What you need to know about the law to make the most of cannabis - - PowerPoint PPT Presentation

What you need to know about the law to make the most of cannabis legalization for your community

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

Cannabis Legalization Regime First Nation’s Control: Law Making Powers Options and Risks

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

PRODUCTION DISTRIBUTION CONSUMPTION

PRODUCTION (CULTIVATION/PROCESSING) DISTRIBUTION CONSUMPTION

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

Security Licence Personnel Tracking Size

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

Privatization Wholesale Licence Online

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

DIRECT SUPPLY PROHIBITION ONLINE SALES TIED-HOUSE RULES LOUNGES

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

(No Delivery)

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

No agreements, inducements, exclusivity, relationships

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

• Inability to obtain

licence

• Seizure and destruction
• Prosecution
• Fines and imprisonment

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

Heads of Powers

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

• Law Making authority and responsibility in Canada is divided up between the

federal and provincial governments pursuant to section 91 and 92 of the Constitution Act, 1867

• Under section 91 of the Constitution Act, 1867, the federal government has the

exclusive jurisdiction over matters of national interest including:

• Regulation of Trade/Commerce
• Direct/Indirect taxation
• Criminal law
• “Indians, and Lands Reserve for Indians”

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

• Under section 92 of the Constitution Act, 1867, provincial governments have

exclusive jurisdiction over provincial matters, including:

• Direct taxation in the province
• Property and civil rights in the province
• Administration of justice in the province
• Generally, all matters of a local or private nature in the province

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

• Indian Act By-laws
• Land Code Laws
• Inherent Rights

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

health nuisance zoning construction water supplies business licensing environmental protection trespass taxation prohibition

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

• The Indian Act is a federal law passed pursuant to section 91(24) of the Constitution

Act, 1867 (“Indians, and Lands Reserved for the Indians”)

• Pursuant to section 81 of the Indian Act, bands “may make bylaws not inconsistent

with [the] Act or any regulation made by the Governor in Council or the Minister”, including in relation to:

• Providing for the health of residents on reserve
• The observance of law and order
• The prevention of disorderly conduct and nuisances
• The dividing of the reserve into zones and the carrying on of any class of business, trade
• r calling in any such zone
• The regulation or the conduct and activities of hawkers, peddlers or others who enter the

reserve to buy, sell or otherwise deal in wares or merchandise

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

• Subject to Minister approval, section 83 of the Indian Act provides bylaw making

powers relating to:

• Taxation for local purposes of land or interests in land, including rights to occupy, possess
• r use the land in the reserve
• Licensing of businesses
• Subject to assent by a majority of the electors of the band who voted at a special

meeting of the band called for the purpose of considering the bylaw, section 85 provides bylaw making powers relating to “prohibiting the sale, barter, supply or manufacture of intoxicants on the reserve”

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

leasing licensing development zoning environmental service use

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

• The First Nations Land Management Act provides powers for First Nations under a

Land code to enact laws in relation to the development, conservation, protection, management, use and possession of reserve lands.

• Section 37 of the FNLMA provides that in event of any inconsistency or conflict

between the FNLMA and any other federal law, the FNLMA prevails to the extent of the inconsistency or conflict.

• This option is only available if a land code is in force

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

mixed bag

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

• Section 35 of the Constitution Act, 1982 provides that “the existing aboriginal and

treaty rights of the aboriginal peoples of Canada are hereby recognized and affirmed.”

• What rights?
• aboriginal rights that were not extinguished prior to 1982 and are subject to proof and

evidence of specific/distinctive pre-contact practices (fishing rights, hunting rights, rights to land)

• Aboriginal rights are subject to infringement and justification tests
• Aboriginal self-government rights are “inherent” rights arising from the fact that

Aboriginal nations were historically self-regulating political entities controlling their own collective lives and lands.

• The existence of freestanding self-governance rights under s. 35 have not been

definitively decided by the Courts, but historically have been narrowly defined.

