Ontario Introduces New Legislation to Regulate Recreational Cannabis

On November 1, 2017, the Ontario government introduced Bill 174, Cannabis, Smoke-Free Ontario and Road Safety Statute Law Amendment Act, 2017 (Bill) in the Ontario legislature, to establish regulations governing the sale, distribution, cultivation and consumption of cannabis in the province.

In particular, the Bill seeks to enact the Cannabis Act, 2017 (Cannabis Act) and Ontario Cannabis Retail Corporation Act, 2017 (OCRCA), amend the Highway Traffic Act (HTA), and repeal and replace the Smoke-Free Ontario Act and Electronic Cigarettes Act, 2015 with the Smoke-Free Ontario Act, 2017(Smoke-Free Ontario Act).

If passed, the Bill will have a significant impact on the recreational cannabis market in Ontario, and other provinces will be sure to pay close attention to the progress of the Bill. Until the Bill passes through all three readings of the Legislative Assembly and receives royal assent, existing laws will continue to apply.

The Bill is consistent with the previously announced cannabis framework described in our September 2017 Blakes Bulletin: Ontario Unveils Cannabis Distribution Plans and our July 2017 Blakes Bulletin: Cannabis Legalization: Ontario Seeks Public Input to Develop Provincial Laws. Below are some highlights of the proposed Bill, broken down by the various acts the Bill seeks to enact or amend.

CANNABIS ACT

Broadly, the Cannabis Act will govern the sale, distribution, cultivation and consumption of cannabis in Ontario. The legislation focuses on shutting down illegal cannabis dispensaries. Amongst other things, it will:

  • Set the legal minimum age for purchase, consumption, possession and cultivation of cannabis at 19, which aligns with the Ontario minimum age on alcohol and tobacco use.
  • Prohibit use of cannabis in public spaces, workplaces, vehicles and boats. These restrictions, however, do not apply to medical cannabis users who are only subject to restrictions in the Smoke-Free Ontario Act (see below).
  • Give police officers the authority to require that a premise be vacated if there are reasonable grounds to believe that the Cannabis Act is being contravened. If a charge is ultimately laid for the unlawful sale or distribution of cannabis, or for knowingly permitting such activities, police officers are further authorized to temporarily close such premises.
  • Establish a penalty structure, setting out the associated fines and incarceration periods for contravention of certain prohibitions under the Cannabis Act:
    • With respect to the unlawful sale and distribution of cannabis, there is a maximum penalty of C$100,000 and/or up to two years in jail for individuals upon first conviction. The penalties escalate on subsequent convictions. For businesses, the fine ranges from C$25,000 to C$1-million on first convictions and escalates on subsequent convictions.
    • Penalties for the prohibited consumption of cannabis in a public place will range from up to a C$1,000 fine on first conviction to up to a C$5,000 fine on subsequent convictions. The province has indicated that going forward it will work with municipal partners, the Alcohol and Gaming Commission of Ontario and other organizations to explore the possibility of introducing specified establishments where recreational cannabis could be consumed.

These provisions also apply to landlords who knowingly allow illegal cannabis to be sold on their property.

The Cannabis Act also proposes that the attorney general can enter into specific arrangements and agreements with band councils with respect to the sale, distribution, purchase, possession, consumption, cultivation, propagation, and harvesting of cannabis on a reserve.

OCRCA

The OCRCA effectively establishes a provincial monopoly over cannabis distribution, providing the Ontario Cannabis Retail Corporation (OCRC) with the exclusive right to sell cannabis in Ontario. The OCRC will be overseen by the Liquor Control Board of Ontario (LCBO). The attorney general has suggested that while the legal name will be the OCRC, the actual stores will like take on a different name.

The OCRC plans to open approximately 150 standalone stores by 2020, including 40 stores by July 2018 and 80 by July 2019. The OCRC is permitted to open agency stores for distribution. This could track the approach taken for the LCBO’s agency stores, which allow for alcohol sales in grocery stores and other similar businesses in rural parts of Ontario.

Similar to the provisions of the Cannabis Act, there are specific rules allowing for arrangements and agreements to be entered into with respect to cannabis that is sold and delivered to a purchaser on a reserve.

SMOKE-FREE ONTARIO ACT

The Smoke-Free Ontario Act expands upon restrictions relating to the public consumption of medical cannabis. The smoking of medical cannabis is prohibited in a number of places, including: enclosed public places and workplaces, schools, child-care centres, early-years programming centres, private schools, indoor common areas in condominiums, apartment buildings and university residences, and reserve seating areas in sports and entertainment venues.

This is subject to certain exemptions, which allow individuals who are able to smoke medical cannabis to smoke in specified areas (such as in scientific research facilities, hospices, and designated indoor spaces in long-term care homes, retirement homes, supportive housing residences and psychiatric facilities).

HTA

In addition to other changes, the amendments made to the HTA primarily seek to regulate the presence of drugs or alcohol in an individual’s body when operating a motor vehicle.

For further information, please contact:

Alexis Levine                             416-863-3089

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.

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