Canada cannabis trademarksFor quite some time now, my firm’s cannabis lawyers have been working with Canadian clients looking to enter various state-legal markets for cannabis in the United States. Now, with recreational cannabis legalization poised to happen in Canada, we’re predicting even more collaboration between Canadian and U.S. cannabis companies. And one of the ways companies are already building cross-border collaborations is through IP and brand licensing deals, which raises the issue of trademark protection.

According to Canada’s health minister, federal legislation to legalize marijuana will be introduced in spring 2017. In the meantime, many Canadian companies are pursuing opportunities to partner with cannabis businesses in the United States to gain valuable industry experience, and to establish their brands in anticipation of going to market in Canada.

When Canadian clients are preparing to move into the U.S. market, one of the first questions they ask is if they can simply use their existing Canadian trademark registration as the basis for obtaining a trademark registration in the U.S.. The answer to that question is no. To obtain a trademark in the U.S., the applicant must make actual use of that mark in U.S. commerce. A Canadian applicant can also file a federal trademark application on an intent-to-use basis if they have a bona fide intent to sell their goods in the United States.

When applying for a trademark in another country, regardless of your country of origin, it is important to perform a clearance search on your mark to make sure the mark is available in the new country. Just because a mark is available in Canada, doesn’t mean the same mark will be available in the United States, or vice-versa. And even if there are no similar marks registered with the USPTO, it is also important to perform a clearance search to determine whether there are any conflicting state trademark registrations, or any companies with superior common law rights in your mark. This means that if you know you will be operating in both Canada and in the United States, you should choose a brand name you know you can register as a trademark in both countries.

Another important thing to note is that filing fees are structured differently in the U.S. than in Canada. In Canada, there is one fixed fee for any trademark application, and that fee is relatively low. In the United States, the fee will depend on the number of classes of goods and/or services the application covers.

Canada does not require a specimen of use for trademark registration or renewal purposes, but the U.S. requires a specimen be filed with every trademark application based on actual use. This specimen must show how the trademark is being used on the relevant goods and/or services, and may include packaging, labeling, or samples of advertising of services such as brochures or signage.

And finally, whereas Canada has only a single trademark register, the U.S. has what are referred to as both a “principal register” and a “supplemental register.” The supplemental register provides limited protection for certain marks that do not qualify for registration on the principal register due to, for example, mere descriptiveness. Registration on the supplemental register is limited to marks that are already in use in the U.S.. The supplemental register offers benefits to marks deemed descriptive, including the ability to use the ® symbol. It also may be used to prove exclusive use of the mark for a five-year period, which is one of the requirements for proving distinctiveness in order to transfer the mark to the principal register.

With these significant differences between Canadian and U.S. trademark law, it is important to consult with experienced international trademark counsel when pursuing trademark applications in both countries. And if your company is considering doing cross-border work, it’s important to explore whether your trademark rights can be utilized sooner rather than later.

Foreign cannabis investmentIn addition to my work on corporate, finance, and transactional issues with marijuana-related businesses, I also work with my firm’s foreign direct investment group. We have been getting a lot more interest recently about foreign investment into the U.S. cannabis industry, so today’s post will be a brief primer on some of the legal issues involved in this tricky space. As would be expected, much of this interest is from Canada, Spain, Israel, The Netherlands and Germany, with a bit from Croatia, Chile and China as well.

What does foreign direct investment mean? In general, foreign direct investment (FDI) refers to any type of cross-border transaction where a company or investor from Country A invests money in a company located in Country B. It generally doesn’t refer to dumping money broadly into stocks and bonds — it is specifically about a concentrated single-enterprise investment.

FDI exists in several forms. Foreign investors can start a new company and can finance and build it from the ground up. They can participate in a joint venture with U.S. partners. They can wholly or partially acquire a U.S. business. They can also take a lighter touch, where they provide primarily branding and process support while having U.S. parties take on the bulk of the financial risk — the basic franchise model.

