Canada: Transporting Cannabis Within Canada As A Common Carrier

With the legalization of cannabis in Canada, and the growing industry resulting from the recent expansion of products containing cannabis that can now be legally sold (e.g. edibles and topicals) discussions regarding the circumstances under which these regulated products can be transported have become more prevalent. This article provides an overview of the prohibitions and restrictions governing the transportation of cannabis in Canada.

Cannabis in Canada

In Canada, the various parts of a cannabis plant are regulated under three different categories (i) cannabis (including CBD products), (ii) industrial hemp, and (iii) unregulated component plant parts.¹ The category and level of regulation depends on the actual plant part and the concentration of phytocannabinoids (e.g. THC or CBD) – a technical analysis is required in order to make this determination.

The cannabis regime is regulated and administered by Health Canada under the Cannabis Act (the "Federal Act"). The provinces also regulate certain parts of the framework. The Federal regime deems what products are considered "cannabis" and what can be legally sold. It also sets out good manufacturing procedures with which cannabis licensees must comply, including with respect to edibles and food ingredients, what security measures must be met, how you can advertise and market products, the very limited circumstances when the products can be imported or exported, and finally, it also governs the medicinal cannabis regime. The provinces each have the authority to set out the rules and procedures related to distribution and sale in that province, and what the age of majority will be for that province, provided that it meets the minimum set out by the Federal Act (18 years of age).

Transportation of Cannabis in Canada

Generally, possessing cannabis is prohibited under the Federal regime unless authorized by the Federal Act. The regulations under the Federal Act allow the holders of certain federal licences with authorization to sell to also distribute certain cannabis products to other federal licensees, to provincial/territorial licensees or boards, and, in the case of medical cannabis, to consumers, irrespective of where they are located. The Federal Act defines "distribute" to include "transporting, sending, and delivering".

The Federal Regime

The Federal Act authorizes a person under a contract with a federal or provincial licensee or government authority to transport cannabis if they do so in the performance of their contract and in a manner that is consistent with the authorization that they received from the federal or provincial licensee.² Accordingly, carriers may transport cannabis in Canada, provided that: (i) they are doing so under contractual authorization from a federal or provincial licensee/authority; and (ii) the cannabis is being shipped in accordance with the licence terms.³ The carrier should consider requesting confirmation or evidence from the licensee that its licence does not contain any restrictions in connection with transportation.

If a carrier were to limit its transportation of recreational cannabis operations to business to business shipments on behalf of a federal licensee only, it would be exempt from the application of several key requirements arising under provincial law. For example: provincial licensing and permitting regulations,⁴ prohibitions on possession,⁵ prohibitions and restriction on transportation,⁶ limitations on quantity that persons may have in their possession⁷ and restrictions on importation of cannabis into a province or territory.⁸ Note that there are still other provincial laws that would apply to interprovincial transport or business to business shipments on behalf of federal licensees, such as those governing packaging and location of cannabis on board the vehicle, those providing for inspection of vehicles, inspection of premises, vehicles and records, and those prohibiting transport of illicit cannabis.⁹ If a carrier does not limit its operations and decides to provide transportation services between provincial licensees or boards and retailers or consumers, they will be required to comply with the applicable provincial legislation as well. In addition, the transportation of cannabis for medical purposes has additional rules, for example, the requirement to obtain a signature of an adult when delivering to an individual consumer.

Under the Federal Act and regulations, carriers do not need a specific licence to transport cannabis but they must be operating under contract with a licensee or provincial authority, as noted above. This contract should be in writing and carriers should be familiar with any restrictions on their customer's licence that relate to transportation. If subcontracted, carriers should also ensure that the principal is consenting to the subcontracting in writing. The licensee is responsible for the safekeeping of cannabis while it is in carriage and to ensure that it is delivered in accordance with the licence.¹⁰ It must also comply with the packaging and labelling requirements for the applicable type of cannabis.¹¹ Packages must be unopened during transport and inaccessible to the driver of the vehicle while in motion.¹² Drivers should consider carrying documentation on board to show their authority to transport the cannabis but there is no clear guidance about what evidence would suffice. Ideally, the documents on board should include bills of lading which clearly identify the licensee as shipper¹³ and a copy of the contract between the licensee and the carrier, or some form of acknowledgement of the existence of that contract, signed by the licensee.