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

• Summary on Legal Context:
• The Federal Government has the power to make laws which regulates activities on

reserve (including the Indian Act, but other laws as well including the Cannabis Act and Regulations)

• Section 88 of the Indian Act provides that provincial laws of “general application” apply to

“Indians”, unless they are inconsistent with any federal laws or regulations or bylaws under them (including the Indian Act)

• A provincial law won’t apply to reserve land if (a) it singles out “Indians” or “Lands

Reserved for the Indians”, (b) it conflicts with a federal law (including the Indian Act), (c) it unjustifiably infringes a section 35 Aboriginal or treaty right, (d) it impairs the core of the federal jurisdiction under section 91(24).

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

Do nothing Regulate

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

• DO NOTHING:
• Allow the cannabis stores to continue to operate on reserve without OKIB regulating them

at all. This does mean that Federal and Provincial law will apply.

• RISK:
• Not the best strategy.
• Public health and safety is put a risk if there if unregulated establishments are allowed to
• perate.
• Creates uncertainty for entrepreneurs
• If an applicant applies to the province for a license for an establishment on reserve, the

applicant needs to get a recommendation from Council. So this requires that Council have a regime in place to deal with these requests.

• Liability risk if unregulated establishments are “sanctioned” by Okanagan Indian Band

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

• PASS A BY-LAW PROHIBITING PRODUCTION AND DISTRIBUTION:
• Council could pass a by-law prohibiting the production and distribution of cannabis on its

reserve lands pursuant to its powers under the Indian Act

• RISK:
• This is an option if this is the direction that Okanagan Indian Band wants to go
• It requires though that OKIB actively enforce its by-law
• Even if the community does not want to ban the production and distribution of cannabis

per se, the by-law could prohibit certain activities such as:

• Cultivating and producing cannabis in eg rental housing
• Consuming cannabis in eg rental housing where the person is prohibited from smoking tobacco

under other laws

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

• PASS A BY-LAW LICENSING PRODUCTION AND/OR DISTRIBUTION IN

COMPLIANCE WITH THE FEDERAL AND PROVINCIAL SCHEME

• Council could pass a by-law authorizing cannabis stores to operate on reserve in

compliance with the federal and provincial scheme pursuant to its powers under the Indian Act

• Council should then seek an agreement with the Province to create its own licensing

system within the provincial scheme RISKS

• This option carries with it minimal risk to Okanagan Indian Band
• The cannabis stores operating on reserve without a license (ie not compliant with the

fed/prov scheme) are subject to being shut down with fines imposed and perhaps criminal charges being laid

• Until a negotiated agreement is worked out with the province, licensees would have to

comply with the general regulations that apply off reserve

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

• PASS A BY-LAW LICENSING PRODUCTION AND/OR DISTRIBUTION WITHOUT

COMPLIANCE WITH THE FEDERAL AND PROVINCIAL SCHEME

• Council could pass a by-law authorizing stores to sell Cannabis on reserve without

compliance with the federal and provincial scheme pursuant to its powers under the Indian Act and its inherent rights

• RISKS
• This course of action carries more legal risk and the potential for protracted litigation.
• It is unlikely that a by-law passed pursuant to a power under the Indian Act allows OKIB to

regulate the production and distribution of Cannabis contrary to the federal Cannabis Act. Given that OKIB does not have a land code in force, OKIB would have to rely on an aboriginal right to trade or a right to self-government. This could land OKIB in protracted litigation establishing such a right which in the end may not lead to success depending on the facts and how the right is characterized.

• The Province may be less likely to negotiate a separate licensing agreement with OKIB if

OKIB proceeds down this road.

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

TO MINIMIZE RISK:

• If you are going to regulate, regulate fully by either prohibiting, enforcing

compliance with the federal/provincial scheme or regulating with your own developed scheme

• Regulation needs to:
• create order
• ensure a safe supply, protect young persons and the community, deter illicit activities etc
• provide certainty to entrepreneurs and businesspersons
• The By-law should contain immunity and indemnity clauses and provide that the

by-law itself does not relieve the person from complying with provisions of any

• ther act or regulation

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019

SUMMARY

• Production = Federal
• Distribution = Provincial
• Consumption = Federal/Provincial
• Use the First Nation’s powers to control and shape

business on your land Questions? Devrin Q Froese, Legal Counsel at Donovan & Company 604-688-4272 devrin_froese@aboriginal-law.com

Presented by Devrin Q Froese, Donovan & Company - July 31, 2019