State Cannabis FDI Issues. In the marijuana industry, we have already seen large FDI projects in cannabis ancillary services. Foreign investors have opened up domestic companies for the manufacture and import of cultivation equipment like grow lights and hydroponic equipment, processing equipment like automated trimmers and extraction machines, and associated inputs including soil, fertilizer, vapor pen batteries and cartridges, and more. We have also seen large amounts of foreign money come in for cannabis real estate projects. In addition to buying the real estate, the foreign investors put money into greenhouses, grow lights, storage facilities, and more to offer turnkey cultivation and processing facilities for lease to local businesses. These companies are largely unregulated at the state level, and their foreign investment issues are similar to non-cannabis businesses, dealing with things like registering as U.S. taxpayers for partnership taxed businesses, complying with FIRPTA, and dealing with immigration issues.

For firms directly involved in the buying and selling of cannabis, state restrictions become more of a concern. States like Washington do not allow anyone who is not a state resident (much less not a U.S. resident) from having any profit interest in a marijuana business. Even Oregon, which has the most liberal ownership restrictions in the country for marijuana businesses, presents some unique issues. State regulations and state laws are written with U.S. residents in mind. Though Oregon does not require state or even U.S. residency to have an ownership interest in a marijuana business, it is unclear how Oregon would deal with foreign owners that need to get a criminal background check. Neither state officials nor the FBI are likely to have any real information on foreign nationals that haven’t had prior contact with the United States. Questions remain regarding how states would deal with foreign owners of marijuana businesses. 

What about federal criminal law? The Federal Controlled Substances Act doesn’t differentiate between activities that are international, interstate, or fully intrastate in nature. Possessing, manufacturing, and distributing marijuana are illegal federally regardless of where the company’s owners live. Still, there are a couple of criminal statutes that add fuel to the fire when interstate and international commerce are involved. 18 U.S.C. § 1952, for example, criminalizes traveling or using the mail in interstate or foreign commerce with intent to distribute the proceeds of marijuana sales.

More questions arise when considering foreign ownership in the context of the Department of Justice marijuana enforcement memoranda that cannabis-legal states are working under. The main takeaway from the August 2013 Cole Memorandum was that if the states want to keep federal law enforcement away, they need to make sure their regulations prevent state license-holders from violating the various federal enforcement priorities. One of those priorities was that state regulations need to prevent “revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels.” If the state and federal criminal background check databases don’t have extensive coverage on foreign crimes, how can the state have faith that the foreign investors don’t fall into one of those categories? For now, with no broad pronouncements coming out, it appears that the federal government is taking a wait-and-see approach to foreign ownership of state cannabis businesses. It is up to state cannabis business participants and the states themselves to ensure that foreign owners do not violate federal enforcement priorities.

Counterfeit Cannabis products
Just about everything can be and has been counterfeited, including cannabis products

Our firm, which does work not only with regulated substances, but also with international trade and China law, has seen an influx of clients complaining about counterfeit goods, and seeking our help in dealing with the problem. Ebay has long struggled to address the sale of counterfeit goods on its site, and now retailers like Amazon and Alibaba are facing the same challenges, perhaps to an even greater degree.

Amazon, for example, has a third-party marketplace that makes up more than 40 percent of its sales, and Chinese manufacturers are able to utilize this marketplace to reach consumers directly. We have a client whose Chinese manufacturer stole its product design and began selling knockoffs using our client’s brand name on Amazon. Amazon’s product catalogue is made up of around half a billion products, making counterfeit policing a monumental task for its legal and compliance teams. Counterfeit sellers that are shut down one week often simply open a new account with a new email address this next. It’s a vicious cycle.

As the cannabis industry grows, and as ancillary companies selling smokers’ accessories grow with it, counterfeit goods in this industry will only become more prevalent. We’ve already seen instances of counterfeit rolling papers, glassware, water pipes and vape pens, and these are surely not the only goods being counterfeited. As more states legalize recreational cannabis and as more companies build up their brand names and reputations, we have no doubt the issue of counterfeit cannabis products will also eventually become a pressing issue.

As a business owner, it is critical to take preventative steps to ward off counterfeiters, and to know what to do in the unfortunate event someone does counterfeit one of your goods. And as we tell all our clients: investing in these preventative steps now is always less expensive than fighting a legal battle in court down the road.

