Will a Supreme Court case end provinces’ pot monopolies before legal stores even open?

A marijuana plant at the AmeriCanna Edibles facility on Tuesday, April 25, 2017 in Boulder, Colo. Joe Mahoney / The Canadian Press

As provinces begin drafting laws for the control and sale of cannabis on their territories, a case that the Supreme Court of Canada will hear in a few weeks threatens to derail their plans.

Ontario and Quebec, for instance, want to create provincial cannabis monopolies. As a consequence, Quebecers and Ontarians would be prohibited from mail-ordering recreational cannabis from licensed producers outside their home province or buying pot from anyone other than their provincial government.

But on Dec. 6, the Supreme Court begins hearing arguments in a case that could mean the end of state-run monopolies as they apply to another favourite Canadian vice: alcohol.

WATCH: New Brunswick has announced a subsidiary of NB Liquor will operate recreational cannabis retail stores in the province and has revealed more on how it plans to do it. Jeremy Keefe reports.
Click to play video: 'N.B. to sell marijuana from government stores, will check ID at door'
N.B. to sell marijuana from government stores, will check ID at door

If the justices rule in favour of a New Brunswick man fighting against provincial liquor monopolies, the decision will almost certainly trigger lawsuits across the country seeking to dismantle similar government-run corporations for marijuana, according to legal and trade experts.

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“It would mean big changes — a more free and fair cannabis industry,” said Jack Lloyd, one of the lawyers representing marijuana activists who received intervener status in the Supreme Court case.

The case began in 2012, when the RCMP arrested Gerard Comeau on his return to New Brunswick after he had bought alcohol in Quebec.

He was fined for violating New Brunswick law, which limits the amount of booze that can be brought into the province from elsewhere in Canada.

Comeau contested the ticket, arguing Sec. 121 of the Constitution Act, 1867, mandates that all Canadian goods be admitted freely across the country.

His lawyers argued the fathers of Confederation wanted a single market for all products made in Canada.

WATCH: Albertans could soon be allowed to carry up to 30 grams of cannabis, which amounts to about 40 joints. But who – and where – it will be sold is still being decided. Kendra Slugoski has more.
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Alberta’s plan for legal marijuana

Comeau won, and his case has made its way to the highest court in the country.

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Legal and trade experts consulted by the Canadian Press said they believe the Supreme Court will likely rule in favour of Comeau, but their opinions diverged on how that decision would apply to the cannabis industry.

Brian Lee Crowley, managing director of the Macdonald-Laurier Institute, an Ottawa-based think-tank, said a Supreme Court ruling in favour of Comeau would prevent provinces from discriminating between Canadian suppliers of alcohol — or cannabis.

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“I think (a Comeau win) would make provinces not be able to prevent you from, say, mail-ordering marijuana from someone in another part of the country,” Crowley said in an interview.

Pier-Andre Bouchard St-Amant, a professor at Quebec’s school of public policy, said “according to all the prognostications, the Supreme Court will rule in favour of Comeau.”

WATCH: Marijuana legalization was front and centre as the federal health minister joined a meeting of her provincial counterparts in Edmonton. As Tom Vernon explains, the ministers wanted assurances the federal government is still on track to meet a tight deadline.
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He added, however, he believes provinces would still be allowed to enter into agreements with one another to limit the cross-border trade of certain products, depending on the scope of the ruling.

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Andrew Smith of the University of Liverpool Management School, was an expert witness in the Comeau case and said he believes the framers of the Constitution wanted a single market “without fetters on interprovincial trade.”

Smith said if the Supreme Court agrees with Comeau, companies will surely attempt to use the judicial precedent to argue against provincial cannabis monopolies.

“I don’t think that this will happen in practice,” he said. Australia’s constitution has a free-trade clause similar to Canada’s, and the European Union is also governed by free-trade principles — but not with regard to recreational drugs, he explained.

“People in EU countries cannot drive to Amsterdam, where marijuana is openly sold in cafes, and then drive back to say, Germany, with the marijuana,” Smith said in an email.

“The principle of the single market doesn’t extend to such controversial products” in Australia or the EU, he said.

WATCH: Manitoba will task its Liquor and Lotteries Corporation (MBLL) with securing and tracking the supply of marijuana once it’s legal but the private sector will be responsible for setting up storefronts and selling it. Global’s Timm Bruch reports.
Click to play video: 'Pot to be sold from private retail locations in Manitoba, supply handled by Liquor and Lotteries'
Pot to be sold from private retail locations in Manitoba, supply handled by Liquor and Lotteries

Whether marijuana will be mentioned in the Supreme Court’s ruling, or how broad it will be, remains to be seen.

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But Lloyd said if free trade in Canada doesn’t apply to cannabis, then the black market will continue to fill an important void.

Prime Minister Justin Trudeau has promised marijuana will be legal in Canada by July 1, 2018, but he has left it up to the provinces to regulate how cannabis will be controlled and sold on their territories.

One of the main justifications for legalization was to take revenues away from organized criminals.

Canadians, however, will continue to purchase marijuana from illegal producers across the country — including by mail — if they can’t find the products they like, in an accessible way, in their home provinces, Lloyd said.

“The existing illegal industry will thrive if these provincial restrictions (remain) onerous.”

WATCH: Starting next summer, cannabis could be controlled and sold through a subsidiary of the SAQ. As Global’s Raquel Fletcher reports, if the bill is passed without amendment, Quebecers will no longer be allowed to grow their own marijuana plants.
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Quebec tables marijuana bill

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