Legalization of Cannabis in Canada

Executive Summary

In the fall of 2018, Canada became the second country in the world, after Uruguay, to legalize the production, distribution, sale, and possession of recreational cannabis – making it the first G20 nation to do so. This paper summarizes the key issues and stakeholders involved in developing cannabis legalization in Canada, giving readers a broad and foundational understanding while also laying out critical topics for further analysis and discussion.

Key Legislation

Federal

The key pieces of federal legislation dealing with the legalization of cannabis are the Cannabis Act, and An Act to amend the Criminal Code. 

The Cannabis Act creates a strict legal framework for controlling the production, distribution, sale, and possession of cannabis across Canada.[1] The Act aims to accomplish three goals:

• keep cannabis out of the hands of youth
• keep profits out of the pockets of criminals
• protect public health and safety by allowing adults access to legal cannabis

An Act to amend the Criminal Code (formerly Bill C-46) governs issues related to drug-impaired driving.[2]

The chart below details the legislative history of the federal bill:

Provincial/Territorial

Provinces and territories are responsible for determining how cannabis is distributed and sold within their jurisdictions.[4]

They set rules around:

• how cannabis can be sold
• where stores may be located
• how stores must be operated
• who can sell cannabis

They also have the flexibility to set added restrictions, including:

• lowering possession limits
• increasing the minimum age
• restricting where cannabis may be used in public
• setting added requirements on personal cultivation

Municipal

There are a vast array of municipal by-laws that govern activities such as  smoking or vaporizing recreational cannabis in certain public areas of a city or the issuing of  cannabis-related business licenses.[5]

Current Status

The framework of cannabis regulation in Canada incorporates a hybrid model that includes both federal and provincial oversight. While the federal Cannabis Act lays out the baseline restrictions for cannabis production, possession, distribution and sale, provinces and territories have the authority to regulate how cannabis is distributed and sold within their respective jurisdictions.[6] Additionally, each province and territory may establish additional restrictions, including limits on possession, personal cultivation, public use, and increasing the minimum age of use.

Key Regulations

This section details some of the key regulations for the most common activities associated with cannabis use, providing a simple guide for residents to know what is permissible under the new laws.[7] Subject to provincial or territorial restrictions, adults who are 18 years of age or older are legally able to:

• possess up to 30 grams of legal cannabis, dried or equivalent in non-dried form in public
• share up to 30 grams of legal cannabis with other adults
• buy dried or fresh cannabis and cannabis oil from a provincially licensed retailer
• in provinces and territories without a regulated retail framework, individuals can purchase cannabis online from federally licensed producers
• grow, from licensed seed or seedlings, up to four cannabis plants per residence for personal use
• make cannabis products, such as food and drinks, at home if organic solvents are not used to create concentrated products

Cannabis edible products and concentrates became legal for sale on October 17, 2019.[8]

At a Glance: Key Offences and Punishments

Key Stakeholders/Viewpoints

As expected, the issue of cannabis legalization generated a broad spectrum of viewpoints from many interested stakeholders, including governments, various health and safety advocacy groups, and business organizations. To receive public input, the federal government established a Task Force to advise on how to proceed with marijuana legalization. The Task Force engaged with provincial, territorial, and municipal governments, experts, patients, advocates, youth, Indigenous governments and representative organizations, employers, and industry.

Below is a summary of key groups and their reactions to the process:

Societal and Economic Impacts

A significant issue underlying the legalization of cannabis was its effect on young people and citizens from Indigenous and racialized communities throughout the country.

Youth 

The Cannabis Act has two of its stated purposes to “protect the health of young persons by restricting their access to cannabis” and to “protect young persons and others from inducements to use cannabis.”[12] To address these goals, the Act states that it is an offence to sell cannabis to an individual under 18 years of age, promote cannabis in a manner that is appealing to young persons, or sell cannabis with packaging or labelling that is appealing to young persons. The issue of youth protection, and whether these measures will be effective will require much further study and informed discussion.

Criminalization 

One of the most significant issues regarding the criminalization of cannabis has been its disproportionately negative effect on already-marginalized groups. Studies have found that black, Indigenous, and other racialized communities in Canada were disproportionately criminalized by cannabis convictions, despite similar rates of consumption across different groups leading up to legalization – an issue that Bill C-45 sought to address.[13]  Some critics argued the social justice and equity components of the Cannabis Act were inadequate, and something of an afterthought in the legalization process.[14]

Marijuana Usage 

Many people who followed the legalization of cannabis were interested in the impact legalization would have on usage rates. The National Cannabis Survey (NCS) has been collecting self-reported data about Canadian’s cannabis consumption every three months since February 2018, and found the following results:[15]

• In 2019, an estimated 29.4% of cannabis users reported obtaining all the cannabis they consumed from a legal source (nearly three times higher than before legalization).
• Between 2018 and 2019, cannabis use increased, particularly among persons aged 25 and older (13.1% to 15.5%) and among males (17.5% to 20.3%). The corresponding rates for 15- to 24-year-olds (27.6% to 26.4%) and females (12.3% to 13.4%) remained Whereas use among 15- to 17-year-olds declined (19.8% to 10.4%)

Economic Considerations   

Legalizing cannabis has significantly impacted Canada’s economy, from generating tax revenue to spurring the expansion of new sales markets.

In the first five and a half months following the legalization of cannabis, the taxes on goods and services directly related to the sale of cannabis generated $186 million in revenue.[16]

Statistics Canada data reveals the cannabis industry now generates about $13.6 billion to Canada’s economy – with the legal cannabis industry contributing about $8.4 billion (up 215 percent since October 2018), while the illicit market contributed $3.9 billion (down about 21 percent since October 2018).[17]

Legalization has also led to the development of both retail and online sale markets. The total number of cannabis retail stores in Canada rose from 217 in March 2019 to 407 in July 2019, an increase of 88%.[18] While online sales were relatively stable over the observation period, the share of online sales from cannabis stores steadily declined from 43.4% in October 2018 to 5.9% of sales in September 2019 due to the increase in the number of physical cannabis stores and their sales.[19]

Conclusion

Legalizing cannabis in Canada has been a long and complicated process that has impacted numerous facets of Canadian society. While the long-term ramifications on issues like healthcare, criminal justice reform, and the economy remain to be seen, there is no doubt that these policies will continue to require further study and will profoundly impact our nation in the years ahead.