Canada’s Sticky Situation: The Evolving Regulations of Canada’s Cannabis Industry

With the legalization of cannabis happening in Canada sometime this summer, marijuana is all the buzz. As part of the Canadian Cannabis Chamber (a cannabis business association), my office receives many inquiries from people interested in producing or retailing cannabis in Alberta.

While the change to legalize cannabis is a federal issue, the regulation of cannabis – like alcohol – falls into provincial jurisdiction. Thus far, we have seen widely different approaches toward provincial cannabis legislation in different areas of the country.

Ontario, for example, has chosen the “state-run” approach, much similar to the “LCBO” model of government-run stores in that province. Back home in Alberta, however, the province has taken a much different approach: while online sales will be run by the government, the province has opted for privately-run dispensaries, which, much like private liquor stores, will enable private businesses to get involved in retailing cannabis.

Some of the regulations include:

  1. Age. Just like with alcohol, no one under 18 can consume or possess cannabis.
  2. AGLC Oversight. Retailing of cannabis will be overseen by the Alberta Gaming and Liquor Commission (AGLC), much the same as is the case with alcohol.
  3. No Co-location. Cannabis cannot be sold where liquor is sold.
  4. Mandatory background checks. No one with links to organized crime, the illegal drug trade, or with convictions relating to the same will be allowed to operate or work at a dispensary.
  5. License renewal. Every dispensary will have to have its license renewed every two years.
  6. Market limitation. No business or corporation will be allowed to own more than 15% of the cannabis dispensary licenses in the province.
  7. Hours of operation. Stores are allowed to be open from 10 AM to 2 AM (the same as liquor stores).
  8. Security requirements. Provincial legislation has strict security requirements that are too detailed to address in this blog. Give us a call for further details.
  9. Possession. Individuals will be allowed to possess up to 30 grams of cannabis in a public place.
  10. Youth restrictions. Persons under the age of 18 who possess more than 5 grams of cannabis will continue to face a charge under federal legislation.
  11. Drug-impaired driving. This is one issue that is still being addressed (albeit too slowly, in our opinion). While driving while impaired is prohibited by federal legislation, there is no approved testing device that determines whether a person is impaired by cannabis or other drugs (as opposed to a roadside breath screening device for alcohol impairment). Other countries utilize a saliva-testing device that tests for cannabis and other drugs and we are of the opinion that the federal government needs to act on this sooner than later as this potentially puts the safety of all of those on the road at risk.

Our office has assisted several potential dispensaries with the application process – a process which, admittedly, is complex and requires a significant amount of information. (The application is similar to a casino license and is 67 pages long!) Due to this complexity, we recommend that a professional review your application before its submitted.

It is also noteworthy that AGLC is very sticky with the naming of cannabis dispensaries. Several of our clients have experienced challenges landing on a name that was both available in the corporate registry and deemed to be acceptable by AGLC. AGLC will not approve any name of a dispensary that is seen to be “promoting” cannabis usage and this is applied rather liberally (for example, no name with 420 is even acceptable). Give us a call for further details.

In addition to the regulations around dispensaries, provincial legislation also restricts where cannabis can be consumed. (For example, cannabis cannot be consumed on a playground, at a sports park, or at an outdoor theatre.) In addition to these restrictions, the City of Calgary has recently passed a bylaw that further restricts cannabis, for example, prohibiting a dispensary within 150 meters of a school. In addition, cannabis consumers will be prohibited from lighting up in public, and instead be confined to using in private dwellings.

Legalized cannabis presents challenges but many opportunities, not the least of which is the potential to defeat the black market. But as with alcohol, regulations around production, distribution, and consumption are complex. If you are interested in applying to produce or dispense cannabis, it’s a complex process but we’re prepared to assist you. Give our office a call at (403) 457-7778.

Jonathan Denis