Original Newsletter(s) this article was published in: Blaneys on Business: January 2019
Co-Author: Alex Fernet Brochu, Articling Student
Contributions by: Angela Smith, PhD, Catalyst Life Science Consulting
On October 17, 2018, Canada became the second country in the world, and the first G7 nation, to legalize recreational cannabis.1 The Cannabis Act2 and Regulations create a strict legal and regulatory framework for controlling the production, distribution, sale and possession of cannabis across Canada. Under the newly in force Cannabis Act, provinces and territories are responsible for determining how cannabis is distributed and sold within their jurisdictions. This means that each province and territory has been tasked to create its own set of rules governing the "how, where and when" of their individual cannabis distribution and retail system(s).3 Since the Liberals officially announced on April 20, 2016 that the government would move forward in legalizing cannabis,4 the provinces and territories have been working toward this goal for varying amounts of time. Post-legalization, each province and territory is at a different level of preparation and readiness.
To date, all provinces and territories appear to have delegated the regulating, licensing and distribution of cannabis to their existing alcohol and gaming authorities. There are predominantly three distinct distribution/retail models emerging: 1) Government-Run model, 2) Request-for-Proposals (RFP) model, and 3) Free Market model. Many provinces and territories have elected to have the aforementioned alcohol and gaming government agency be the sole authorized cannabis distributor and retailer for the province (Government-Run model). Others opted to send out RFPs ahead of legalization and to select a finite number of applicants as licensed private retailers (Request-for-Proposals model). Finally, select provinces opted for a licensing process where applications are submitted, reviewed and approved, with licences being granted on an ongoing basis (Free Market model).
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Footnotes
1 What you need to know about cannabis, Government of Canada: https://www.canada.ca/en/services/health/campaigns/cannabis/canadians.html; Canada becomes second nation in the world to legalize marijuana, CNN: https://www.cnn.com/2018/06/20/health/canada-legalizes-marijuana/index.html.
2 Cannabis Act, S.C. 2018, c. 16.
3 Cannabis in the provinces and territories, Government of Canada: https://www.canada.ca/en/health-canada/services/drugs-medication/cannabis/laws-regulations/provinces-territories.html.
4 Canada to introduce pot legalization legislation in 2017, Global News: https://globalnews.ca/news/2650706/canada-to-introduce-pot-legalization-legislation-in-2017/; Liberals' choice of 4/20 for recreational marijuana update demonstrates commitment, Financial Post: https://business.financialpost.com/midas-letter/liberals-choice-of-420-for-recreational-marijuana-update-demonstrates-commitment.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be ought about your specific circumstances.
