The legalization of recreational cannabis in Canada is expected by July 2018, and many companies are preparing for this new situation. The legal and regulatory framework is still unclear, but lawyers in business law are already heavily solicited.
The bill was not yet passed that it swarmed already in law firms.
The primary market for recreational cannabis is valued at $ 8.7 billion, and the secondary market is valued at $ 12.7 to $ 22.6 billion in Canada, according to a Deloitte study. A manna.
Therefore, “companies do not want to miss this business opportunity and have been preparing for several months to be ready when the sales authorization comes into effect,” says Frédéric Desmarais, a lawyer in labor law and employment.
The lawyers are already accompanying them in the steps required for start-up: applications for operating and financing licenses, commercial leases, etc.
In the ranks, there are companies, already established in the market for cannabis for therapeutic use, who want to expand their business to cannabis for recreational use. Companies currently operating in a different sector and all new companies are also taking steps to invest in this market. Foreign firms are also interested. Quebec could be a favorite territory for their establishment, “thanks in particular to tax credits in the field of research and development,” says François Auger, partner and lawyer in business law and taxation.
Still a lot of blur
However, it is not easy to embark on a new niche that is potentially lucrative, but framed by laws that are not yet known in detail. “Our clients have a hard time getting financing because, often, financial institutions do not want to get involved while the legislative guidelines are still unclear. Risk factors are still too numerous for them, “says Charles Wagner, a lawyer.
Never mind, companies want to advance in their preparation, and the parts in which they can begin to act with the help of business lawyers are numerous.
“Without putting any moral connotation since cannabis has been legally authorized by the government, it can now be considered as an agri-food product that will have to be grown, stored, handled, distributed, etc. So we can start working on some aspects, but we are waiting for the federal and provincial government regulations on various points, such as marketing and labeling obligations, authorized sales points, etc., “said Mr. Auger. Tricia Kuhl, partner and business law attorney, including life sciences.
In the absence of specific regulation, lawyers rely on the existing smoking and alcohol policy to guide their clients, since cannabis presents similar challenges.
Big challenges for employers
Another target of marijuana business attorney law firms in connection with the legalization of recreational cannabis: employers. “This new legislation presents great challenges for them,” says Marie-Hélène Jolicoeur, a lawyer in labor and employment law.
Law firms organize themselves to support their various clients upstream and to position themselves, too, in the market created by the legalization of cannabis for recreational use. Most of them have established multi-disciplinary, pan-Canadian, or international working groups for the larger ones, in order to benefit from the experience of lawyers from places where legalization is already in place.