Liability pitfalls and defences for Directors and Officers under federal and provincial cannabis legislation

Introduction

On October 17, 2018, the lion’s share of the federal Cannabis Act1 and the Ontario Cannabis Act20172 took legal effect, marking the legalization of non-medical cannabis across Canada, within defined limits. Directors and officers of federal and provincial corporations in the legal cannabis sector now operate in a new and dynamic regulatory climate.

As with any regulated industry, directors and officers should apprise themselves of the legal pitfalls in the post-legalization world, and liability insurers should prepare carefully for the potential risks that might shadow the cannabis market in its early days.

At a minimum, liability insurers should consider (a) new offences to which directors and officers are exposed, (b) what procedures are in place with respect to those offences, (c) what penalties might a director or officer be liable to pay, and (d) what defences are available, if any.

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