Recreational Cannabis Regulation in BC

The BC government regulates non-medical cannabis under the following legislation:

1. The Cannabis Control and Licensing Act (CCLA), which regulates the possession, retail sale, supply, and production of non-medical cannabis in BC; and
2. The Cannabis Distribution Act (CDA), which establishes the Liquor Distribution Branch (LDB) as BC’s only wholesale distributor of cannabis

1. The Cannabis Control and Licensing Act (CCLA)

A. Licensing Regime

One of the most important components of the CCLA is the retail licensing regime in Part 4. The CCLA authorizes the general manager (the “GM”) to grant licenses to operators of private cannabis retail stores. The most important characteristics of this licensing scheme include the following:

(a) Applications.

• An individual or company that wants to operate a retail cannabis store must apply to the GM through an online portal.

(b) Considerations in Assessing Applications (s. 26):

• The GM must be satisfied that the applicant is “fit and proper” before they will issue, renew, transfer, or amend a license.
• The GM must not issue a license if they believe to do so would be contrary to the public interest.
• The applicant must be the owner of the establishment, or have an arrangement that gives the applicant control over the establishment for a sufficient duration.
• The GM has the authority to conduct background checks on applicants, their “associates”, and people who have connections to their associates.
• The GM may reject an applicant if they believe the applicant is financially tied to one particular federal producer (see s. 26(4)).

(c) Impartiality of Licensee (s. 50)

• A licensee cannot arrange to sell the cannabis of one producer at the exclusion of another, nor can a licensee accept money, gifts, rewards or remuneration, directly, or indirectly, to promote, induce or further the sale of a particular class or brand of cannabis.

(d) Terms and Conditions (s. 32)

• The GM can impose additional terms and conditions on licensees respecting all matters related to the sale, supply, production, packaging, purchase and consumption of cannabis. These terms and conditions can relate to, among other things:
  • The store hours of the licensee;
  •  Record-keeping requirements;
  • Advertising and branding
  • Employee and patron safety;
  • Classes of cannabis offered for sale;
  • The pricing of cannabis offered for sale
  • Storage and disposal of cannabis; and
  • The physical structure of the establishment.

(e) What can be done/sold in licensed establishments

• Only Cannabis and cannabis accessories (both as defined in the Cannabis Act) can be sold by licensees.
  • i.e. licensees cannot sell snacks, tobacco, or other non-cannabis related items.
• There will be no licenses that allow smoking-lounge type businesses (equivalent to a bar under liquor licensing)
• The Liquor Distribution Branch will only distribute pre-packaged products that are compliant with the federal packaging regulations in ready-to-sell formats. Retailers will not be able to repackage these products.

(f) Employees and Agents of licensees (s. 20)

• Employees or agents of a person who is authorized to do something under the CCLA may do that thing, so long as it is done as part of their employment duties and functions, or their role as agents, and functions, and in a manner consistent with any condition that applies to the employer doing that thing.
• Individuals who act as agents of a person who is authorized to do something under the CCLA may do that thing, provided it is done as part of their role as agents.

(g) Promoting Sales (s. 16)

• A person must not promote cannabis for the purpose of selling it unless they hold a license authorizing that activity.
  • So promotion of cannabis sales may only be possible if it is explicitly permitted by the licensee’s license.

(h) Local Governments’ Power (s. 33)

• The GM cannot approve an application for a license unless the municipality in which the applicant’s establishment will be situated has recommended that the license be issued.
  • This essentially gives local governments a veto power, and creates the possibility that some municipalities will have no retail stores.
• Although the CCLA does not put a limit on how many retail licensees there can be, local governments can effectively put a cap on the number of stores in their jurisdiction through zoning bylaws, business licensing bylaws, or by not recommending any more licenses for approval.
• If a local government recommends that a license be issues, it is still at the discretion of the GM to issue it or not.
• Local governments can impose fees on applicants as part of the review/recommendation process.
• All of the above powers apply to Indigenous Nations as well.

(i) Reporting Requirements (s. 46)

• Section 46 of the CCLA requires that licensees provide the GM with certain information.
  • For example, if the licensee is a corporation, they must notify the GM in the event there is a change of directors or officers. Furthermore, the licensee may be required to provide the GM with the names and contact information of the shareholders of the corporation.

(j) No “Self-Service” Sales (s. 48)

• Licensees cannot sell cannabis or cannabis accessories through “self-service devices”, like vending machines.

(k) No Sales to Intoxicated People (s. 49)

• Licensees cannot sell cannabis or cannabis accessories to people who are, or appear to be, intoxicated from alcohol or drugs, nor can they let those people into their establishments.

(l) General Manager Inspections (s. 84)

• The GM can inspect a licensee’s premises at any time to ensure compliance with the Act.
• The GM can inspect any premises (not just a licensee’s) when there are reasonable grounds to believe there is a contravention of the Act (s. 86), unless the premises are a residence, in which case a warrant is required.

