Flying high - Recreational cannabis now legal in Canada

November 5, 2018

By Amanda Branch

Bill C-45, colloquially, the “Cannabis Act” (the “Act”) came into force on October 17, 2018 legalizing recreational marijuana consumption and sales in Canada. Navigating through the weeds to understand the regulation of wacky tabacky can be challenging, but don’t let that blunt your enthusiasm for this new regulatory regime.

Promotion

The Act sets out strict rules for promotion and only those licensed to sell, produce, or distribute cannabis are permitted to conduct promotions of cannabis products. The prohibitions on promotion are intended to protect public health and safety, including by restricting young persons from accessing cannabis and protecting people from inducements to use cannabis. 

Prohibitions

The Act generally and broadly prohibits the promotion of cannabis, cannabis accessories and services related to cannabis, including by doing any of the following:

• communicating information about its price or distribution;
• doing so in a way that there are reasonable grounds to believe could be appealing to young people;
• using a testimonial or endorsement;
• depicting a person, character or animal, whether real or fictional; or 
• presenting it in a way that associates cannabis or your brand with a lifestyle that appears glamorous, risky, or exciting.

The Act prohibits the promotion of cannabis and cannabis accessories in a way that is false, misleading or deceptive or in a way that is likely to create an erroneous impression about its characteristics (such as strength, potency, purity, safety or health risks). 

It is also prohibited to: 

• publish, broadcast or otherwise disseminate prohibited promotions; 
• promote a sponsorship; 
• display brand elements or names on a facility used for a sports or cultural event or activity; 
• engage in inducements; and 
• engage in prohibited promotions outside of Canada. 

Permitted Promotions

Certain types of promotions are permitted in specific circumstances; however, these promotions are still subject to the general prohibitions relating to promotion. The Act permits “brand preference promotions” or “informational promotions” about cannabis, cannabis accessories or services related to cannabis, so long as the promotion is: 

• addressed and sent to a named individual over 18 years old;
• in a place where young people are not legally allowed to go; or
• communicated by telecommunication, so long as reasonable steps are taken to ensure the promotion won’t be accessed by a young person.

The Act allows the promotion cannabis or a cannabis accessory or service by “displaying a brand element” of cannabis on a “thing that is not cannabis” so long as that “thing” is not associated with young people, is not of appeal to young people, and is not associated with a glamorous, risky or exciting lifestyle. 

Point of sale promotions are also permitted in limited circumstances, specifically that a person who is authorized to sell cannabis may promote it at the point of sale only by indicating its availability, its price or its availability and price. Similarly, cannabis accessories may be promoted at the point of sale if the promotion indicates only its availability, its price or its availability and price. It is worth keeping in mind that cannabis or cannabis accessories cannot be sold in a package or with a label that:

• is appealing to young people;
• uses testimonials or endorsements;
• uses a mascot, whether real or fiction, person or animal;
• associates the cannabis or the brand with a lifestyle that appears glamorous, risky, or exciting; or
• contains any information that is false, misleading or deceptive or that is likely to create an incorrect impression about the characteristics of the cannabis or the accessory.

Non-Application

If specific conditions are met, the Promotion provisions of the Act do not apply to: 

• a literary, dramatic, musical, cinematographic, scientific, educational or artistic work, production or performance that uses or depicts cannabis, an accessory or a service, or a brand elements if no consideration is given, directly or indirectly, for that use or depiction in the work, production or performance
• a report, opinion or commentary, so long as no direct or indirect compensation is given;
• business to business promotions – that is, a promotion from one person authorized to produce, sell or distribute directed to another, but not directly or indirectly targeted to consumers;

In addition to the Cannabis Act and its regulations, other legislation, for example provincial legislation, contain provisions related to the promotion of cannabis, cannabis accessories or services related to cannabis. Businesses intending to engage in promotional activities related to cannabis are encouraged to carefully consider the prohibitions to ensure their promotional activities are permitted. 

This article was first published in the IICIE blog https://www.iicie.com/users/blog.php?blgId=MTEw