Commercialization of Cannabis in Québec, the provincial government reacts

2017-11-22

CommercializationofCannabisinQuébec
theprovincialgovernmentreacts

JasonMoscovici*andLilianaKorosi†
ROBIC,LLP
Lawyers,PatentandTrademarkAgents

Bill157ontheActtoconstitutetheSociétéquébécoiseducannabis,toenactthe
CannabisRegulationActandtoamendvarioushighwaysafety-relatedprovisions(the
“Act”)hasbeenrecentlytabled.Theregulation(s)madebytheprovincialgovernment,
undertheAct,woulddetailthetermsandconditionsofitsapplication(the”Regulations”).

Wehavesummarizedbelowthemaintopicsoftheprovisionsthatareofinterestespecially
tothosewhoarealreadypreparingforthefutureapplicationoftheCannabisRegulation
Act.

Distinction
ExceptforChapterIV(whichcontainsrestrictionsontheuseofcannabisincertain
places),theCannabisRegulationActdoesnotapplytotheproductionandpossessionof
cannabisauthorizedformedicalpurposesunderthefederallaw.Inaddition,unlikeunder
thefederalproposedrecreationalcannabislegislation,theCannabisRegulationAct
prohibitsthecultivationofcannabisforpersonaluse,intheirowndwelling-house.

Monopoly
ThenewSociétéquébécoiseducannabis(SQC),asubsidiaryoftheSociétédesalcools
duQuébec(SAQ),willbetheonlyoneauthorizedtosellinQuébec,atthepriceitwill
establish,cannabisproducedforcommercialpurposesbyalicensedcannabisproducer
undertheRegulations(the”AuthorizedProducer”).TheSQCwould,amongotherthings,
(i)purchasecannabisfromtheAuthorizedProducer,(ii)operatecannabisretailoutlets,
(iii)sellcannabisovertheInternet,and(iv)authorizeapersontoengage,onSQC’sbehalf,
©CIPS,2017.*JasonMoscoviciisalawyerandbiochemistforROBIC,LLP,afirmoflawyers,patentandtrademarkagents.†LilianaKorosiisalawyerforROBIC,LLP,afirmoflawyers,patentandtrademarkagents.

ROBIC,LLPMONTREALQUEBECLAWYERS,PATENTAGENTSANDTRADEMARKAGENTS1001VictoriaSquare,BlocE–8thfloor2875LaurierBoulevard,Delta-3–Suite700Montreal(Quebec)CanadaH2Z2B7Quebec(Quebec)CanadaG1V2M2ROBIC.COMTel:514987-6242Tel:418653-1888INFO@ROBIC.COM

inthetransportation,includingthedelivery,andstorageofthecannabisthatSQCsells,
allasitmaybefurtherdetailedintheRegulations.
UnlessitisshippingitoutsideQuébec,anAuthorizedProducermayonlysellcannabisin
QuébectotheSQC,anditwouldhavetheobligation,undertheRegulations,toprovide
reportsthereontotheMinister.However,theprovincialgovernmentmay,byRegulation,
provideforothercaseswhereanAuthorizedProducermaysellcannabistoapersonother
thantheSQC,aswellastheconditionsapplicabletosuchsale.
Inspection,investigationandseizureproceduresarealsoincluded.Itshouldbenotedthat
adirectororofficerofalegalpersonwouldbepresumeddirectlyresponsibleforany
offenceundertheCannabisRegulationActortheRegulationscommittedbythelegal
person,itsrepresentative,mandataryorpersonnelmember,unlessitisestablishedthat
theyexercisedduediligencebytakingthenecessaryprecautionstopreventtheoffence.

Restrictions
Restrictionsonthepromotion,advertisingandpackagingofcannabisforcommercial
purposesincludetheprohibitionof(i)freeofchargesupplyanddistributionofcannabisto
consumersorfurnishthemcannabisforpromotionalpurposes,(ii)discountsoncannabis
products,(iii)offeringgiftsorrebatestoconsumers,ortheopportunitytoparticipateina
lottery,acontestoragame,oranyotherformofprofitonthepurchase,orobligationto
provideinformationaboutcannabisoritsconsumption,(iv)anysponsorshipassociated
withthepromotionofcannabis,acannabisbrand,theSQCoranAuthorizedProducer,
(v)anyassociationofasports,culturalorsocialfacilityoreventtoaname,logo,distinctive
sign,designorimage,orsloganrelatedtocannabis,acannabisbrand,theSQCoran
AuthorizedProducer,(vi)alldirectorindirectadvertisingwhichisnotinprinted
newspapersormagazinesthathaveanadultreadershipofnotlessthan85%,oritisnot
asignagevisibleonlyfromtheinsideofacannabisretailoutlet.

Offenses
Fairlyimportantfines(from$5,000to$500,000)areapplicableforoffencesunderthe
CannabisRegulationAct,whichwouldbedoubledintheeventofasubsequentoffense.

Bywayofconclusion
WewillknowsoonenoughwhetherBill157willundergosubstantiveschanges;more
likely,theRegulationswillspecificallydetailthevariousaspectsoftherecreational
cannabistradeinQuébec.Onethingiscertain,ROBICTeamwillkeepyouinformedofall
developments.