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November 2016

Legalizing Marijuana: Are Dispensaries and Vapour Lounges
the New Tavern?

A walk around many neighbourhoods in the GTA reveals a new line of businesses that were not present last year. With the government's stated intention to legalize marijuana, and the current challenge with policing these new businesses, dispensaries and vapour lounges can now be found in many urban and suburban areas. While many of these cater to individuals with needs for medicinal marijuana and require prescriptions before dispensing, some dispensaries and vapour lounges are less scrupulous when selling marijuana or marijuana-based products to their customers. While the police have made high-profile attempts to restrict these businesses, their efforts seem to have made little impact with these businesses outwardly thriving.

While Ontario has not yet adopted the coffee shop model found in the Netherlands, it is easy to imagine this possibility with the course we are on. As there are few laws and regulations governing the actions of the dispensaries and the vape lounges, including their obligations as it relates to the sale of edible products that contain THC (the active ingredient in cannabis), one must ask how are these companies likely to be treated by the courts when they are eventually sued? Specifically, what obligations will they be found to owe to their customers? While it is impossible to forecast this with accuracy, it is reasonable to assume those who sell marijuana and edible products that contain THC for consumption on their property will have to act in a manner similar to the obligations imposed on taverns.

...a tavern's potential liability revolves around the concept of foreseeable risk of harm.

First and foremost, a tavern's potential liability revolves around the concept of foreseeable risk of harm. As a similar proposition is likely to apply to establishments that sell marijuana or products that contain THC for consumption on site, the owners and operators of these dispensaries and vapour lounges would be wise to consider these well-established legal principles regardless of whether or not their Patrons sign waivers:

  1. Do not sell past the point of impairment — The law is well settled that an establishment must take proper care to ensure that its customers do not become impaired, and not sell to anyone already impaired. In this respect, it would be wise to understand the potency of the products being sold and to closely monitor and limit the consumption of patrons even where they display no signs of impairments.
  1. Safety while on the premises — Establishments must ensure that all people on their premises are reasonably safe. This includes the need for proper signage, lighting, design, and security on site. Special considerations ought to be taken to understand the nature of a patron's impairment, the impact of the impairment on their perception of risks and to ensure that the establishment does not create or cause any unreasonable risks to the patron.
  1. Ensure that no reasonable foreseeable harm will come to the impaired person or to any other person as a result of the actions of the impaired person — This obligation has resulted in findings of negligence where taverns failed to take actions to ensure their patrons got home safely, or where the impaired person got into a fight, or struck a third party with a motor vehicle, amongst many other occurrences.

It is recommended (and will likely be a requirement) for the dispensaries and vapour lounges to have training for their employees similar to Smart Serve for taverns. This will likely include the need for the servers and security to assess patrons as they enter and leave the premises, monitor consumption while on the premises, and arrange for transportation as they are leaving the premises if impaired and requiring assistance.

While some may consider it harsh for these establishments to be held responsible for the acts of adults who voluntarily become impaired, this concern has been routinely dismissed by the Courts as these establishments are making profits, and therefore it is reasonable to impose a positive obligation to ensure the safety of the patrons, and those potentially affected by the actions of the patron. However, there can be little doubt that the patron will also be found to be contributorily negligent.

...can it be proven that the consumption of marijuana or edibles caused or contributed to the actions giving rise to the litigation?

There are many issues associated with legalization that will require clarification in time. An obvious one is associated with causation: can it be proven that the consumption of marijuana or edibles caused or contributed to the actions giving rise to the litigation? While this is a question of law, expert toxicologists will be instrumental in either advancing or defending such a position.

While much of what is set out above represents simple recommendations for the owners and operators of the dispensaries and vapour lounges based on what the author anticipates soon, clarification on much of this is expected in the days ahead. In this respect, the Government of Canada has created a task force to seek input and make recommendations relating to the new system to legalize, strictly regulate and restrict access to marijuana. The task force's advice will then be considered by the Government of Canada as the new framework is developed. It is our belief that many of these duties will be addressed in the report.

All in all, it is a new day in Ontario. While the law will likely take time to catch up to the realities of what is happening on the streets, it is never too early for people and businesses to plan for the days ahead.

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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