So what preventative steps should cannabis businesses take to address counterfeiting? Prevention hinges on first identifying your intellectual property (IP), determining what categories it falls into, and then protecting it accordingly in the relevant jurisdictions. The design of a novel device like a water pipe, for example, could be subject to patent protection. Though we’ve blogged extensively about the difficulty in obtaining federal cannabis trademarks, federal patent law does not contain the same “legal use in commerce” requirement, or a prohibition on “immoral or scandalous” matter. A patent is the grant of a property right to the inventor, issued by the United States Patent and Trademark Office (USPTO), and this property right gives the inventor “the right to exclude others from making, using, offering for sale, or selling the invention in the United States or importing the invention into the United States.” Patents are often the most powerful tool in fighting counterfeit goods.

Patent infringement is not the only way counterfeiters can rip off products. Oftentimes, when talking about counterfeits, we’re talking about trademark infringement rather than patent infringement. A counterfeiter could, for example, slap your logo on its vape pen, exploiting the goodwill and notoriety you’ve established through your brand. Of course, the best way to prevent trademark infringement is to register your trademark with the USPTO. Although it is not possible to obtain a federal trademark for use on goods that violate the Controlled Substances Act (CSA), it is often possible to obtain trademark protection for goods that do not violate the CSA, like many smokers’ accessories. A trademark gives the owner the exclusive right to use their mark on the specified goods in commerce, and it gives the owner a right to seek remedy in federal court in the event of infringement.

If you are having your products manufactured in China (or anywhere else overseas), as is the case these days with so many of our clients, you need to protect your IP there as well. Because if you don’t register your trademark or your design patent in China, someone else almost certainly will and then that someone else will be able to stop your products from leaving China because those products violate their intellectual property! For more on this, check out China: Do Just ONE Thing: Register Your Trademarks AND Your Design Patents, Part 1 and China: Do Just ONE Thing: Register Your Trademarks AND Your Design Patents, Part 2.

But logistically, how does enforcing your IP rights against counterfeiters play out? Typically, it doesn’t make sense to take the alleged infringer straight to court. Litigation is expensive, and there is often room to negotiate. When you know who the infringing party is, your attorney can contact them with a cease and desist letter directly. But when the party is, for example, a third party seller on a larger platform like Amazon, tracking down the infringer is much more difficult.

The protocol for dealing with an online retail platform in taking down counterfeit goods will vary depending on the company. With every large company we’ve worked with, however, the process is expedited greatly where the party alleging a counterfeit is able to offer up proof of their own IP rights. This is particularly true with trademarks, where infringement is often apparent, and the retail platform can quickly decide to suspend a counterfeiter’s account. Without verifiable IP rights, the retail platform is put in a difficult position of having to figure out who has the right to sell what. This involves complicated legal analysis, and takes substantial time and resources, as well as back-and-forth with both parties. In the meantime, you’re likely losing business.

So the lesson here is two-fold. First, make sure you’ve identified your intellectual property and that you’ve taken every step possible to register and protect it. Second, if you suspect a company is selling a counterfeit of your product, contact your attorney immediately and develop a strategy for blocking the counterfeit sales, whether through direct communication with the counterfeiter, or by working with the relevant online retail platform.

 

Cannabis business lawyersI had the opportunity last Friday to spend some time with officials from Jamaica’s Cannabis Licensing Authority. The University of Washington’s Cannabis Law & Policy Project and the Washington Office on Latin America put the event together so that Jamaica’s cannabis regulators could speak to a few experienced cannabis business and regulatory lawyers to get input on what does and doesn’t work in Washington, Oregon, California, and Colorado, and the various other states with some form of cannabis legalization. Our firm has participated in events like these before involving various countries, including the Canadian government, the French government, and with groups of Japanese, Spanish, German, Israeli and other investors. Though the main goal is to be helpful to these countries that are building out their own systems, we always tend to learn a few things, and this event was no different.

