Canadian Law Group

Canada Legalizes Marijuana

CannabisCanada officially legalized marijuana on October 17, 2018, when the Cannabis Act took effect. Prime Minister Justin Trudeau fulfilled one of his campaign promises with the passing of this Act, which was largely met with national support. Canada is now the second country in the world, after Uruguay, to legalize recreational cannabis use.

After about a century of Prohibition, adults (18 years of age or older) now can legally possess, carry and share (with other adults) up to 30 grams of legal cannabis (dried or specified equivalents) in public. Cannabis oil is also legal. However, Canada omitted high-concentrated products and edibles from its legislation, which will not be legal nor sold in dispensaries for about a year. A maximum of four homegrown cannabis plants per household is permitted by most Canadian provinces. Lastly, supplying cannabis to minors is a federal crime punishable with up to 14 years in prison.

What does this news mean for you and your business? It may be time to invest and expand in Canada. Derek Paterson, CEO of Terra Tech, warns that if nothing changes on the US side regarding federal cannabis legalization by 2019, “..almost all of us will be takeout targets for Canadian players.” With the cannabis industry in Canada projected to reach $5 billion USD by 2020, many licensed cannabis growers want to get their foot in the door. Additionally, Deloitte has estimated that cannabis edibles will account for 60% of Canada’s cannabis market, creating an excellent opportunity for those looking to invest early.

Other intriguing opportunities include collaborations between the cannabis industry and the drinks sector. Bloomberg TV announced that giant UK spirits maker, Diageo Plc, is discussing cannabis-infused beverages with three major cannabis producers in Canada.

Although cannabis will be legalized across Canada, since each province will control the distribution of cannabis internally, this has given rise to different provincial/domestic laws. Each province has decided on a private, public or private-public model for cannabis distribution.

The province of Ontario, just north of the NY border, is expected to account for 40% of Canada’s legalized cannabis market. It should be noted that cannabis retail stores in Ontario have been delayed until 2019 because newly elected Premier Doug Ford decided to switch to a private model (cannabis is only available online for the time being). British Columbia only has one government retail store in Kamloops, British Columbia, thus many purchasers will be buying online as well.

Smoking cannabis at work will, of course, remain illegal with the implications of outside use largely depending on your vocation (ex. airline pilots, police officers, the Canadian Armed Forces (CAF) have stricter standards.) Cannabis use will also be regulated with regard to driving while intoxicated, as Canada has an altogether stricter regime, and more heavy-handed punishments, than most US States. For example, a DWI in New Jersey is considered a traffic violation, punishable typically with a fine, brief license suspension and reinstatement following the completion of an educational driving course. In Canada, a DWI as of December 18, 2018 will be punishable with a maximum of 10 years imprisonment. Roadside sobriety tests will be administered to test for marijuana, as well as saliva and ultimately blood tests.

With regard to border crossings, it remains 100% illegal to cross international borders (including US-Canada) with cannabis. The US Customs and Border Protection (CBP) Agency issued a statement on October 9, 2018 that determinations of inadmissibility would remain business as per usual.

The Canadian government has also announced new legislation allowing Canadians convicted of nominal amounts of cannabis possession to receive a pardon. However, critics’ claim the plan does not go far enough, as the expedited pardons offered by the Federal government, called record suspensions in Canada, do not permanently ‘erase’ a conviction. There is no expungement of an individual’s criminal record – a record suspension only seals the criminal record and removes domestic disentitlements. Ultimately, Canadians convicted of simple possession prior to the legalization of cannabis may still remain permanently barred from the United States.

To discuss business opportunities in the new thriving Canadian cannabis market, please contact us.