Doing Business in Canada: Cannabis Law

5 minute read
20 October 2023

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Cannabis Law

On October 17, 2018, the Canadian government passed legislation that permits the sale of cannabis for recreational adult use. Since these changes came into effect, the cannabis sector has evolved into a dynamic and rapidly changing industry, characterized by its complex nuances and the distinct regulatory frameworks established by each province and territory.

Public listings, financing, mergers and acquisitions, business development, licensing, product regulatory issues and distribution requirements present an array of challenges and opportunities as industry players navigate market demands while pursuing legal compliance.

  1. Changing market
  2. Helping you grow
  3. Making sense of regulation
  4. Our areas of expertise

Changing market

Canada is the second country in the world to legalize the sale, possession and use of recreational cannabis nation-wide, after Uruguay. Since legalization, Canada has quickly become a global leader in the industry.

The cannabis industry in Canada is large and lucrative. In a study conducted by the major accounting firm, Deloitte, the firm found that in the first three years of legalization, the industry generated over $11 billion in sales nationwide and made $29 billion in capital expenditures. During that time, the industry also contributed $43.5 billion to Canada's GDP and sustained over 98,000 jobs annually.

Subject to separate provincial restrictions, the Cannabis Act allows persons 18 years of age or older to:

  • Possess in a public place or distribute a total of 30 grams of dried cannabis or equivalent.
  • Cultivate, propagate or harvest a maximum of four cannabis plants at any one time in a dwelling-house if they are residents of said dwelling-house.

The Cannabis Act only permits sales with a license/permit, and in accordance with the terms therein. Classes of cannabis that an authorized person could sell include dried cannabis, cannabis oil, fresh cannabis, cannabis plants and cannabis plant seeds. On October 17, 2019, amendments to the Cannabis Act came into effect, adding cannabis edibles, cannabis extracts and cannabis topicals to the list of eligible classes permitted for sale.

Gowling WLG has a dedicated Cannabis group equipped to advise our clients on the myriad of questions and legal requests that continue to rise in this burgeoning industry. Our exceptional expertise empowers us to guide clients through complex market dynamics and the evolving regulatory landscape, while facilitating business expansion.

Helping you grow

Our Cannabis group has consistently been at the forefront of major industry transactions, enabling us to cultivate a profound and deep understanding of the industry.

We have extensive experience leading issuers, investment dealers and strategic investors through complex corporate finance and M&A transactions .  The results of these transactions include the listing of private cannabis companies by way of initial public offering or reverse take-over/ qualifying transactions, private and public mergers and acquisitions, and debt and equity financing transactions.

Making sense of regulation

From product liability and consumer protection issues to intricate matters involving licensing, distribution, formulation, advertising, packaging and labelling, our professionals can help you navigate the legislative and regulatory framework surrounding cannabis in Canada.

Our areas of expertise include:

  • IPOs & private placements
  • Reverse takeovers (RTOs)
  • Private & public M&A
  • Debt & equity financing transactions
  • Cannabis Act & Access to Cannabis for Medical Purposes
  • Regulations matters
  • Commercial litigation
  • Product liability & risk management
  • Consumer protection
  • Licensing & distribution
  • Packaging & labelling
  • Advertising
  • Intellectual property
  • Real estate & municipal zoning
  • Tax
  • Employment & labour issues

Learn more about Gowling WLG services in cannabis law.

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Gowling WLG professionals will be pleased to discuss resolutions to specific legal concerns you may have.

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