase cannabis from a government-regulated store and will be permitted to possess 30 grams or less in public. Adults will also have the freedom to grow up to four cannabis plants on their property. Such plants will have a height restriction of one metre and must be grown inside. Renters, tenants, and those who live in multi-family dwellings may be restricted from growing or using cannabis at home through rules put in place by their rental agreements or condominium by-laws.

Albertans will be permitted to consume cannabis privately in their homes and publicly in spaces where smoking tobacco is currently permitted. However, the consumption of cannabis will be strictly banned in vehicles and restricted in areas frequented by children, including hospital and school properties, and any other place where tobacco is restricted or alcohol is sold. It will be illegal to drive a vehicle while under the influence of cannabis or use cannabis in a vehicle. Additionally, fines will be imposed on minors who are caught with five grams of recreational cannabis or less and criminal charges may be pursued where such minors are found in possession of more than five grams of cannabis.

The Province has also indicated that it intends to review current occupational health and safety regulations to address potential impairment issues that may result from the legalization of cannabis.

If the Framework will impact your organization, you can submit your views to the Province online until October 27, 2017 at midnight.

For further information, please contact:

Chris Nyberg                            403-260-9707
James Donnelly                        403-260-9771

or any other member of our Cannabis group.

Blakes periodically provides materials on our services and developments in the law to interested persons. For additional information on our privacy practices, please contact us at privacyofficer@blakes.com. Blakes Bulletin is intended for informational purposes only and does not constitute legal advice or an opinion on any issue. We would be pleased to provide additional details or advice about specific situations if desired.

For permission to reprint articles, please contact the Blakes Client Relations & Marketing Department at 416-863-4345 or teona.baetu@blakes.com. © 2017 Blake, Cassels & Graydon LLP