One challenge Jamaica’s regulators are trying to deal with is how to protect small domestic farmers. The goal of cannabis legalization, for Jamaica and for most other countries, is twofold — to avoid putting people in jail for possessing marijuana and to provide a new legal business avenue for its residents. But not all legalization is created equal, and countries that don’t take precautions can end up cutting out their less connected citizens. Most Jamaican farmers are not going to hire attorneys to fill out complicated license applications. So, if Jamaica’s system implements any type of paper-heavy up front filing requirements, it will be leaving out the people its regulators most want to protect. This isn’t about keeping foreigners away entirely, as foreign finance can be a good thing. But it is about crafting rules and licensing requirements to make them accessible to those in society you are trying to reach.

Another issue Jamaica faces that comes up consistently for small countries looking to legalize cannabis is the fallout of potentially violating treaty obligations. The United States and 184 other countries are signatories to the Single Convention on Narcotic Drugs of 1961, as amended. The Single Convention’s goal is to prohibit the production and supply of various drugs, including cannabis. Cannabis is listed on Schedule IV of the Single Convention — the most restrictive schedule set aside for drugs particularly prone to abuse and to produce ill effects, without an offset of therapeutic advantages. Even if cannabis were not listed on Schedule IV, Article 28 calls it outs specifically, requiring that any production of cannabis be completely controlled by the signatory’s government.

If you’ve never read the Single Convention before, its language can seem stilted and incomplete. This is what happens when a single document is supposed to be equally enforceable in 6 languages. But even with the odd language, the treaty is relatively clear that countries are supposed to keep cannabis illegal.

When the United States doesn’t comply with its treaty obligations, nothing much happens. The United States abides by international law because we want to and we want other countries to do the same, but the U.S. court system has consistently allowed the United States to avoid its treaty obligations by virtue of the treaty being non-self-executing: we need to pass additional domestic law to make it enforceable. Regarding the Single Convention, the United States contends that it still meets its treaty obligations regarding marijuana because it is still federally illegal, despite multiple states legalizing it.

But for Jamaica, and similarly-sized countries, the restrictions of international drug control treaties are vastly more important. Jamaica receives millions of dollars in foreign aid annually, and many foreign aid require Jamaica abide by its treaty obligations, including its obligations under the Single Convention. Any move by Jamaica to legalize cannabis in a way that is not at least arguably compliant with the Single Convention places this foreign aid at risk. This isn’t to say that Jamaica’s regulatory scheme doesn’t meet those obligations — it’s just that the stakes are higher for Jamaica than they are for us.

So, to add to the list of reforming U.S. banking laws, tax laws, and overall drug laws, we may want to do our small country friends a favor and revisit the Single Convention on Narcotics’s approach to marijuana. The United National General Assembly Special Sessions in April of this year had some people hoping for some progress, but nothing came of it, as they released a statement that didn’t even acknowledge cannabis legalization in various countries.

The struggle continues.

cannabis trademark lawyer

Next Monday in Orlando, Florida, Alison Malsbury, our lead cannabis IP attorney, will be speaking at the 2016 INTA Annual Meeting on cannabis trademark issues. Alison will be part of the Pharmaceutical Marijuana Law – Branding, Marketing and Regulatory Issues panel that will be introducing IP practitioners to federal and state cannabis laws, and will cover both domestic and international trademark issues unique to the industry. Registration for the event is open through the end of this week.

INTA is by far the leading association of international trademark lawyers and we could not be prouder of Alison for being selected to speak on cannabis IP at its annual event.

Alison will be delving into the issues trademark lawyers face when practicing in the cannabis industry, including the federal versus state law conflict, difficulties in obtaining federal trademark protection, a breakdown of the USPTO’s basis for refusing cannabis trademarks, state trademarks, and the complexities of trademark licensing deals.

The panel will be moderated by Lisa Martens, a partner in the Intellectual Property Practice Group at Sheppard Mullin. Fellow panelists also include Tamar Todd, Senior Director of the Office of Legal Affairs at Drug Policy Alliance, and Charles Gielen, an attorney with Amsterdam-based firm NautaDutilh and a professor in IP law at Groningen University.

We have written extensively on intellectual property law and branding issues in the cannabis industry, and a compilation of those articles can be found here.

