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Focus: Lawyers navigating complex world of new marijuana regulations

Medical marijuana
|Written By Michael McKiernan

Kirk Tousaw has always been a thorn in the side of authority when it comes to the laws surrounding marijuana.

Kirk Tousaw has seen the regulatory side of his marijuana-related practice grow significantly in recent years.

His interest in the legal position of the drug dates back a long time. As a 15-year-old, he was busted for possession in his home state of Michigan.

“I thought it was completely unjust,” says Tousaw.

Soon after, a visit to his high school from the state governor provided the perfect vehicle for Tousaw to take his protest to the highest levels of the Michigan establishment.

“The night before the visit, we had used my friend’s dot-matrix printer to produce this big banner. Then we broke in before school and hung it up in the hallway,” says Tousaw, who also demonstrated some developing tactical skills during the operation.

“We didn’t want to hang it up in the gym because we figured someone would see it there and tear it down before anyone arrived.”

According to school legend, the ploy worked with Michigan’s then-governor Bill Milliken, a man famous for signing the state’s notoriously harsh mandatory minimum drug sentencing law, welcomed by a sign that read: “Legalize Marijuana Now!”

“The principal was not pleased,” says Tousaw.

These days, the targets are much the same. Instead of tussling with the government of Michigan, Tousaw’s chief adversary today is the federal government of Canada, where he now makes his home. The venue for the fight has changed, though, migrating from high school hallways to courtrooms across the country, including the highest one in the land.

Earlier this year, Tousaw, the principal of Duncan, B.C.-based Tousaw Law Corp., appeared at the Supreme Court of Canada, acting as counsel to Owen Edward Smith, a producer of edible and topical forms of medical marijuana. Since the medical marijuana access regulations that governed the medical use of the drug limited possession to dried marijuana, Smith found himself arrested and charged with possession and trafficking of cannabis.

“We think it’s inappropriate to force someone to smoke dried marijuana when eating it or applying it topically could provide better relief with fewer side effects for some people,” says Tousaw.

In 2012, a B.C. Supreme Court judge acquitted Smith and ruled the restriction to dried forms of marijuana breached s. 7 of the Charter of Rights and Freedoms. The province’s appeal court upheld the decision in 2014 and last month, a unanimous seven-judge panel of the Supreme Court of Canada agreed, finding “no connection” between the restrictions and the health and safety of medical marijuana patients.

“It is therefore difficult to understand why allowing patients to transform dried marihuana into baking oil would put them at greater risk than permitting them to smoke or vaporize dried marihuana. Moreover, the Crown provided no evidence to suggest that it would.

In fact, as noted above, some of the materials filed by the Crown mention oral ingestion of cannabis as a viable alternative to smoking marihuana,” the court wrote in its June 11 decision.

“Finally, the evidence established no connection between the impugned restriction and attempts to curb the diversion of marihuana into the illegal

market.

We are left with a total disconnect between the limit on liberty and security of the person imposed by the prohibition and its object. This renders it arbitrary.”

The edibles case was just one in a series of Charter challenges brought by Tousaw on behalf of clients. After moving to Vancouver in 2002, a year after the federal government unveiled the regulations, Tousaw worked with marijuana activist Marc Emery and John Conroy, a lawyer also involved in the medical marijuana issue.

“We argued several times that the regime was arbitrarily restrictive,” says Tousaw, who estimates this kind of strategic litigation currently makes up about a third of his practice.

The rest of his practice involves defence work for people charged criminally with marijuana-related offences and regulatory activities on behalf of dispensaries and producers of marijuana.

According to Tousaw, the regulatory side of the practice has ballooned in recent years after the federal government replaced the old regulations with a new regime.

“They’ve sanctioned larger operations but they’ve taken away the rights of patients to grow their own, so they’ve gone too far in the other direction,” says Tousaw.

In addition, just last month Vancouver’s city council approved its own bylaw to regulate the city’s booming medical marijuana retail market. About 100 dispensaries are currently in business throughout the city.

“Three or four years ago, the dispensaries were all coming to me because they had been busted by the police,” says Tousaw.

“Now I can offer them a wider range of services to assist them with more day-to-day issues arising from their business.”

Hugo Alves, a corporate and commercial partner at Bennett Jones LLP in Toronto, spotted an opportunity when the new regulations arrived in 2013.

“When the old regime was put in place, there was some legal work around but not the type a large law firm would do because they were trying to regulate the patients,” he says.

“When the new ones came out, I thought this will create an industry because they were shifting to regulate the dispensaries and producers. Those types of companies are going to require capital. They’ll need picks and shovels in the ground and a number of other businesses around them.”

Alves says he saw the same thing happen before in working with clients operating in new markets effectively created by government regulation. A similar scenario emerged, for example, after the signing of the Kyoto protocol when the international climate change treaty created an emissions trading market and again closer to home when Ontario’s Green Energy Act spurred the development of a renewable energy market in the province.

Working with associate Michael Lickver, Alves began building a plan to involve the firm in the fledgling industry. In fact, he represented one of the first applicants for a production licence from Health Canada under the new regime.

“We mapped out how we thought the industry would look. We view it as a nucleus comprised of the producers, the distributors, and the consumers. Out from there, you have a lot of different service providers: medical clinics, technology providers, security consultants, and so on. We’ve made a conscious effort to have clients in every one of those sectors because each one views the industry through a different lens,” says Alves.

According to Alves, his firm has been very supportive of the venture.

“It’s a law firm that is hugely entrepreneurial, so they like to see partners and associates who want to do something creative and build a new line of

business,” he says.

Alves says the groundwork he and Lickver have already put in place will also leave them in a strong position in the event the government ever legalizes recreational use of cannabis, a change Liberal Party Leader Justin Trudeau has been promising to make.

“I think if the regulations are expanded to allow for consumption by adults other than those with a medical need, the platform for distribution and production will likely remain the same,” says Alves.

“The underlying policy objectives of protecting public health and safety and avoiding diversion into the criminal market, those things won’t change,” says Alves.

It’s not just in advisory roles that lawyers have sensed a business opportunity in the marijuana sector.

Maxim Zavet has taken a sabbatical from his practice at Toronto firm Levy Zavet PC to focus on his role as chief executive officer of KindCann, a medical marijuana company he cofounded that’s in the final stages of licensing with Heath Canada.

“The licensing process has been a big challenge,” says Zavet.

“There’s no manual on how to put an application together and it’s a very slow process. I think there are two or three former lawyers involved in companies.

It’s a field lawyers sink their teeth into because the regulatory compliance takes some knowledge to get through.”


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