How Canada’s Legalization of Cannabis Is Impacting the Industry

This past year, Canada became the second nation in the world to legalize the recreational use of cannabis. Receiving royal assent on June 21, 2018, Bill C-45, or the Cannabis Act, removed cannabis from the Controlled Drugs and Substances Act and strengthened the punishment for those found guilty supplying cannabis to minors or driving impaired.The federal Cannabis Act not only signifies a shift in the country’s legal, cultural and economic makeup, it also presents a host of emerging public policy issues. The Cannabis Act is a comprehensive legislative scheme that attempts to deal with such public policy issues by delegating decision-making power and enforcement responsibilities between federal, provincial and territorial governments.Of particular interest to AED’s Canadian dealer members is how these new regulations can and will shape the workplace. Canadian employers in general face new questions about what is allowed and what can be enforced. But the construction equipment distribution industry faces the added challenge of having many safety-sensitive positions that require the utmost mental clarity and focus.

The Legalization Process


Canada has taken a progressive policy stance toward cannabis since the early 2000s and was the first country to permit medical use. In 2000, the Ontario Court of Appeals decision Regina v. Parker confirmed the right of an individual to use cannabis for medical purposes. The court found that Canada’s Narcotic Control Act violated Canada’s Charter of Rights and Freedoms by forcing a Toronto-area epilepsy sufferer to choose between his medicinal cannabis and his freedom.


In response to Regina v. Parker, the federal government implemented their very first program for medical cannabis access, the Marijuana Medical Access Regulations, or MMAR. Under the MMAR program, patients were permitted to grow their own plants at home, designate someone to grow their plants, or buy medical cannabis through Health Canada.


Health Canada overturned the MMAR and instated the Marijuana for Medical Purposes Regulations (MMPR). Under the MMPR, licensed producers became the only source for legal medical cannabis, and medical users were prohibited from growing their own medicine. Days before the transition to the MMPR, the federal court delivered their opinion in Allard v. Her Majesty the Queen, which reversed the ban on patient cultivation. The court found that Allard, and all registered patients under the former MMAR system, would be allowed to continue to grow their own medicine.


Canada’s cannabis policies took a historic shift toward legalization when Trudeau launched his campaign for prime minister. Toward the beginning of his campaign he made the announcement that “the Liberal Party is committed to legalizing and regulating marijuana … We are going to get started on that right away.” He also commented that legalizing marijuana would fix the “failed system” and help to “remove the criminal element” that was linked to cannabis.

June 2016 

Nanos Research published a study which showed that seven out of 10 Canadians were in favor of legalization.

April 2017 

Justice Minister Jody Wilson-Raybould, alongside then-Health Minister Jane Philpott, Public Safety Minister Ralph Goodale, National Revenue Minister Diane Lebouthillier, and Parliamentary Secretary Bill Blair, introduced Bill C-45, the Cannabis Act.

June 2018 

The Cannabis Act passed in the Senate of Canada on June 7, 2018, and the House accepted some Senate amendments and sent the bill back to the Senate on June 18, 2018. The Senate then passed the final version of the bill on June 19, 2018. Trudeau announced, “It’s been too easy for our kids to get marijuana – and for criminals to reap the profits. Today, we change that.”

Functions of the Cannabis Act

The ultimate purpose of the Cannabis Act is to protect public health and public safety. Specifically, the act aims to do the following: protect the health of young persons by restricting their access to cannabis; reduce illicit activities in relation to cannabis; reduce the burden on the criminal justice system in relation to cannabis; provide access to a quality-controlled supply of cannabis; and enhance public awareness of the health risks associated with cannabis use.

The act, subject to provincial or territorial restrictions, permits those aged 18 years or older to legally

  • possess up to 30 grams of legal dried cannabis, or equivalent in non-dried form, in public
  • share up to 30 grams of legal cannabis with other adults
  • buy dried or fresh cannabis and cannabis oil from a provincially licensed retailer
  • purchase cannabis online from federally licensed producers in provinces and territories without a regulated framework
  • grow, from licensed seed or seedlings, up to four cannabis plants per residence for personal use
  • make cannabis products, such as food and drinks, at home as long as organic solvents are not used to create concentrated products

The Cannabis Act takes several measures to prevent youth from accessing cannabis, including implementing age restrictions and restricting promotion and enticement of cannabis. The latter measure prohibits products that are appealing to youth; packaging or labeling cannabis in a way that makes it appealing to youth; selling cannabis through self-service displays or vending machines; and promoting cannabis, except in narrow circumstances where young people cannot see the promotion. Penalties for violating these prohibitions are severe and could result in a fine of up to $5 million or three years in jail.

Federal, provincial and territorial governments will share responsibility for overseeing the cannabis regulation system.