The UN on cannabisI was in New York last week chairing a panel about investment in the cannabis industry for NYU’s Cannabis Science and Policy Summit (which I’ll blog about shortly). While I was there, the United Nations kicked off its first Special Session of the United Nations General Assembly (“UNGASS“) in two decades on worldwide drug policy reform. At the last UN special session on drugs in 1998, international leaders agreed to “work toward a ‘drug free world‘ by 2008.”The UN is well known for being no fan of cannabis legalization. It has openly criticized legalization in Washington and Colorado and its drug control policies are mostly centered on prohibition based on the. The 1961 Single Convention on Narcotic Drugs, the 1971 Convention on Psychotropic Substances, and the 1988 Convention Against Illicit Traffic in Narcotics mandate UN member states combat drug use and implement prohibition and criminalization.

The UNGASS agenda this year contained multiple round tables on myriad issues related to worldwide drug policy reform and, ultimately, reduction of harm. Unfortunately, the Special Session still supports prohibition of marijuana via a “drug plan” the Commission on Narcotic Drugs adopted in Vienna in 2014, which adoption takes the form of this “outcome document” adopted at this year’s UNGASS. Still, there was at least a bit of robust debate regarding cannabis and some even talked about the need for more sensible drug policies worldwide. Representatives from Jamaica asked the UN to specifically review marijuana’s illegal status and multiple other countries (including Mexico and Colombia) expressed their disappointment with the international community’s failure to acknowledge that the “war on drugs” in pretty much all countries has been a complete failure.

Jamaican Foreign Minister Kamina Johnson-Smith talked about how absurd it is to schedule cannabis as a dangerous drug with no medical uses:

Scheduling cannabis as a dangerous drug with no medical use — a status that dates back to the 1961 Single Convention on Narcotic Drugs — is outdated and out of touch. Johnson-Smith further stated that “[w]e contend that the classification of cannabis under the Single Convention is an anomaly and that the medical value of a substance must be determined by science and evidence-based analysis, above other considerations . . . .

Ultimately, the “outcome document” adopted at this UNGASS adhered to the UN’s existing conventions which only support hardline drug policies. This means that the UN will not be embracing cannabis legalization (for non-medical or non-scientific use) anytime soon (or at least not until 2019 when the next UNGASS is scheduled). As multiple countries continue to implement more progressive recreational cannabis law reform, the UN’s overall support for prohibition is going to continue to create political conflict and inconsistency across borders. As Richard Branson aptly puts it in his op-ed on UNGASS 2016:

The problem is that UNGASS is out of step with realities on the ground. As more and more national, state and municipal governments pursue progressive approaches – including regulation – the more they will show the inherent flaws of the international drug control regime. The risk is that the UN fails to adapt to changing priorities, realities and evidence and that the multilateral approach to controlling drugs collapses altogether. It may already be too late to save the broken and fragmented drug regime.

Though many Americans view the UN unfavorably and of little import, many smaller countries around the world view it with more respect. Our fear is that those countries will listen to and abide by the UN’s dictates on cannabis and slow down their own legalization programs. We will see.

Barcelona: a leader in architecture is now a leader in cannabis
Barcelona: a leader in architecture is now a leader in cannabis

This will be the first in what will be an irregularly scheduled series of posts on cannabis in foreign countries. We hardly need to tell you that both cannabis and cannabis legalization are not confined to the United States. We will through this series be showing you what other countries are doing, both because we view this as an interesting topic and because we all should be learning from each other. Eventually, as cannabis legalization dominoes continue falling around the world, there will come a day when cannabis will be exported and imported between countries no differently from other products.

When thinking about cannabis clubs and lounges, many of us instantly think of Amsterdam “coffee shops,” but there is another European country experimenting with cannabis clubs that is rapidly becoming a European cannabis center: Spain.

Spain, and Catalan (think Barcelona) in particular, has seen the number of its cannabis clubs grow exponentially by taking advantage of a legal loop-hole in the country’s ban on marijuana trafficking. Spanish law allows for private cultivation and consumption, including collective consumption. So what did entrepreneurial Catalonians do with this? They opened membership-only cannabis “associations” where marijuana is collectively consumed in private. There are now approximately 400 such “associations” in Catalan alone.

