The Economic Impacts of Cannabis Related Legal Decisions in Canada and the Snoop Doggization of the Marijuana Industry – Views From The 6

This is a guest contribution by Johnny Jaswal, Managing Director of the Jaswal Institute. If you would like to submit a contribution please contact Bill Beatty for submission details. Thank you.

On March 24, 2016, Health Minister Jane Philpott released a statement announcing that the government will not appeal a Federal Court ruling in Allard that found that the Marihuana for Medical Purposes Regulations (“MMPR”) regime, made pursuant to the Controlled Drugs and Substances Act, infringes section 7 Charter rights to liberty and security by unjustifiably restricting access to medical marijuana. The Court found that, under the single source system of a licensed producer, there is no guarantee that required marijuana will be available when needed at an acceptable price level due to the MMPR structure and market characteristics. According to the Court, limiting patients to government-approved contractors and eliminating the ability to grow one’s own marijuana or to engage one’s own designated producer is not tenable.

Given that liberty and security interests are engaged, the Court held that MMPR regulatory restrictions, including prohibitions against plant growth by patients or their delegates, are arbitrary, overbroad and do not minimally impair section 7 rights. The Court declared the entire MMPR regime invalid, striking it down, but suspended the operation of the declaration of invalidity for six months to permit Canada to enact a new or parallel medical marijuana regime. As stated by Health Minister Jane Philpott on March 24, 2016, the government’s goal is to complete the amendment process by August 24, 2016, which is the timeframe set by the Court.

Though the case did not turn on a right to grow one’s own cannabis, which Canada has seen previously under its repealed personal cultivation regime (the Marihuana Medical Access Regulations), and instead focused on enhanced access to medical cannabis, the implications to licensed producers are potentially significant. Although the impact of specific medical marijuana amendments may not be drastic on the medical marijuana regime, the impact of the Court’s principles on future recreational marijuana regulation may have significant financial and market impacts that affect the economics of the marijuana space. In other words, in a rapidly changing environment, the status quo is subject to extreme shifts which require diligent attention.

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