(m) Temporary Suspension (s. 36)

• A license may be suspended, rescinded or amended with special terms and conditions in the public interest and without prior notice.

(n) Registration Requirements (s. 117)

• People who work in the cannabis industry may need to register with the government

(o) Pricing

• There are no pricing requirements imposed on licensees under the Act (except the possibility of the GM imposing pricing requirements on a particular licensee under s. 32).
  • However, since retailers have to buy their product from the LDB, it is unlikely they will ever be able to sell for less than the government stores (much like it is with alcohol).

B. Private Possession and Use

The CCLA establishes the rules governing the private possession and use of cannabis. For the purposes of these rules, “public place” is defined to mean (a) any place to which the public has access as of right or by invitation, express or implied, whether or not a fee is charged for entry, and (b) any vehicle or boat located in a pace referred to in paragraph (a) or in any outdoor place open to public view.

(a) Minimum Age

• No one under the age of 19 may buy or use cannabis or cannabis accessories.
  • An increase from the federally-imposed minimum age of 18.

(b) Maximum possession of dried cannabis(s. 52)

• An individual must not possess more than 30g of dried cannabis in a public place (or the equivalent to 30g of dried cannabis in other forms – where such equivalency is set out in Schedule 3 of the Cannabis Act (Canada))
• This does not apply to medical cannabis
• This limit does not apply to licensees and their employees and agents when acting under the authority of the license (s. 51(d))

(c) Maximum possession of plants (s. 53 and 56)

• An individual cannot possess more than 4 plants in a public place, and must not possess any plants that are budding or flowering in a public place.
• An individual can grow up to 4 plants at home (which can be budding or flowering)

(d) Limitations on Public Consumption

• Consuming cannabis on school property, and within a prescribed distance therefrom, is prohibited (s. 61).
• Smoking or vaping on health board property is prohibited, unless in a designated smoking area (s. 62)
• Smoking or vaping cannabis outdoors at skating rinks, sports fields, swimming pools, playgrounds, skate parks, spray or wading pools, and within a prescribed area of a park is prohibited (s. 63)
• Smoking in enclosed public places, the workplace, or common areas of apartment buildings and condominiums is prohibited. (64(1))
• Smoking and vaping at a bus stop is prohibited (s. 66)
• A person must not smoke or vape cannabis within a prescribed distance from a doorway, window or air intake of an enclosed public place, a workplace, or a common area of an apartment/condominium. ((64(3))

(e) Cannabis use and vehicles (s. 65)

• Consuming cannabis while operating a vehicle or boat is prohibited (whether moving or not)
• Operating a vehicle or boat while someone else in the vehicle or boat is smoking or vaping cannabis is prohibited.
• A person cannot be in possession of cannabis while operating a vehicle, unless it is unopened or is not readily accessible.

(f) Vicarious Liability (s. 68)

• If someone consumes cannabis on school property (contrary to section 61), then the education authority, superintendent and principle are all deemed to have contravened that section and are liable for that contravention.
• If someone smokes or vapes in an enclosed public space or a common area of an apartment/condominium, or if someone smokes/vapes within a prescribed distance from a doorway, window or air intake of those places, then the owner, manager and lessee of the place are each deemed to have contravened the Act, and are each liable for the contravention.
• If someone smokes or vapes cannabis in an enclosed workplace, or within a prescribed distance from a doorway, window or air intake of an enclosed workplace, then the employer is deemed to have contravened the Act, and is liable for the contravention.

(g) Intoxication in a public place (s. 78)

• A person who is intoxicated from cannabis must not be or remain in a public place.

(h) Landlord Liability (s. 80)

• Landlords cannot allow their tenants to sell cannabis in contravention of the CCLA or the Cannabis Act.
• That is, landlords must ensure that either their tenant is not selling cannabis, or, if their tenant is selling cannabis, that their tenant is properly licensed.
• It is a defence to a charge of contravening this section if the landlord took reasonable steps to prevent the premises being used for the sale of cannabis.
• A contravention of this section is an offence, and the Landlord could be liable to a fine of not more than $100,000, if a corporation, or to a fine of not more than $50,000 or to imprisonment for not more than 12 months, or both, if an individual.

2. Cannabis Distribution Act (CDA)

The CDS establishes the Liquor Distribution Branch (LDB) as the exclusive wholesale distributor in the province. The CDA further establishes the Liquor and Cannabis Regulation Branch (formally called the Liquor Control and Licensing Branch) (LCRB) as the body responsible for licensing private retail stores.

(a) Federal Sourcing (s. 3)

• The LDB may only buy cannabis from federally licensed producers.

