Article by Jeffrey Lizotte, Lift News
Ontario’s response to the Cannabis Act is actually four pieces of legislation from four different ministries smashed together. The formal title reflects that: An Act to enact the Cannabis Act, 2017, the Ontario Cannabis Retail Corporation Act, 2017 and the Smoke-Free Ontario Act, 2017, to repeal two Acts and to make amendments to the Highway Traffic Act respecting alcohol, drugs and other matters. Try to hashtag that.
It proposes to govern “the sale, distribution, purchase, cultivation, possession and consumption of cannabis” for 13 million Ontarians by July 2018. Though it’s relatively short, it has intentionally wide-ranging implications. In four Schedules it enacts two new Acts (on prohibition and retail), repeals and replaces one (on consumption), amends another (on driving), and affects 10 Acts in total.
Bill 174 was introduced for First Reading on Wednesday (and Second Reading on Thursday), to much less media coverage than the Ontario government’s retail policy announcement did in September. The legislation largely sticks to delivering an Ontario Crown Corporation to be the sole retailer of recreational cannabis (and the inevitable global example for government retail policy within a regulated legal cannabis regime). Mainstream accounts of Bill 174 focussed on the age of majority (19) and the tools needed to fight black market storefront dispensaries (a hot political issue).
We believe the most impactful parts of Bill 174 will be the finer details—the interpretations that give rise to opportunities. Knowing the rules better than your competitors affords you a distinct strategic advantage, and we’ve highlighted just a few such details here that we believe will have an impact.
Part I: Cannabis Act, 2017
Minister Responsible = Attorney General
The order of restitution implications could be interesting. The OCA affords police broad powers to seize cannabis, even just on reasonable suspicion of an infraction. But it also sets out a pretty thorough process through the Ontario Court of Justice that can require the return of seized products up to three months after seizure (police stations might need to upgrade some Level 9 vault space, for consistency).
The worst kept secret in the ACMPR, the inevitable approval of a pharmacy distribution channel for medical cannabis, gains more steam with a minor change to the Drug and Pharmacies Regulation Act. The wording might seem innocuous – the Act would not “prevent(s) the sale or distribution of cannabis… for medical purposes,” but every line of a bill was put there with intention.
Part II: Ontario Cannabis Retail Corporation Act, 2017
Minister Responsible = Minister of Finance
The Ontario Cannabis Retail Corporation is created as a subsidiary of the LCBO. That we knew. But 174 makes it very clear that while the OCRC subsidiary won’t use the LCBO’s brand or physical locations, it will be designed and operated in the LCBO’s image leveraging their “expertise and existing back-office infrastructure.” That would reason to include acknowledging the unique LCBO mandate that uses policies like social reference pricing as a guiding principle to limit consumption.
Governments across Canada have maintained that legal cannabis won’t be a cash cow. The Ontario government proposes a financial structure set out in the Ontario Cannabis Retail Corporation Act to ensure this. A loose mandate to pay net profits to the Consolidated Revenue Fund “at such times and in such manner as the Lieutenant Governor in Council may direct” means that the social mandate of government retail is the main priority. For comparison’s sake, the LCBO is required to kick just 20% of net revenue to the fund annually.
Part III: Smoke-Free Ontario Act, 2017
Minister Responsible = Minister of Health
The Smoke-Free Ontario Act, 2017 will repeal the previous version and replace it with one that takes a hard line on vaporizers and electronic cigarettes. The good news is that it makes clear that the government understands cannabis vaporizers will soon be (regulated by the Feds and) commonplace. The bad news is that this legislation seeks to govern cannabis vaporizers as strictly as cigarettes. As it stands, the bill says you won’t be able display or even let a consumer handle a vaporizer before purchase.