How the Newly-Enacted Cannabis Statute Law Amendment Act, 2018 Affects Condominiums

Effective as of October 17th 2018, the federal Cannabis Act legalized the possession, distribution, cultivation and consumption of recreational cannabis across Canada. In conjunction, Ontario introduced the Cannabis Statute Law Amendment Act, 2017 (the “CSLA”), which received royal assent on October 17th 2018.  The CSLA amended various other provincial Acts, including the Cannabis Control Act, 2017, which was formerly called the Cannabis Act, 2017, S.O. 2017, c. 26, Sched. 1, (the “Cannabis Control Act”), the Smoke-Free Ontario Act, 2017 (the “SFOA”), the Ontario Cannabis Retail Corporation Act, 2017 (the “Cannabis Retail Act”), and the Cannabis Licence Act, 2018 (the “Cannabis Licence Act”).

Key highlights of the CSLA include:

Prohibitions on Consumption: The CSLA repeals the prohibition on places where cannabis can be consumed under the Cannabis Control Act, and instead, the CSLA incorporates the existing prohibitions on places of consumption under the SFOA. For example, under the SFOA, smoking (of tobacco and now cannabis) is prohibited in, among other places, the indoor common areas of condominium corporations.

On the other hand, under the CSLA, smoking of recreational cannabis will be permitted in places where smoking tobacco and e-cigarettes is currently allowed under the SFOA, including certain public areas (e.g. public sidewalks and parks). This represents a dramatic change from the previous Cannabis Act, 2017, which was enacted by the previous Liberal government and which had a blanket prohibition on cannabis use in any public place.^[1]

By permitting the consumption of cannabis in public spaces, including sidewalks and parks, the provincial government has allowed for greater access and opportunity for employees to smoke recreational cannabis during the workday. Accordingly, this increases the need for clearly-worded policies regarding workplace cannabis use. Condominium corporations should require prospective contractors, agents and employees to adopt within their contracts, the condominium’s policy regarding workplace drug and alcohol use. If your condominium corporation does not have such a workplace policy in place yet, please contact the condominium’s counsel.

Changes to the Cannabis Retail Marketplace: The CSLA also enacts the Cannabis Licence Act (yet to be proclaimed into force), which sets out a licensing scheme for private cannabis retail stores administered by the Alcohol and Gaming Commission of Ontario (the “AGCO”), as opposed to the public retail model contemplated under the previous Liberal government. That being said, the Ontario Cannabis Retail Corporation (the “OCRC”) will remain the sole retailer of legalized recreational cannabis to consumers in Ontario for now through its online Ontario Cannabis Store platform (“OCS”) – but the new provincial government is expecting to license 500 to 1,000 private brick and mortar cannabis retailers in or around April of 2019.

In order to operate a cannabis retail store, a person will be required to have a Retail Operator License (“ROL”),^[2] and a retail store authorization (“Authorization”).^[3] A separate Authorization is required with respect to each cannabis retail store.^[4] An Authorization may only be issued to the holder of an ROL.^[5] Furthermore, the Cannabis Licencing Act provides for a second cannabis retail manager licence, which is required in order to carry out specified functions in respect of a cannabis retail store.^[6] For example, only an authorized cannabis retail manager may supervise employees, oversee or coordinate the sale of cannabis, manage compliance issues in relation to the sale of cannabis, and have signing authority to purchase cannabis or enter into contracts or make offers of employment.^[7]

The implications of the provincial government’s change in policy direction regarding brick and mortar cannabis stores has some notable implications for condominium communities. For example, under the new privatized distribution of recreational cannabis in Ontario, if your condominium corporation is zoned for retail use, an owner with an ROL can apply for an Authorization for a prospective cannabis retail store in a unit in the condominium corporation. It remains to be seen whether the AGCO’s specific requirements for granting a ROL or an Authorization will preclude any cannabis retail operations from existing within a condominium corporation.

Delivery of Cannabis to Condominiums: Canada Post delivery persons are no longer requiring that the individual who ordered the cannabis shipment online from the Ontario Cannabis Store be the same individual who shows their ID and signs for the OCS package. The OCS’ official website has now been updated to merely state that, “An adult 19 years of age or older must be present and provide legal photo identification in order to sign for the package.”  This appears to open up the possibility that a Canada Post delivery person may attempt to have a condominium’s concierge sign for the OCS shipment, so long as said concierge is older than 19 years old – despite previous reporting in the news to the contrary.

If a Board does not wish to have its concierge services provider accept such packages from the OCS on behalf of individual purchasers, then we recommend that condominium Boards and Management instruct said concierge services provider in writing that they should refuse to accept any packages from the OCS (or any package that requires a 19+ person to sign for it), and should ratify such a Board policy at its next duly-constituted Board meeting.

As the federal and provincial laws surrounding the use and distribution of recreational cannabis continue to evolve, the team at Elia Associates is pleased to advise condominium corporations on how they can meet the needs of their communities in light of these recent legislative changes.

[1] Subsection 11(1)(a) of the Cannabis Control Act, 2017 prior to being amended by the CSLA.

[2] Section 3 of the Cannabis Licence Act, 2018, S.O. 2018, c. 12, Sched. 2 (the “Cannabis Licence Act”).

[3] Section 4 of the Cannabis Licence Act.

[4] Subsection 4(5) of the Cannabis Licence Act.

[5] Subsection 4(1) of the Cannabis Licence Act.

[6] Subsections 5(1) and 25(1) of the Cannabis Licence Act.

[7] Subsection 5(1) of the Cannabis Licence Act.

All of the information contained in this article is of a general nature for informational purposes only, and is not intended to represent the definitive opinion of the firm of Elia Associates on any particular matter. Although every effort is made to ensure that the information contained in this newsletter is accurate and up-to-date, the reader should not act upon it without obtaining appropriate professional advice and assistance.

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