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A Joint Effort: Nova Scotia Court Certifies Canada’s First Ever Cannabis Product Liability Class Action

With the legalization of medical and recreational cannabis in Canada, product liability litigation was almost certain to follow. Recently, the Nova Scotia Supreme Court certified the first ever Canadian product liability class action against a licensed cannabis producer in Downton v Organigram Inc. This certification decision signals that Canadian cannabis producers will not be immune to the emerging trend seen in the United States, where the decriminalization of cannabis in certain states has spurred the growth of product liability class actions in the industry. The Downton decision does provide some hints as to how the Canadian plaintiffs’ bar will frame and approach such actions and how cannabis producers can implement strategies to avoid and mitigate the risk of litigation arising from their products.

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Cannabis in Canada: The State of the Law Today

UPDATE: As of April 13, 2018, every province and territory in Canada had tabled legislation outlining their plans for regulating cannabis. Our primer has been updated to include proposed legislation details from across the country.

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Federal Government Releases its Proposed Approach to Cannabis Regulations

On November 21, 2017, Health Canada released its proposed approach to the regulation of cannabis in anticipation of legalization in July 2018. The proposal addressed seven broad areas relating to cannabis activities: (i) licensing and permitting; (ii) security and security clearances; (iii) cannabis tracking; (iv) cannabis products; (v) packaging and labelling; (vi) cannabis for medical purposes and (vii) health products and cosmetics with cannabis. 

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TMX Provides Update on Clearing Securities of Issuers with Cannabis-Related Activities in the United States

On November 24, 2017, the TMX Group (TMX) issued a news release updating the ongoing engagement that the CDS, which is owned and operated by the TMX, has with the Canadian Securities Administrators (CSA) to address the clearing of trades of issuers with cannabis-related activities in the United States. While little substantive developments were announced, the TMX emphasized that the final decisions will be based on each exchange’s role in assessing listing requirements, particularly analyzing an issuer’s compliance with applicable laws. This announcement comes just over a month after the TMX and CSA issued substantially different standards that each entity will apply to assess listed cannabis companies with activities in the United States (as summarized in our blog post dated October 17, 2017).

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Quebec Introduces the Quebec Cannabis Regulation Act

On November 16, 2017, the Government of Quebec released its proposed cannabis legislation, Bill 157, an act to constitute the Société Québécoise du Cannabis (the SQC), to enact the Cannabis Regulation Act and to amend various highway safety-related provisions (the Act). The Act elaborates on the Quebec Government’s plan to establish the SQC, a subsidiary of the Société des alcools du Québec, as the sole distributor of cannabis in the province. If passed, the Act will lay the foundations for a stricter cannabis regime as compared with other provinces.

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Manitoba Announces Distribution and Retail Model for Cannabis in the Province

On November 7, 2017 the Premier of Manitoba announced the proposed model of cannabis distribution throughout the province when the Federal Cannabis Act comes into force on July 1, 2018. Unlike the Ontario and Quebec models, whereby the liquor control bodies in each province have been designated as distributors and retailers of cannabis, the model in Manitoba is considered a hybrid retail and distribution, carving out roles for both the public and private sector.

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Ontario Introduces the Ontario Cannabis Act, 2017

On November 1, 2017, the Government of Ontario released its proposed cannabis legislation, Bill 174, Cannabis, Smoke-Free Ontario and Road Safety Statute Law Amendment Act (the Act). The substance of this bill is Ontario’s Cannabis Act, 2017, but the bill also details amendments to related legislation in the form of a new Smoke Free Ontario Act, 2017 and amended Highway Traffic Act. If passed, the Act would regulate the use and distribution of recreational cannabis in Ontario upon the enacting of the federal Cannabis Act in July 2018.

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