One of the most interesting aspects of the Spanish model is the distinctly non-commercial approach of its cannabis clubs, the official aim of which is to reduce the “negative effects of drug use.” Many of these cannabis clubs bring in medical doctors and other health care professionals to give medical advice to the club’s members.

Why are Spanish clubs run this way? Part of the reason lies in the legal requirement that clubs be run on a not for profit basis. Though nearly all of Spain’s cannabis clubs have membership fees to join, most use the membership funds for operating costs, with any additional revenue being reinvested into operations. Another reason for Spain having become a center for such cannabis associations is the legal loophole under which these clubs must operate: cultivation and consumption of marijuana is allowed in Spain, but trafficking of marijuana is still illegal. Thus, clubs must be careful to avoid taking any actions that might make its leaders or its members susceptible to arrest under Spain’s drug trafficking laws.

The Spanish approach is yet another phenomenon in the wave of cannabis legalization around the world and its successes or failures will no doubt serve as a useful case study for legalization efforts in the U.S. and around the world.

W have previously written about the devolution of anti-cannabis rhetoric, but the cannabis opposition recently took even us aback. Queue the Stoner Sloth, star of a video series portraying the “horrors” of marijuana use by teens. The Sloth muddles through various real life situations made markedly harder by being stoned. The campaign’s catchy tagline is “You’re Worse on Weed.” This ad campaign comes from Australia, where the possession and consumption of marijuana are prohibited.

The Stoner Sloth campaign has gained notoriety for all the wrong reasons. The headlines of the following articles illustrate how this campaign has been received:

The video series is so bad that it has become somewhat of a campy cult classic, with the Stoner Sloth having emerged as an ironic “anti-hero,” embraced by marijuana advocates as a welcome mascot. This is assuredly not what the Australian government officials had in mind when dreaming up the Stoner Sloth, but they always say there is no such thing as bad press.

The Australian ad campaign coincides with the result of a US study tracking marijuana use among teens. According to the Washington Post, federal data found no change in teenage cannabis use in nearly every US state compared to last year, though it did find a slight increase in teen use in Washington and Colorado, the states that recently fully legalized recreational marijuana. In Colorado, the numbers jumped from 11.2 percent in 2012-13 to 12.6 percent in 2013-14. In Washington, the monthly teen marijuana use rate rose from 9.8 percent to 10.1 percent.

Prominent legalization opponent Kevin Sabet of Smart Approaches to Marijuana points out that now Colorado leads the nation in monthly adolescent marijuana use, and he uses that fact to show the dangers of legalization. But, public health expert Jonathan Caulkins of Carnegie Mellon University counters that the latest numbers are not particularly suggestive one way or another and that these initial numbers are not suitable for judging the effect of legalization. Another study from American Law and Economics Review stated the following:

 Although policymakers and law enforcement officials argue that medical marijuana laws (MMLs) “send the wrong message” to young people, previous studies have produced no evidence of a causal relationship between MMLs and marijuana use among teens. . . . Our results are not consistent with the hypothesis that legalization of medical marijuana leads to increased marijuana use among teenagers.

The fight for marijuana legalization is winning the public opinion wars. According to a 2015 Gallup Poll, 58 percent of Americans favor the legalization of marijuana. This ties a high-point in favor of legalization since Gallup started tracking this data in 1969. Ad campaigns like the “Stoner Sloth” are the feeble gasps of a diminishing subset who still favor prohibiting cannabis. Here’s to hoping they remain so lame in their efforts.

Canada and Recreational MarijuanaWe have recently written blog posts on our Southern neighbor, Mexico (see Marijuana Legalization: Bad for the Cartels and Mexican Marijuana Laws: Change is Here/Coming) and with all that has been going on with Canada cannabis lately, we are going to start giving our Northern neighbor equal time. Like nearly every other country in the world, marijuana is federally illegal in Canada. See Canada’s Controlled Drugs and Substances Act. Nonetheless, Canadian law does make certain that Canadians can buy and possess marijuana for medical purposes. Unlike the United States, Canada’s medical marijuana laws and rules are governed by federal legislation, making them uniform and enforceable in all Canadian provinces.

