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The Cannabis Act: A gift to lawyers that will keep on giving

Tuesday, October 16, 2018 @ 8:54 AM | By Joe Hoffer

Joe Hoffer %>
Joe Hoffer
For lawyers, the Cannabis Act has meant a substantial increase in demand for legal advice, particularly in the areas of real estate and human rights law. The Cannabis Act has left significant regulatory gaps which have been left to the provinces and municipalities for further regulation. The challenge for lawyers is to assist clients to successfully navigate through the regulatory gaps and avoid the destructive consequences of litigation at the court or tribunal levels.

The principal features of the Act are its “legalization” of cannabis smoking and cannabis cultivation, and to date this has been the focus of client inquiries. The focus of this article is the substantial volume of legal work that will continue to be required in the context of condominium, residential tenancies and commercial tenancies law.

The Cannabis Act itself is federal legislation that is permissive with respect to cannabis use and cultivation and is silent on the question of whether parties can use contract or delegated statutory powers to regulate in these areas. Most provinces have engaged in various degrees of regulation. However, apart from permitting smoking cannabis in all locations where cigarette smoking is permitted and increasing the minimum cultivation and smoking age to 19, Ontario’s focus has been on setting up its online retail and taxing operation.

Municipalities in Ontario, for the most part, are deferring legislative responses to the Cannabis Act pending the outcome of local elections and reacting to local needs that emerge after problems are identified. The net result is that lawyers have been asked to provide advice relative to the regulation of cannabis use and cultivation in private multi-res housing and commercial leased settings.

In the condominium context, condo boards have been quick to introduce rules and bylaws which prohibit smoking and cultivation of cannabis, subject to “accommodation” of human rights requirements which may need to be satisfied in individual cases. Similarly, in residential and commercial tenancies, lease amendments have been implemented to prohibit smoking and cultivation of cannabis.

The need for regulation in condo and leasehold housing settings arises from two areas of concern. First, the odours and fire risks generated from cannabis and cigarette smoke result in nuisance and health and safety complaints from neighbouring unit owners and tenants which condo boards and landlords are legally required to address. Second, with cannabis cultivation there are additional risks and liability relative to property damage, environmental damage and resident health and safety concerns.

As a result of the regulatory gaps in these areas, lawyers specializing in condo legislation and residential/commercial tenancies law have been busy for several months now drafting contractual restrictions on cannabis smoking and cultivation. Defending those restrictions is expected to generate substantial litigation in court for condo and commercial tenancies; at the Landlord and Tenant Board for residential tenancies; and at the Human Rights Tribunal for all areas of housing law where a resident/tenant alleges that the restrictions are “discriminatory.”

Most lawyers have provided for human rights exceptions from statutory and contractual restrictions on in-unit smoking and cultivation, but each time a human rights issue arises a fact-driven analysis of “accommodation” is required by the party imposing the restriction and this typically will engage further demands for legal advice.

For example, under the Cannabis Act and regulations, a cannabis prescription recipient who is a condo unit owner or a residential tenant may register to grow up to a maximum number of plants in their “ordinary place of residence” with no requirement for consent of the condo board or landlord.

The number of plants is based on a formula applied to the prescription and we have seen registration certificates issued by Health Canada which permit, in one case 49 plants, and in another, 54 plants which may be grown in a small apartment in a multi-residential setting. It is in this context that multi-res landlords and condo corporations have been obliged to create and enforce contractual restrictions on cultivation which has been met with resident pushback based on “human rights” and discrimination.

The legal conflict, particularly in multi-res housing situations, is between the “human rights” of a person who feels they have a “right” to grow dozens of plants and the rights of a landlord to meet its legal duty of care to other residents and its property. We have seen substantial physical damage caused to a rental unit where dozens of plants are cultivated under the auspices of a registration certificate. The grow-op in question occupied space in both the living room and a bedroom of an apartment with “tents” set up in each room; duct work to facilitate air movement within and outside the tented environment; a shelf of pesticides and fertilizers to encourage healthy plant growth; and, lighting and electrical appliances used to generate heat, humidity and lighting.

In cases where a property standards officer has inspected such operations, the landlord has been ordered to pay to have a professional environmental assessment completed and to pay for any remedial work recommended by the report, as well as paying for the reinspection following remediation. In addition, if fire or mould result from the cannabis operation, the landlord is liable to defend lawsuits from neighbouring tenants alleging the landlord is in breach of its “duty of care” for failing to ensure the health and safety of residents of the building.

Ultimately, in a human rights context, the rights of the tenant seeking to grow cannabis in the apartment must be weighed against the rights of other affected parties to determine whether accommodation would amount to “undue hardship,” and those are matters that may ultimately be resolved on a case by case basis at the Human Rights Tribunal.

In summary, lawyers whose practices involve housing and leasing law have already seen, and should continue to see for years to come, a sharp uptick in demand for their legal services as Ontario experiences the results of proclamation of the Cannabis Act and related provincial and municipal legislation combined with a lack of legislation to fully regulate smoking and cultivation in multi-res and commercial settings.
Joe Hoffer is a partner with Cohen Highley LLP who specializes in residential tenancies law.

Photo credit / mrhighsky ISTOCKPHOTO.COM

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