On Tuesday, June 19, 2018, Canada’s Senate passed a historic bill — Bill C-45 — making Canada the second country in the world and the first G7 nation to legalize and federally regulate commercial production and sale of cannabis outside of medical use. An adult-use market for cannabis will operate alongside Canada’s medical and industrial hemp markets. All three markets will be primarily regulated under the Cannabis Act. Two key aspects of the Cannabis Act are the provincial regulation of adult-use cannabis storefronts, and in late 2019, increased diversity in saleable classes of cannabis.

Industry participants can also expect greater clarity around advertising, promotional and informational materials than in the current medical market. The current patchwork of the Food and Drugs Act and the Narcotic Control Regulations were drafted without consideration of a medical market regulated under the Access to Cannabis for Medical Purposes Regulations. Regulations specific to cannabis will reduce uncertainty around compliant public communications in the medical market and will define compliance in the adult-use market.

The Cannabis Act will also lower the barrier to entry for entities interested in participating in the industry and provide for more specialized licences. Licences specific to cultivation, and to downstream activities such as packaging dried cannabis, extraction of cannabis resin, formulation and encapsulation of cannabis oil, and experimentation with classes of cannabis that are not yet regulated for sale will be more accessible. Licences restricted to research and development are also expected to be an option, which will simplify education that includes handling and learning about cannabis plants or products.

Canada’s stepwise regulation will see new classes of cannabis regulated by late 2019: concentrates and edibles. New classes of cannabis and new dosage forms within those classes will play significant roles in the future of both the adult-use and medical markets, and to a great extent, will define the public face of those markets. Unexpected regulatory challenges and opportunities are sure to follow as the industry expands in size and in the ways to participate. Canada’s global leadership in this social policy experiment and newly-regulated industry demands that we regulate responsibly — the world is watching.

This historical bill is expected to come into force on October 17, 2018.

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BLG is committed to playing an active role in helping domestic and foreign clients effectively and responsibly navigate the Canadian cannabis industry. BLG is at the forefront of Canadian law firms acting as counsel on corporate transactions, and providing ongoing legal advice and intellectual property agency services to a wide variety of industry participants.

To find out how BLG’s Cannabis Industry Focus Group can assist you, please contact one of the authors listed below.

Authors

Andrew Powers 
APowers@blg.com
416.367.6135

Katherine J. Menear 
KMenear@blg.com
416.367.6210

David Wood PhD
DWood@blg.com
403.232.9742

Expertise

Cannabis