Until two years ago, Canadian patients to be authorized to possess marijuana for medical purposes had to fall into one of two categories of illnesses and associated “debilitating symptoms.” Under newer regulations, Canada removed patient categories to allow medical marijuana to be used to treat any medical condition. In Canada today, its “Healthcare Practitioners” fill out a “Medical Document” for patients that serves as sufficient authorization for them to use medical marijuana. Patients authorized to use medical marijuana then send their Medical Documents to a licensed medical marijuana producer who registers them as “clients.” Canadian patients may then place orders for their medical marijuana with their producer who then mails their clients their medical marijuana.

Before 2013, if you wanted medical marijuana in Canada you either had to grow your own or you could go through Health Canada’s lone designated marijuana provider, Prairie Plant Systems. Then Canada enacted Marihuana for Medical Purposes Regulations (MMPR), which expanded access to marijuana for medical purposes:

Under the MMPR, individuals who have the support of their healthcare practitioner can access marijuana for medical purposes from licensed producers. Licensed producers must meet strict security and quality standards. The maximum amount that may be possessed by clients registered with a licensed producer is 30 times the daily amount indicated by their healthcare practitioner, to a maximum of 150 grams.

A current list of all producers registered with Health Canada can be found here. In addition to the MMPR requirements, Canada’s licensed cannabis producers must comply with all applicable provincial, territorial, and municipal legislation and regulations, including zoning restrictions. And Health Canada’s cannabis producer license application is notoriously difficult and expensive.

Until recently, Health Canada limited producers to selling only dried marijuana flower. That changed this past summer when Canada’s Supreme Court ruled that patients are entitled to more than just flower, given that some medical conditions make smoking both a health risk and a less effective medical treatment. Today, those producers who have obtained expanded production licenses from Health Canada are authorized to produce, but not yet sell, marijuana oil for patients. 

Though Canada’s federal law now allows for the production and wholesale distribution of marijuana for medical purposes, it has not legalized medical marijuana dispensaries. Patients in Canada still must get their cannabis from one of the limited number of producers, and then only through the mail.

Though compassion clubs and dispensaries remain illegal in Canada, they exist in large numbers. British Columbia alone has at least one hundred illegally operating dispensaries in the City of Vancouver; and federal enforcement against dispensaries has been spotty and inconsistent at best. In June of this year, the City of Vancouver became the first Canadian city to take control of the situation by approving a regulation-intensive, two-tier licensing system for dispensaries operating within its borders. Two months later, federal authorities sent the Vancouver City Council a letter explaining why the City should abandon this plan, but not threatening any legal action. In September, federal authorities sent cease and desist letters to 13 Vancouver-based dispensaries. The City has ignored federal government prohibitions and entreaties, and as of August was in the process of reviewing 176 license applicants.

A recent CBC survey shows that 56 percent of Canadians favor legalizing marijuana, with an additional 30 percent favoring eliminating criminal penalties for marijuana use. On top of this, Canada’s newly elected prime minister, Justin Trudeau, promises nationwide legalization and he has been working hard to secure federal legislation that will do exactly that since taking office earlier this month.

Our cannabis business lawyers already represent Canadian companies looking to profit from the U.S. cannabis industry, and vice-versa. As Canada and the U.S. both grow their cannabis industries, we expect these cross-border transactions will only increase.We see Canada becoming one of the leading cannabis countries within a year, and likely surpassing the U.S. with cannabis legal and policy reform. And within ten years, we see  Canada and the U.S. (and maybe Mexico and no doubt other countries as well) opening up their borders for trade in cannabis just as is done for virtually all other legal products.

That will be the day….

There has been a tidal shift in Mexico. The weight of political power and public opinion remains opposed to marijuana legalization there, but in a recent decision (the Amparo Case) the Mexican Supreme Court created an imperative for marijuana reform. Here’s why this case is so important for marijuana legalization in Mexico and around the world:

Mexican marijuana. Its time has come.
Mexican marijuana. Its time has come.

Imperative to Reform Marijuana Laws. First, though the ruling in the Amparo case technically applies only to its four plaintiffs, the decision essentially requires the Mexican government to reform its drug laws.