(b) Provincial Retail

• The BC government will establish and operate retail stores (‘BC Cannabis Store’) and online stores to sell cannabis.
  1. Licensees are not able to sell online.

3. Miscellaneous

• Motor Vehicle Act Amendments will give police more tools to get drug affected
  • • E.g. a new 90-day driving prohibition for drug-affected drivers

4. Federal Promotion & Packaging regulations (Cannabis Act):

• Exceptions for:
  1. literary, dramatic, musical, cinematographic, scientific, educational or artistic work that uses or depicts cannabis– provided no consideration is given.
  2. reports, commentary, or opinions in respect of cannabis – provided no consideration is given.
  3. promotion by a person who is authorized to produce, sell or distribute cannabis that is directed at another person who is authorized to produce, sell or distribute – but not at a consumer.
• Default position (s. 17):
  • • i. Subject to the below exceptions, a person cannot promote cannabis, any cannabis accessory, or any service related to cannabis, including:
      • Communicating information about its price
      • Doing so in a manner that could be appealing to young people
      • Testimonials or endorsements
      • Depiction of a person, character or animal, whether real or fictional; or
      • By presenting a brand element in a manner that associates it with, or evokes a positive or negative emotion about or image of, a way of life such as one that includes glamour, recreation, excitement, vitality, risk, or daring.
• Exception 1 – Informational Promotion (s.17(2),(3)):
  • A person that is authorized to produce, sell or distribute cannabis may promote cannabis by means of Informational promotion or brand-preference promotion if the promotion is:
    • Addressed and sent to an individual older than 18 (19 in BC);
    • In a place where young people are not permitted;
    • Communicated by telecommunication, where the person has taken reasonable steps to ensure that the promotion cannot be accessed by young people
    • In a prescribed place and manner
  • The same holds for the promotion of cannabis accessories or services related to cannabis (but the person need not be authorized to produce, sell or distribute)
  • But see s. 16 (item (g) above) for provincial rules.
• Exception 2 – Point of Sale promotion (s. 17(4),(5))
  • A person may promote cannabis or cannabis accessory at the point of sale only by indicating its price and/or availability.
• Exception 3 – Brand Elements (s. 17(6))
  • A person may promote cannabis, a cannabis accessory or a service related to cannabis by displaying a brand element on a thing that is not cannabis or a cannabis accessory, other than:
    • i. A thing that is associated with young persons;
    • ii. A thing that there is reasonable grounds to believe could be appealing to young persons; or
    • iii. A thing that is associated with a way of life such as one that includes glaour, recreation, excitement, vitality, risk or daring.
• No misleading promotion (s. 18)
  • It is prohibited to promote cannabis in a manner that is false, misleading or deceptive or that is likely to create an erroneous impression about its characteristics, value, quantity, composition, strength, concentration, potency, purity, quality, merit, safety, health effects or health risks
• Promotion Using foreign media (s. 20)
  • Cannot promote cannabis/cannabis accessory/service related to cannabis, in a way that is prohibited under the Cannabis Act, outside of Canada.
• Sponsorship (s. 21, 22)
  • Cannot use any of the following to sponsor a person, entity, event, activity, or facility:
    • i. A brand element of cannabis/cannabis accessory/service related to cannabis
    • ii. The name of a person that
      1. Produces, sells or distributes cannabis
      2. Sells or distributed a cannabis accessory, or
      3. Provides a service related to cannabis
    • Cannot incorporate any of the above into the name of a facility if that facility is used for a sports or cultural event/activity.
• Inducements:
  • A person who is authorized to sell cannabis/cannabis accessory cannot:
    • . Provide free samples of cannabis to consumers, or offer free cannabis in consideration of the purchase of any thing or service
    • ii. Provide or offer to provide anything, including the right to participate in a game draw, lottery or contest if it is provided as an inducement for the purchase of cannabis/accessory.
• Packaging:
  • Cannot appear to a young person; set out a testimonial/endorsement; depict a person, character, or animal; be associated with a way of life; contain false/misleading information (s. 26)
  • Immediate packaging must be opaque or translucent; prevent contamination; keep cannabis dry; have security features to prevent tampering; be child resistant; not contain more than 30g (s. 108 Cannabis Regulations)
  • Interior and exterior surface of container cannot display brand element.
  • Must be a uniform colour
  • Cannot have a “lustre of metal”; be fluorescent; and must create a contrast with the yellow health warning.
  • Must have a smooth texture.
  • Must not be capable of emitting scent or sound
  • Must not include a cut-out window.

This article is provided for informational purposes only, is not legal advice and should not be relied upon as legal advice. Should you wish to obtain legal advice on this or any other topic you will need to formally engage our firm. Please contact one of our lawyers in Vancouver, BC for more information at [email protected] or 604-629-5400

For a more detailed look at BC’s cannabis retail licensing process, check out our blog here.

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