We have written about Cannabis in Canada several times in the past, mainly in the context of business disputes. In our latest article on this matter, we review the results of a recent survey conducted by Health Canada that shows that Canadians’ attitudes towards cannabis use are rapidly changing. These rapid changes in attitude signal that cannabis use is becoming more prevalent and more accepted. The implications of wider cannabis use, adoption, and changing attitudes will likely be felt across Canadian industries, especially the business sector.
The Cannabis Act is a national framework aimed at controlling the production, distribution, sale and possession of legal cannabis in Canada. The legislation and accompanying regulations came into force on October 17, 2018.
To better understand the impact, success, and struggles of the emerging Canadian Cannabis Industry, Health Canada has developed and implemented an annual Canadian Cannabis Survey (“CCS”). The survey has been conducted annually since 2017.
The CCS examines three main areas:
- patterns of use, such as the quantities of cannabis consumed and the use of cannabis for medical purposes;
- the cannabis market, such as sources of cannabis and pricing; and
- and issues of public safety, such as impaired driving
In 2021, the CCS was amended to consider the following additional questions:
- exposure to the cannabis consumer information sheet
- home growing of cannabis plants inside and outside the home
- knowledge about potential harms from use of cannabis topicals
- knowledge of when it is safe to drive after ingesting (eating/drinking) cannabis products
- changes in cannabis use in the context of Coronavirus disease 2019 (COVID-19) pandemic
Below are some of the findings of the 2021 Survey that indicate that Cannabis is rapidly becoming an acceptable recreational activity for a growing percentage of Canadians:
- 25 per cent of people reported having used cannabis in the past 12 months
- People who had used cannabis in the past 12 months indicated typically spending close to $69 on cannabis products each month
- 67 per cent of survey respondents confirmed that they believed that smoking cannabis for recreational purposes was somewhat acceptable or completely acceptable; 68 per cent said the same for ingesting edible cannabis products, and sixty-two percent 62 per cent believed that vaping was also acceptable; this is compared to only 49 percent that believed that tobacco use was acceptable
- Smoking remains the most common method of consuming cannabis, but it has declined while vaporizing using a vape pen, drinking, and applying to skin have increased since 2020.
- More than half of those who use cannabis choose to obtain it through a legal source. 53 per cent reported a legal storefront as their usual source, an increase from 41 per cent in 2020, whereas 11 per cent reported obtaining cannabis from a legal online source.
Good news for Canadian Cannabis Businesses – the legal cannabis market is growing and the grey market is shrinking
Of the information collected through the 2021 CCS, the most significant for the Canadian cannabis business is the fact that a majority of Canadian users now report using a legal storefront as their usual source of cannabis. This represents a significant 12 per cent increase in the number of Canadians that rely on legal stores to supply their cannabis needs and demonstrates that the legal industry is constantly growing and that there are still many opportunities to enter the industry and operate a thriving and growing cannabis business.
In Ontario, Cannabis stores are licensed by and regulated by the Alcohol and Gaming Commission of Ontario (“AGCO”). The AGCO issues Retail Store Authorisations (RSAs) each month and is currently processing thirty RSAs a week.
Like many jurisdictions that were slow to roll out retail stores, Ontario has seen explosive growth in the number of Cannabis stores that have opened in the last year.
To date, the AGCO has received over 1630 RSA applications. It has issued 489 RSAs and 430 authorized cannabis retail stores are currently open in the province. There are currently over 940 active RSA applications still to be processed.
To assist potential store proprietors to navigate the complexities of applying for and receiving an RSA for an Ontario storefront, the AGCO has put together a Cannabis Retailer Licensing Journey Map.
However, individuals and companies considering entering the cannabis industry are still faced with understanding, interpreting, and navigating a very complex, and heavily regulated industry. Whether you are a cannabis newbie, an established grower, or operate a company interested in entering the industry, our team at Bader Law can be a supportive partner on your journey into this emerging industry.
Contact Mississauga Business Lawyers For Experienced Advice on Cannabis Business and Licensing Matters
The business law team at Bader Law has decades of experience in establishing new legal identities for businesses throughout Mississauga and the Greater Toronto Area, be it as a private corporation, a limited liability partnership, a sole proprietorship, or a corporation needing to make a private placement of securities. Contact us online or at (289)652-9092.