The federal government’s responsibilities:

  • set strict requirements for producers who grow and manufacture cannabis
  • set industry-wide rules and standards, including the following:
    • types of cannabis products available for sale
    • packaging and labeling requirements for products
    • standardized serving sizes and potency
    • prohibitions on the use of certain ingredients
    • good production practices
    • tracking requirements of cannabis from seed to sale to keep it out of the illegal market
    • restrictions on promotional activities

Provinces and territories are responsible for developing, implementing, maintaining and enforcing systems to oversee the distribution and sale of cannabis. They are also able to add their own safety measures, such as the following:

  • increasing the minimum age in their province or territory (but not lowering it)
  • lowering the personal possession limit in their jurisdiction
  • creating additional rules for growing cannabis at home, such as lowering the number of plants per residence
  • restricting where adults can consume cannabis, such as in public or in vehicles

What Legalization Means for the Heavy Equipment Distribution Sector

Canadian employers are left wondering what legalization will mean for the workplace. How will employment standards evolve as a result of legalization of marijuana? How will employers be able to test and screen for cannabis among employees? How will employers be able to enforce safety standards? Such questions have been raised by organizations that have expressed concerns about the future of workplace safety and marijuana.

Government officials, labor groups, trade groups and employers have all called for new federal labor rules on drug and alcohol testing, as there are no such federal rules outside of the military. One member of a key body tasked with helping the federal government decide whether and how to impose marijuana testing for workers commented, “It is the government of Canada that has chosen to legalize marijuana – we have no moral judgment one way or the other on that – but we do think that incumbent upon the government is to follow that bill with a parallel bill that gets to the issue of workplace safety.”

Despite calls for clearer guidelines on cannabis use in the workplace, the federal government did not update the Canada Labour Code as a result of the Cannabis Act’s implementation. Thus, it is currently up to the individual workplaces and employers to update impairment policies and hazard prevention programs. Such a piecemeal approach will surely be tested in Canada’s courts. While this may not be the most cost-effective or consistent way to create laws and guidelines, perhaps the court, acting as fact-finder, will be able to guide future legislatures to intuitive regulatory workplace schemes.

Inadequacies in cannabis use testing methods present challenges to employers and lawmakers alike. Unlike alcohol, there is no clear line about what constitutes marijuana impairment. Urine tests are the traditional way to evaluate impairment, but this is not the most reliable measurement, as THC can remain in your system for months after use. THC remains in the blood for a few hours after smoking, but blood tests are not accurate for detecting the degree of impairment.

Alternative approaches to preventing cannabis impairment in the workplace are not as definitive as other testing methods, but they are much less controversial. Managers and supervisors can be trained to recognize behavioral signs associated with impairment. Some companies have started using performance tests to directly assess psychomotor performance. Furthermore, having a robust employee assistance program can help employees get treatment for substance abuse problems before they affect work performance.

Employers have voiced to lawmakers the need for different testing requirements depending on a person’s job functions. Many in construction equipment distribution know of certain “safety-sensitive” positions in their organizations that will require heightened safety precautions. Equipment operators, for one, pose significant risk to people and property – a risk that nobody wishes to magnify as the result of use of any kind.

Some industry groups are calling for rules that would allow for blanket bans on cannabis use for such safety-sensitive positions, as they believe use of cannabis on or off the clock could affect job performance. Of course, not all positions will require such strict requirements. Testing a cashier for cannabis use the same way you would test a pilot would be costly and ineffective. But as a result of the Cannabis Act, employers must now consider the individual’s right to consume cannabis recreationally when performing job safety calculus.

Industry groups from across the country attempted to convince the federal government prior to passing their own legislation to include an amendment which would have allowed for random testing on federal job sites. Unfortunately, the amendment never saw the light of day and the issue was passed to the provinces, which are still dealing with changes even after legalization took place on October 17, 2018. For example, many police forces across the country have not been properly equipped to detect THC levels, either because of a lack of training or because they don’t possess the necessary devices to detect cannabis use. Police in Ottawa, for example, have stated that they will be using more traditional methods of detection, rather than purchasing the one Breathalyzer device that was certified by the federal government.

AED Government Affairs 

AED members need to make sure that their drug and alcohol policies are properly updated, because if they ever face the issue of an employee under the influence, they need the proper tools to be able to deal with case. The rules should be very similar to what is established for alcohol, though, especially in industries where safety is paramount. Employers will also need to deal with cultural shifts within their workforce, as employees might openly speak about cannabis use just like they do about going to a bar on a Saturday night. It will certainly take time for legalized cannabis to become normalized in Canadian society; however, it could happen in the near future. Only time will tell how safety concerns are dealt with and how the legalization impacts workplaces.

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