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September 2017

Marijuana Legalization: Ontario Weighs In 

To the disappointment of many and the surprise of few, the Ontario Government has decided to provide access to recreational cannabis through a government corporation similar to the LCBO. Ontario plans to open 40 stores across the province by July 2018 when cannabis becomes legal with another 110 by summer of 2020. It also will allow for the purchase of cannabis online through the governing body's website. While this may sound sufficient, it is worth highlighting that there are over 650 LCBO locations throughout the province.

The Ontario Government has stated clearly that the dispensaries that are found in many communities are illegal and will remain illegal. Funds and tools will be made available to the authorities to ensure that these businesses are not allowed to continue to operate.

While there are many valid reasons behind Ontario's decision, many of the concerns as expressed in the Federal Government's Task Force Report will not be properly addressed by the chosen implementation strategy. Specifically, the black market participants will likely remain present and potentially thriving due to the likely lack of easy access to legal cannabis. Additionally, the costs of the government model may not be low enough to drive away non-regulated participants.

Despite these concerns, there are certain obvious positive features associated with the model selected by the Ontario Government. First and foremost, quality control will likely be extremely high which should reduce the risks to consumers by allowing them to know exactly what they are purchasing and consuming. There will also be strong controls in place to ensure minors (the legal limit has been stated as 19) are not able to access cannabis.

The Ontario Government has not given any indication at this time whether consumption venues (similar to bars) will ever be authorized though they have left this door open for further studying and consideration. For now, consumption of marijuana remains illegal in any public space and motor vehicles.

In terms of the edible marketplace, the Ontario Government has not suggested whether this will be legal in the future, how these products will be available to consumers or what will be made available to the consuming public. This is significant as data from other jurisdictions that have legalized cannabis suggests that edible products are some of the most popular cannabis products with this segment growing each year as new products become available.

From a risk perspective, the path chosen by the Ontario Government should be widely supported by risk managers and insurers. While the risks associated with black market cannabis remain, the limited and controlled access by the recreational market ought to minimize much of the potential damage that can be reasonably forecasted associated with the legalization of cannabis.

Ultimately, it will take years to determine whether the decision by the Ontario Government was appropriate for addressing the many and multi-faceted challenges that will arise following the legalization of cannabis. While the decisions made to date are certainly reasonable and supportable, they may ultimately not be sufficient to eliminate the other concerns that will become present following the legalization of cannabis.

See all articles in this theme of Legalizing Marijuana:

  1. Are Dispensaries and Vapour Lounges the new Tavern?
  2. Product Liability for Producers, Distributors, and Dispensers
  3. Drugged driving and how insurers can manage risk
  4. Medical Marijuana: Considerations for Employers
  5. Drug Recognition Experts and Drug-Impaired Driving
  6. And The Litigation Begins...
  7. Potential Impact on Social Hosts
  8. Marijuana Legalization: Ontario Weighs In


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