Canada s green rush and the end of prohibition Sara Zborovski Michael Posnikoff Marino Sveinson
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Speakers 3 Michael Posnikoff Partner, Vancouver Norton Rose Fulbright Michael has been advising clients in the cannabis industry since the introduction of the MMPR in 2013 and acts for a wide range of clients within the industry. As part of his work with these clients, he has regularly advised on a variety of commercial matters including equity and debt financings, strategic partnerships and joint ventures (both domestic and crossborder), acquisitions and divestitures, distribution and supply agreements, licensing arrangements, structuring and corporate governance matters, shareholders disputes, retail operations, as well as with respect to regulatory matters under Controlled Drugs and Substances Act and its related regulations. Sara Zborovski Partner, Toronto Norton Rose Fulbright Sara provides regulatory and commercial counsel to companies regulated by Health Canada. Her practice is focused on assisting clients navigate the regulatory regimes implemented by the Controlled Drugs and Substances Act and Food and Drugs Act. She assists clients in the food and drug, cannabis and medical devices industries bring products to market and in all areas of compliance. She regularly counsels companies on advertising and promotion, compliance policies, licensing and good manufacturing / production practices. Ms. Zborovski also works with clients in all industries on matters relating to product safety, including crisis management and advocacy before the inspectorate and product recalls. Marino Sveinson Partner, Vancouver Norton Rose Fulbright Marino provides strategic advice and representation to employers for all aspects of workplace law in unionized and non-union environments in both the provincial and federal sectors. He represents employers on human rights matters, wrongful dismissal matters, labour relations issues, collective agreement grievances, employment contract drafting and interpretation, privacy obligations, workers compensation, corporate restructuring and acquisitions and disputes over obligations of departing employees. He also acts as an independent investigator for bullying and harassment complaints and provides training services.
Agenda Introduction Past, Present and Future of Cannabis Regulation in Canada Federal Framework for Legalization Provincial Framework for Distribution and Sale Proposed Provincial Regulations regarding Possession, Personal Cultivation and Consumption Role of Local Government Considerations for Employers 4
The history of cannabis regulation in Canada Early regulation: The legal framework for drug control in Canada was laid down in the early part of the 20 th century The federal Opium Act of 1908 prohibited the importation, manufacture and sale of opiates for nonmedical purposes The federal Opium and Drug Act of 1911 expanded the list of controlled drugs to include cocaine and morphine In 1923, Mackenzie King s Liberal government added cannabis to the list of controlled drugs 5
Controlled Drugs and Substances Act The Controlled Drugs and Substance Act (the CDSA), which is still in effect today, came into force in 1997 Cannabis is a controlled substance under the CDSA As of 1999, it was only possible for individuals in Canada to possess cannabis for medical purposes by way of a s.56 CDSA exemption In its 2001 decision in R v. Parker, the Ontario Court of Appeal declared the prohibition on the possession of cannabis in the CDSA to be unconstitutional to the extent that it forced an individual who used cannabis for medical purposes to choose between their health and imprisonment 6
Marihuana Medical Access Regulations (MMAR) In response to the Parker decision, the federal government enacted the Marihuana Medical Access Regulations (MMAR) The MMAR permitted individuals who had the support of a medical practitioner to obtain an Authorization to Possess (ATP) cannabis for medical purposes from Health Canada 7
MMAR (cont d) Under the MMAR, ATP licence holders could obtain lawful access to cannabis in one of three ways There was significant growth in ATPs and the licenses issued under the MMAR between 2002 and the end of 2013 This growth caused the MMAR program to become an administrative and financial burden for the federal government and resulted in a number of negative impacts on public health, safety and security In an attempt to address these issues, the federal government enacted the Marihuana for Medical Purposes Regulations (the MMPR) in June 2013 and, at the same time, announced its intention to repeal the MMAR in March of 2014 8
Marihuana for Medical Purposes (MMPR) regulations The intent of the MMPR regime was to Treat marihuana as much as possible like any other medication Create a new supply and distribution system using fully regulated, inspected and audited licensed producers (LPs) Phase out personal and designated production and institute mechanisms for compliance and enforcement 9
