Fulfilling an election promise, the federal government will table a bill to “legalize, regulate, and restrict access to marijuana” on April 13. While many issues have yet to be resolved – from packaging to enforcement — the bill is a major step toward legalizing marijuana for recreational use in Canada.

After it is tabled in the House of Commons, the bill will be studied in committee for several weeks, and the implementation date is not yet known. Restaurants Canada is tracking the bill and will weigh in on issues of concern for foodservice operators.

What could the new legislation mean for your business? We asked lawyer Chad Finkelstein for his thoughts from a foodservice perspective.

Read Chad’s blog post below, and let our Member Services team know if there are other questions you’d like answered. Contact Paul McKay at pmckay@restaurantscanada.org.

Marijuana and Foodservice – A High-Level Overview

Since Justin Trudeau first announced that cannabis would be legalized by his government, I have been flooded by calls from aspiring entrepreneurs who want to open dispensaries, almost every one of them expressing that the legal landscape for the retail sale of cannabis products is a ‘gray area’. So allow me to state as clearly and unequivocally as possible – the sale of marijuana is not a gray area. It is black and white. It is illegal.

In light of the lack of details so far, it is premature to speculate too much with respect to what will and will not be permitted to be sold and from where and in what province. The Ontario government has expressed its interest in regulating the sale of cannabis through LCBO stores, or stores owned by the LCBO, only, but none of us yet know for sure whether that vision will come to pass or how it will work or what other provinces will do.

But it is reasonable to conclude that, whatever form the regulatory framework for the sale of cannabis takes across Canada, restaurant and foodservice businesses will be impacted in some form, if even only that sales of snack foods are about to skyrocket!

The following is a list of developments that restaurants owners should look out for once marijuana is legalized in their respective provinces, some of which you can start turning your minds to now in preparation.

Customer Use

Given the legal restrictions already in place with respect to smoking cigarettes indoors and in certain areas outdoors, restaurant owners likely do not need to plan for the permitted consumption of marijuana products on-site. At least not the type of consumption you can see. Vaporizers are likely to be more widespread, including discrete use while patronizing your restaurant. Since your staff cannot monitor this consumption in the same way as they can when they are tracking orders of alcoholic beverages, restaurants should plan for certain customer policies, including signage, which alert customers to the prohibited consumption of marijuana on-site, in particular at restaurants frequented by families.

Occupiers’ Liability

To that end, your staff will need to be on high alert for on-site consumption of marijuana, in particular impaired customers. Currently, all restaurant owners can be legally liable for the amount of alcohol served to a customer but restaurants are not going to be serving marijuana. Does this mean that a restaurant can be liable if a customer gets too high while sitting in the restaurant and crashes his or her car? Or commits a crime? Or overdoses on guacamole (kidding)? The law in this area will surely develop in time, but it is safe to presume that if your staff ought to have known that a customer is impaired and did not take some sort of action to remove the customer from the premises or ensure a safe ride home, some degree of liability may accrue to the restaurant.

Staff Use

Every restaurant should already have a policy in place which prohibits the consumption of alcohol or drugs while staff are on the job or coming to work impaired. But, again, with the proliferation of vaporizers, that consumption will be easier to conceal. The legal issues associated with impaired performance on the job will not change with the legalization of marijuana but the public scrutiny on the first wave of offenders will be intense. Restaurant owners should be vigilant in ensuring that its employees are aware of anti-drug policies, and swift to enforce violations of it, but check with your lawyer about the legality of imposing mandatory drug tests on your employees before implementing it as a control in your business.

Cooking with Cannabis

Will any province permit restaurant owners to become licensed to make use of cannabis in any of its menu items? Or to grow it on-site in light of the rules permitting some growth of cannabis plants in the comfort of your own home? It seems unlikely, especially given the possibility of cross-contamination with other products. But could a restaurant whose entire menu is comprised of cannabis products and edibles ever get validly licensed with a province? There is no way of yet knowing, but it is not inconceivable.

Selling Cannabis and Edibles

Apart from actually cooking with cannabis and growing it on-site, will some restaurants simply be licensed to actually sell it to customers or sell pre-made edibles manufactured by licensed producers? Given that restaurants are not able to sell tobacco products, it seems unlikely that licenses will be granted to restaurants to sell cannabis products, including edibles. Presumably, only those dispensaries which are single-purpose cannabis-retail stores will be permitted this right. An era where a regulator will issue liquor-type licenses to restaurants to sell cannabis in a tightly regulated environment is not yet being contemplated for the immediate future.

Franchising

It remains to be seen what licensing model is rolled out across the provinces which will determine the means available for mass distribution, including by way of franchising dispensaries. But restaurant owners, especially those who are already franchised, may very well have the existing infrastructure to support a network of franchised dispensaries, and co-branding opportunities may start to look very intuitive for certain restaurants and nearby dispensaries.

Advertising

So far, the federal government’s task force has recommended that permitted cannabis advertising activities be regulated in the same manner as is tobacco advertising activities. That seems likely to come to pass, so restaurant operators should be sure to not engage in any advertising activities which are suggestive of cannabis consumption (including the promotion of it) or which reflect cannabis as a lifestyle enhancement. Restaurants should also be sure to only permit on-site or on-menu advertising that is allowed by law, otherwise you risk being found liable for aiding and abetting the advertising and promotion of a criminal offence.

The regulatory frameworks for marijuana and the resulting distribution and consumption landscapes are in their respective infancies. Any restaurant owner who believes that they are currently permitted, or might be permitted, to sell cannabis products is most certainly mistaken. But changes are coming and the effect on foodservice will be inevitable. The coming weeks and months will presumably add some needed clarity.


Chad Finkelstein is a partner at Dale & Lessmann LLP (www.dalelessmann.com) in Toronto and can be reached at cfinkelstein@dalelessmann.com and Twitter.com/@ChadFinkelstein.  

Author

Chad Finkelstein is a franchise lawyer at Dale & Lessmann LLP (www.dalelessmann.com) in Toronto and can be reached at cfinkelstein@dalelessmann.com or (416) 369-7883.