The decision granted relief to four individual plaintiffs from Mexico’s marijuana laws, giving them the right to grow and consume recreational marijuana. For now, that decision only applies to the four plaintiffs, all of whom are high ranking members of two advocacy groups which aim to combat organized crime in Mexico. It bears mentioning that plaintiffs brought this case in an effort to help take down organized crime, which makes roughly 35-40% of its annual $1.5 billion profits on the illegal marijuana market.

Regardless of the case’s limitations, the Mexican Supreme Court has the power to legalize recreational marijuana throughout the country in later cases if it so chooses. It used a similar process earlier this year to legalize gay marriage in Mexico. If the Mexican government fails to reform its drug laws, the Supreme Court is positioned to legalize marijuana throughout the country without the permission of either the president or the legislature. This means that if these branches of the Mexican government do not start implementing cannabis reform, we may be seeing full blown legalization from the Mexican Supreme Court before too long.

Recreational Marijuana as a Human Right. In this case, the Mexican Supreme Court ruled that recreational marijuana use is protected as a human right to develop one’s “personality”. The right to the development of personality is tied up in human dignity; it is essentially the belief that each human being has the innate right to make his or her own decisions. It is the fundamental belief behind American values of freedom and liberty, and it is the foundation of modern liberal democracies. Most importantly for the Amparo case, this human right is enshrined in Mexico’s Constitution:

The choice of a recreational or leisure activity is a decision that undoubtedly belongs to the sphere of personal autonomy protected by the Constitution. That choice may include, as in this case, the intake or consumption of substances that produce experiences that in some way “affect” the thoughts, emotions and / or feelings of the person. In this line, the decision to smoke marijuana can have different purposes, including “the relief of stress, the intensification of perceptions or include the desire for new personal and spiritual experiences.” So, being “mental experiences”, they are among the most personal and intimate that anyone can experience, so that the decision of an individual of senior age to “affect” his personality in this way for recreational or entertainment purposes is covered under for the right to free development of personality.”

When it comes to international marijuana legalization in democratic nations, this case could well prove critically important beyond just Mexico; it is precedent from the highest court in a major country stating that there is a human right to the recreationally use marijuana. It also creates a new argument for international treaty discussions, like the U.N. Special Session on Drugs next year. We’ve previously written about how international drug treaties restrict cannabis legalization, but most of the countries that are parties to these international drug treaties are also party to human rights treaties. If the recreational use of marijuana is a human right, those treaties are now in conflict, meaning something will eventually need to be done to reconcile them.

This case is also important for the simple reason that the Court actually rationally analyzed the country’s marijuana laws. The Court points out that drug laws are usually judged solely upon whether they reduce consumption, but that they should be looked at more holistically with an eye towards protection of the public:

This Supreme Court finds that the prohibitory rules cannot be considered unconstitutional simply for being ineffective in motivating the behavior of people. The reduction in consumption can not be considered an end in itself of the measure itself, but in any case a state of affairs which is a means or an intermediate in order to achieve a further purpose, such as the protection of public health or public order.

The Court then notes that scientific evidence does not show that marijuana use in adults poses a significant risk to health except when used chronically and excessively. It also notes that claims of marijuana being a gateway drug have been debunked. The Court goes on to point out that Mexico’s current marijuana prohibition has done little if anything to reduce marijuana use and trade. Marijuana remains ubiquitous, use has actually increased since prohibition, and, in the meantime, murderous and lawless drug cartels are reaping the profits from the black market. The Court also compared Mexico’s cannabis laws to reasonable, better alternatives, such as its laws for tobacco and alcohol and, not surprisingly, found Mexico’s cannabis laws to be lacking.

As attorneys, we are heartened by the Mexican Supreme Court’s logical conclusions. As lawyers we are trained to compare like with like and when one looks at how alcohol and cigarettes, and even Diet Coke, are treated by our legal system, it is difficult from a legal perspective to understand why cannabis is the outlier. And Mexico’s Supreme Court agrees.

Cultivating or consuming marijuana remain illegal in Mexico, but with this Mexican Supreme Court decision the tides have finally begun to turn. Don’t be surprised if we hear more news out of Mexico on marijuana law reform in the near future.