MMPR (cont d) In 2014, a number of cannabis users challenged the constitutionality of the MMPR In its 2014 decision in Allard v. Canada, the Federal Court authorized specified cannabis users to continue producing medical cannabis in their homes pursuant to MMAR licences pending the Court s final decision on the constitutionality of the MMPR In its 2016 decision in Allard v. Canada, the Federal Court declared the entire MMPR to be unconstitutional The federal government enacted the Access to Cannabis for Medical Purposes Regulations (ACMPR) in response to the Allard decisions and these regulations remain in force today 10
Federal framework: Overview of discussion Background Current federal regulation of cannabis The proposed Cannabis Act Division of responsibilities: - Federal: licensing and authorizations; packaging and labelling; promotion; new product forms - Provinces and territories: retail and distribution; use within the province or territory (age, location) Health Canada s proposed approach Licensing and authorizations Packaging and labelling Promotion New product forms 11
Current federal regulation of cannabis Controlled Drugs and Substances Act Narcotic Control Regulations (NCR) Access to Cannabis for Medical Purposes Regulations (ACMPR) Food and Drugs Act Food and drug regulations Natural health products regulations Medical devices regulations Industrial hemp regulations 12
The proposed Cannabis Act Licensing and authorizations Packaging and labelling Promotion New product forms Retail Distribution Use within the province or territory: age, location 13
Proposed licenses Health Canada s proposal: Licences Cultivation: Industrial hemp nursery Produce seeds, plants, fresh dried, including industrial hemp No packaging or labelling Intra-industry sale Standard, micro Processing Manufacture cannabis oil, intermediary products (resin), synthesize, other authorized products Packaging, labelling for sale to the public Intra-industry sale Standard, micro Sale Medical Non-medical 14
Proposed authorizations Health Canada s proposal: Authorizations Analytical testing Possession by independent, third-party labs for verification of regulatory compliance Import or export Medical or scientific purposes In respect of industrial hemp Research Research and development by persons not otherwise licensed or authorized 15
License requirements Physical security Personnel security Good production practices Notice to local authorities License Record keeping and reporting 16
Health Canada s proposal: Packaging Plain packaging: - One brand element (+ brand name) - Restrictions on use of colours, imagery Packaging Immediate container: - Tamper-evident - Child-resistant - Prevents contamination - Keeps cannabis dry - Opaque or translucent 17
Health Canada s proposal: Labelling Labelling Standardized symbol Mandatory health warning message Information on tetrahydrocannabinol (THC) and cannabidiol (CBD) content 18
The promotion of cannabis Reference to price or distribution Appealing to young persons Use of testimonials, endorsements, depictions of real or fictional characters Lifestyle advertising False or misleading Informational promotion Brand preference promotion Licence-holder to licence-holder communications But not: Locations where young persons are permitted Sponsorships Foreign media 19
New product forms Vaporizers Creams Patches Cosmetics Drugs Food and beverages (edibles) 20
Provincial framework Overview of discussion Background Current Provincial regulation of cannabis The Proposed Cannabis Distribution Act Establishes Province s exclusive jurisdiction over wholesale distribution Provides authority for public retail sales The Proposed Cannabis Control and Licensing Act Establishes Provincial control over sale, supply and possession of non-medical cannabis Establishes licensing regime for private cannabis retailers Restrictions on possession, personal cultivation and consumption of cannabis by adults and prohibitions for minors 21
Bill 31: Cannabis Distribution Act Province proposes to adopt similar model to liquor distribution where Liquor Distribution Branch will: be the exclusive wholesale distributor of non-medical cannabis and cannabis accessories in BC establish and operate warehouses and the provincial retail stores as well as establish and administer the system for online sales Cannabis products must only be acquired from federally licensed producers 22
Bill C-30: Cannabis Control and Licensing Act (CCLA) Proposed Act is guided by the Province s priorities of: Protecting children and youth Promoting health and safety Keeping the criminal element out of the cannabis trade Keeping roads and waterways within the Province safe Supporting economic development 23
