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Cannabis is being legalized – here’s what happens next in Ontario

On October 17, 2018, the sale, possession and use of recreational cannabis will be legal in Canada as a result of the federal Cannabis Act and its Regulations.[1]  When this happens, provincial legislation will also come into effect. 

This legal update provides an overview of some of the key areas of cannabis law in Ontario, and is intended as general guidance only.  If you have specific questions or concerns, please contact Awanish Sinha, Matthew Kelleher, Paul Kunynetz, Jessica Firestone or Victoria Zed. We would be pleased to assist you. 

What’s the status?

The sale, possession and use of all cannabis, except for medical purposes, are currently illegal.  Right now, the only place one can legally purchase cannabis for medical purposes is online from a licensed producer (“LP”). The dispensaries clustered around downtown Toronto and other areas continue to be illegal.

Canada has experienced an undeniable cultural shift since the government's announcement of a pending policy change in 2015. “Legalization became real when people started calling it ‘cannabis’ instead of one of the slang alternatives,” says Awi Sinha, Co-Head of McCarthy Tétrault’s Cannabis Law Group.  “Three years ago, when I said ‘cannabis’ in a boardroom, my clients were ready to call security.  Now, I am having strategic, executive-level conversations with all manner of blue-chip organizations in an array of affected sectors: finance, real property, retail. The actual cannabis players are the centre of a circle. It is on everyone’s radar”.

This should not come as a shock. As one of the understatements of the year, we learned from the Final Report of the Task Force on Cannabis Legalization and Regulation, there already exists a market and appetite for cannabis.  Statistics showed that 1/3 of adults have consumed cannabis and 20 to 30% of youth will consume cannabis in their lifetime.  A study conducted by Deloitte in 2016 estimated the total market for cannabis in Canada to near $23 billion.  Another study by Deloitte in 2018 estimated the market for recreational cannabis in Canada will generate $4.34 billion in sales in 2019.  These stats are telling.

What’s coming in Ontario?

In Ontario, the Cannabis Act, 2017 (“Ontario’s Cannabis Act”) is slated to be law.  But Bill 36, the Cannabis Statute Law Amendment Act, 2018, a product of the newly appointed Progressive Conservative government in Ontario, is likely to come into effect and will make a number of significant amendments to Ontario’s Cannabis Act, including where one may sell and consume cannabis. Bill 36 is currently on its Third Reading.

Additional parameters will be put in place by municipalities, which will make by-laws, employers and managers who will enforce new rules on their employees and staff, and landlords with respect to their tenants.

Here are some of the highlights:

  1. What? On October 17, 2018, dried and fresh cannabis, cannabis oil, plants and seeds will be legal.  Edible products are expected to become legal in approximately a year.
  2. How old and how much? Ontario has set the minimum age for consumption of cannabis at 19.  Any person meeting the minimum age requirement may possess up to 30 grams (about an ounce) of dried cannabis.  Any person traveling by plane within Canada only will be permitted to carry up to the maximum amount of recreational cannabis in either her or his checked luggage or carry-on bags.
  3. Where can I buy it? In Ontario, the only place that consumers will initially be able to purchase cannabis will be online from the Ontario Cannabis Store (the “OCS”).

A major change from Bill 36 is the introduction of a regulated regime for private cannabis retail stores that would launch by April 1, 2019. While LPs will be the only legal producers of cannabis (not including home-grown cannabis in accordance with the law), private stores will require licences to sell cannabis.  According to Bill 36, the Alcohol and Gaming Commission of Ontario would be the provincial regulator authorized to grant such licences and the OCS would be the exclusive wholesaler.  Notably, there will not be a cap on the number of private cannabis retailers.

  1. Where can I use it? Whereas Ontario’s Cannabis Act put in place very strict rules on where one can consume cannabis, Bill 36 will allow for smoking or holding lighted cannabis in the same places where you can smoke or hold lighted tobacco, use an electronic cigarette, or consume a prescribed product or substance, in a prescribed manner.  These include places such as private residences and outdoor public spaces, among others. 

In general, smoking or holding lighted cannabis in enclosed workplaces is illegal and will remain illegal after October 17, 2018.  Employers may adopt further restrictions on cannabis and should review their relevant policies. For more information, see an article on the workplace issues that employers should consider here.

  1. Can I travel to the United States? Cannabis is still illegal in the U.S. federally (even though several States have legalized recreational cannabis in their respective State).  Unsurprisingly, it remains illegal to cross the Canadian/U.S. border with cannabis.  But red flags have been raised in respect of people who have used cannabis recreationally or who work in the industry.  The U.S. Customs and Border Protection helpfully released a statement in September 2018 that appears to indicate that a Canadian working in the legal cannabis industry should not be prohibited from travelling to the U.S. if the purpose of the travel is unrelated to cannabis:

A Canadian citizen working in or facilitating the proliferation of the legal marijuana industry in Canada, coming to the U.S. for reasons unrelated to the marijuana industry will generally be admissible to the U.S. however, if a traveler is found to be coming to the U.S. for reason related to the marijuana industry, they may be deemed inadmissible.

Nonetheless, you should seek advice and exercise caution before crossing the border if you use cannabis or work in the space.

The Bottom Line

With the legalization of recreational cannabis, big change is coming to Ontario and Canada more generally.  And if we learned anything from Bill 36, it is clear that there will be continual change before the cannabis industry reaches run state.  If you plan to purchase or consume cannabis, or you or your business engage with cannabis in some way, be sure to understand how these new laws will affect you and keep abreast to anticipated changes.

This Legal Update was prepared by McCarthy Tétrault LLP’s Cannabis Law Group. For more information, please contact Awanish Sinha, Matthew Kelleher, Paul Kunynetz, Jessica Firestone or Victoria Zed


[1] See also the new Industrial Hemp Regulations.