In December 2015, the Government of Canada announced that it would introduce legislation to legalize, strictly regulate and restrict access to cannabis for recreational purposes. When July 1, 2018 was set as the target implementation date, cannabis became one of the hottest and most polarizing topics of conversation.

This article will focus on the impending legalization of cannabis for recreational purposes, based on what we know to date. The legislative and regulatory frameworks discussed herein may change before coming into force, as they are still under review and development.

Building upon existing regulatory frameworks for medical marijuana and industrial hemp, the Minister of Justice introduced Bill C-45, "An Act respecting cannabis and to amend the Controlled Drugs and Substance Act, the Criminal Code and other Acts" (short title, the "Cannabis Act"), into the House of Commons on April 13, 2017. An amended version of the Bill was passed by the House of Commons on November 27, 2017 and it was introduced into the Senate the following day.

On March 22, 2018, the Senate referred Bill C-45 to the Standing Senate Committee on Social Affairs, Science and Technology for review and, potentially, amendment. While it is unlikely that the July 1, 2018 implementation date will be met, the Senate will conduct a final vote on Bill C-45 on June 7, 2018.

Additionally, on March 19, 2018, Health Canada released a "Summary of Comments Received During the Public Consultation" on its proposed approach to cannabis regulation. In this report, Health Canada indicated that it would not be pre-publishing the regulations for consultation. Instead, the final regulations be published in Canada Gazette, Part II as soon as possible following Royal Assent of the Cannabis Act. At this time, it does not appear that the proposed regulations will supplement the advertising provisions of the Cannabis Act, except in relation to packaging and labelling.

Cannabis Act

The Cannabis Act would allow persons 18 years of age or older to:

  • Possess in a public place or distribute a total of 30 g of dried cannabis or equivalent; and
  • Cultivate, propagate or harvest a maximum of 4 cannabis plants at any one time in a dwelling-house if resident in said dwelling-house.

The sale of cannabis would be permitted, but only with a licence/permit, and in accordance with the terms therein. Classes of cannabis that an authorized person would be permitted to sell include dried cannabis, cannabis oil, fresh cannabis, cannabis plants and cannabis plant seeds, and, on the first anniversary of the day on which the Cannabis Act comes into force, edibles containing cannabis and cannabis concentrates.

Advertising Cannabis

The Cannabis Act would prohibit the promotion of cannabis, cannabis accessories or services related to cannabis, including (but not necessarily limited to):

  • By communicating information about its price or distribution;
  • By doing so in a manner that it is reasonable to believe could be appealing to young persons;
  • By means of testimonial or endorsement;
  • By means of the depiction of a person, character or animal (real or fictional); or
  • By presenting it or any of its brand elements in a manner that associates it or the brand element with a particular way of life (e.g. one that includes glamour, recreation, excitement, vitality, risk or daring).

Activities such as broadcasting, inducements, and packaging and labelling would also be largely restricted, except as expressly authorized under the Cannabis Act.

Nevertheless, the Cannabis Act would carve out some key exemptions with respect to:

  • Informational and brand-preference promotions, as prescribed;
  • Brand element promotions on non-cannabis products, as prescribed; and
  • Point of sale promotions, which would be limited to indications of price and availability.

Although Health Canada intends to provide additional regulation with respect to packaging and labelling, it does not, at this time, intend to provide more detailed regulations or guidance on the promotion of cannabis beyond that which exists in the Cannabis Act.

We are closely monitoring the evolving legislative and regulatory landscape with respect to the legalization of cannabis for recreational purposes. We encourage you to contact us for more information about how the proposed advertising restrictions could impact your business, so you can plan ahead and make the most of opportunities in this growing industry.