Provincial/Territorial Rules

The provinces and territories each have their own set of rules that apply to the transportation, distribution and importation of cannabis into the province, which apply within that province or territory. While the Federal Act still applies to licensees and carriers, there are some common provisions and restrictions that apply to licensees and carriers across the provinces as well. For example, British Columbia allows cannabis to be distributed outside of the province to a person as long as such person is authorized under the Federal Act to receive it. Cannabis can be transported through Quebec to other jurisdictions in Canada, but only if the shipment is accompanied by a bill of lading evidencing origin and destination points outside of the province. Some jurisdictions, such as British Columbia, Ontario, Prince Edward Island and Nunavut, will allow transportation of cannabis where it is being delivered to or by the government, a government agent, or a licensee. Prince Edward Island requires that cannabis be transported under the authority of a valid purchase order, bill of lading or other shipping document issued by a licensee and transported in an unopened package.¹⁴ British Columbia,¹⁵ New Brunswick¹⁶ and Saskatchewan¹⁷ have requirements for the packaging and handling of the cannabis during transportation. These are just some examples of rules at a provincial/territorial level. Carriers should be aware of the rules that apply in the jurisdictions in and through which it travels, if its activities are not limited to governance by the Federal Act only.

Final Considerations

If a carrier is interested in transporting cannabis in Canada, it needs to consider on whose behalf it will be transporting the product and who the consignee is in each case. These two considerations will dictate whether the carrier is mostly subject to the Federal Act and only some provincial legislation that governs the transportation of cannabis, or whether the carrier also needs to pay particular attention to additional rules and regulations in each province in or through which it carries the product.

Footnotes

1. Cannabis Act, SC 2018, c. 16

2. Supra note 1, s. 71(3) and 72(3).

3. Ibid.

4. The Cannabis Control (Saskatchewan Regulations), RRS c. C-2.111 Reg 1 ("SK Regs."), s. 2-1(a); The Liquor, Gaming and Cannabis Control Act, C.C.S.M. c. L153 ("MB Act"), s. 101.2(2); Cannabis Regulation Act, CQLR c C-5.3 ("QC Act"), ss. 23 and 24; Cannabis Control Act, SNB 2018, c 2 ("NB Act"), ss. 3(2)(c) and (d); Cannabis Control Act, SNS 2018, c 3 ("NS Act"), ss. 5(1)(d) and (f); Cannabis Control Act, RSPEI 1988, c C-1.2 ("PE Act"), s. 2(1)(c); Cannabis Control Act, SNL 2018, c C-4.1 ("NL Act"), s. 4(3); Cannabis Act, SNL 2018, c 7 ("NU Act"), s. 4(1).

5. Cannabis Control and Licensing Act, SBC 2018, c. 29 ("BC Act"), s. 14(d); Gaming Liquor and Cannabis Act, RSA 2000, c.G-1 (the "AB Act"), s. 90.08(1); The Cannabis Control (Saskatchewan) Act, S.S. 2018, c. C-2.111 ("SK Act"), s. 2-8(b).

6. BC Act, s. 17(d); AB Act, s. 90.08(1); SK Act, ss. 2-10, 2-11 and 3-6; Cannabis Control Act, 2017, S.O. 2017, c. 26 ("ON Act"), s. 5(3); O.Reg. 30/18 – General ("ON Reg."), ss. 1(1).1, 1(1).3, and 1(1).4; QC Act, ss. 23 and 24; NL Act, s. 77(2); Cannabis Products Act, S.N.W.T 2018, c.6. ("NT Act"), s. 7.

7. BC Act, s. 51(f); SK Act, s. 2-13(1)(a); NL Act, s. 77(3).

8. NL Act, s. 77(3); Cannabis Control and Regulation Act, SY 2018, c 4 ("YK Act"), s. 52.

9. BC Act, ss. 82, 89; AB Act, ss. 90.25(2), 103(1)(e) and 104; SK Act, ss. 1-3 and 3-15; ON Act, ss. 12(2) and 12(3); PE Act, ss. 15(3) and 21(1); NT Act, ss. 8 and 48(1).

10. See, e.g.: Cannabis Regulations, SOR/2018-144 (the "Federal Regs"), ss. 28(1)(a), 210.

11. Federal Regs, s. 206.

12. Federal Act, s. 85(1) and (2); AB Act, s. 104(b); QC Act, s. 80; NWT Act, ss. 40(1) and (2).

13. Federal Regs., s. 48.

14. PE Act, s. 15(3).

15. BC Act, s. 82.

16. NB Act, ss. 7 (3)-(4).

17. SK Act., s. 2-13.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.