Summary of key terms of CCLA: Sets minimum age for purchase and consumption Sets allowable possession limits for adults Sets personal cultivation limits Provides restrictions on places where cannabis may be consumed Provide enforcement authority to deal with illegal sales Create a number of Provincial cannabis offences Power for strata councils and landlords to forbid cultivation inside condos and apartments 24
Summary of Key Terms of CCLA: Establishes cannabis retail licensing regime similar to current licensing regime for liquor No co-location with other products including tobacco and alcohol All cannabis products must be purchased from the LDB No visibility of products from street No minors permitted in retail locations Restrictions on vertical integration No consumption or vape lounges permitted 25
BC non-medical cannabis distribution model Federally Licensed Producer BC Liquor Distribution Branch (Warehouse) Government-run Retail Sales Locations Government-run Online Sales Platform 26
Amendments to Motor Vehicle Act Along with the introduction of the two new bills, the Motor Vehicle Act will be amended to address drug-impaired driving: Ban on new drivers from having any THC in their system New 90-day administrative driving penalty for those affected by drugs while driving based on analysis of bodily substance or an evaluation by a specifically trained drug recognition expert Issues with evaluation/ testing 27
Role of local government in production, distribution and sale Cannabis Act does not expressly restrict local government authority to prohibit or regulate non-medical cannabis activities Under the CCLA it is a pre-condition of a retail sales license that the applicant have approval from local government for the intended use and location Local governments may therefore: Prohibit or regulate non-medical cannabis activities via zoning bylaws Regulate non-medical cannabis businesses via licensing bylaws Regulate construction of buildings and structures for non-medical cannabis activities via building bylaws Regulate property safety issues arising from non-medical cannabis activities via property safety bylaws 28
Marijuana in the workplace 1 IMPAIRMENT VS. SAFE PERFORMANCE OF WORK 2 RECREATIONAL USE 3 AUTHORIZED USE FOR MEDICAL PURPOSES 4 ACCOMMODATION OF MEDICALLY AUTHORIZED USE 5 IMPLEMENT / UPDATE POLICIES & TRAINING 29
Marijuana in the workplace 1. IMPAIRMENT VS. SAFE & PROPER PERFORMANCE OF WORK 30
Impairment vs. Safe & Proper Performance of Work Occupational Health & Safety Regulation 4.20 Impairment by alcohol, drug or other substance (1) A person must not enter or remain at any workplace while the person's ability to work is affected by alcohol, a drug or other substance so as to endanger the person or anyone else. 31
Impairment vs. Safe & Proper Performance of Work What does impairment mean? Focus on safe & proper performance of work 32
Marijuana in the workplace 2. RECREATIONAL USE 33
Recreational Use of Cannabis Employer s property and workplace Legally controlled & impairing substance like alcohol Employer s discretion to restrict possession and use at work and employer-held functions Can prohibit attendance at work if safe or proper performance is adversely impacted 34
Marijuana in the workplace 3. AUTHORIZED USE FOR MEDICAL PURPOSES 35
Medically authorized cannabis No such thing as prescription cannabis Use can only be authorized by a physician pursuant to the Access to Cannabis for Medical Purposes Regulations Medical document must comply with the requirements set out in s. 8 of the ACMPR Incl. daily quantity of dried marijuana (grams) and the period of use (one year maximum) 36
Marijuana in the workplace 4. ACCOMMODATION 37
Accommodation Ask for: Verify the authorization Nature of disability/diagnosis? Is cannabis a recognized treatment? Is the employee following the recognized treatment? Potency? Potential impacts on job performance? Alternatives? 38
Marijuana in the workplace 5. IMPLEMENT AND UPDATE POLICIES & TRAINING 39
Policies Key considerations Broaden meaning of impairment to include safe and proper performance is adversely impacted Distinguish prescription drugs from medically authorized cannabis Develop policy about self-reporting and support for treatment (Elk Valley) 40
Policies Key considerations (cont d) Require cooperation to obtain medical info from physicians Legalization does not change law of testing (Suncor) Train managers to detect signs of potential impairment 41
Five things to consider 1 IMPAIRMENT VS. SAFE & PROPER PERFORMANCE OF WORK 2 RECREATIONAL USE 3 AUTHORIZED USE FOR MEDICAL PURPOSES 4 ACCOMMODATION OF MEDICAL AUTHORIZED USE 5 IMPLEMENT / UPDATE POLICIES & TRAINING 42
Questions & answers 43
Contact Sara Zborovski Partner, Norton Rose Fulbright Sara.zborovski@nortonrosefulbright.com Michael Posnikoff Partner, Norton Rose Fulbright Michael.posnikoff@nortonrosefulbright.com Marino Sveinson Partner, Norton Rose Fulbright Marino.sveinson@nortonrosefulbright.com 44