New Provincial Cannabis Regulatory Regime

The Government of Newfoundland and Labrador Responds to the Legalization of Cannabis

On November 23rd, 2017, the Government of Newfoundland and Labrador (the “Government”) released its proposed regulatory framework to deal with the Government of Canada’s legalization of cannabis for recreational purposes. In April, 2017, Federal Justice Minister Jody Wilson-Raybould introduced the Cannabis Act which proposes to legalize the possession and retail sale of recreational cannabis in Canada. However, the Government of Canada has left it up to individual provinces to decide how to regulate the distribution and sale of cannabis.

Liquor Corporation Act Amendments. Amendments to the Liquor Corporation Act (the “Act”) were introduced into the House of Assembly for the Province of Newfoundland and Labrador on November 22, 2017 (the “Proposed Amendments”). The Proposed Amendments will give the Newfoundland and Labrador Liquor Corporation (“NLC”) the authority to:

• • buy, import and sell cannabis;
• • control the possession, sale and delivery of cannabis;
• • establish, maintain and operate cannabis stores; and
• • issue licenses for the possession, sale and delivery of cannabis.

Licenses for the possession, sale or delivery of cannabis. In its current form, the Act contains provisions for NLC to grant to a brewer, winery or distillery a license permitting the sale of alcoholic liquor produced by the licensee to the NLC. However, the Proposed Amendments will authorize NLC to grant to a person or corporate entity a license to possess, sell or deliver cannabis. Consequently, the Government of Newfoundland and Labrador proposes to leave the authority and discretion for licensing retail dispensaries to the NLC.

However, the Proposed Amendments contemplate that NLC has discretion not to grant a license to an individual or corporate applicant where NLC finds:

• • the applicant is not a “fit and proper person to keep and operate a premises where cannabis will be sold”;
• • the past conduct of the applicant establishes reasonable grounds for the belief that the applicant will not carry on business in accordance with the law and with integrity and honesty;
• • the granting of the license would not be in the public interest having regard to the needs and wishes of the public in the community in which the premises will be located; or
• • Where the applicant or the corporation has been convicted within the 5 years preceding the application of a violation of the Excise Tax Act or the Customs Act with respect to offences relating to liquor or cannabis; the Controlled Drugs and Substances Act with respect to trafficking; the Food and Drugs Act; or the Criminal Code for an offence punishable by imprisonment of one year or more.

NLC authority to set price of cannabis. NLC will have authority to fix the prices at which cannabis is to be sold. The Minister of Finance has indicated that the NLC will look to the illegal cannabis market to determine the price of cannabis in order to ensure that its prices are competitive. Further details will have to be worked out on this front.

Online Sales. While not addressed in the Proposed Amendments, the Government has indicated that the NLC will be tasked with establishing an online portal for the sale of cannabis. Licenses to private retailers for online sales of cannabis may come at a later date.

Minimum Age. The legal age to buy and consume cannabis will be 19 years of age, the age of majority in the Province pursuant to the Age of Majority Act. The Province has stated that youth possession will be prohibited and will result in a fine rather than a criminal charge.

Industry. The Government has indicated that it is committed to developing an industry around the production and sale of cannabis. Once the Proposed Amendments are enacted and in force, the Government has indicated that a Request for Proposals from private retailers will be issued to establish suppliers for cannabis products.

What’s Next?. More legislative changes will be introduced into the House of Assembly in the Spring of 2018. The Government has indicated that it is developing a public education and awareness campaign to be rolled out in conjunction with legalization, so that the public is aware of the new laws. The Government is also working with its Federal counterparts to address the issue of driving while under the influence of cannabis. The Province is pressing the Federal Government for more resources so that the RCMP and RNC have the tools and training they require in order to enforce the law. There are likely to be changes to the Highway Traffic Act forthcoming. Details on taxation are also left to be worked out.

The comments contained in this eCaseNote provide general information only and should not be construed as legal advice or opinion. For more information or specific advice on matters of interest, please call our offices at (709) 579-2081.