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LAW TIMES 12 COVERING ONTARIO'S LEGAL SCENE | MARCH 18, 2019 www.lawtimesnews.com "Smart companies are find- ing ways to play within the grey area. If you're utilizing a safe driving campaign, it makes it hard for the government to crack down on that." Even though the rules in On- tario prohibit licensed produc- ers from operating retail loca- tions, Maurer notes that there is a proposed Tweed-branded store planning to open up in London, Ont., thanks to a licensing ar- rangement. Wishart says that this kind of licensing is expensive, but if it's one of the only ways for canna- bis companies to promote their brand, then they will be willing to spend the money. "There's nothing prohibiting [licensed producers] from part- nering with retailers to promote their brands inside the store," Maurer says. "In theory, once you're inside the store, the rules are even more relaxed because a cannabis store in Ontario is not allowed to have minors inside, so under the fed- eral legislation, it triggers one of the exceptions." LT 'Grey zone' utilized Continued from page 10 Provincial law does not provide clarity "It's finding agreements and new structures that don't quite fit into the old packaged idea of what these agreements might look like." Asfar says that instead of a traditional franchise agree- ment, retailers and producers may have an intellectual prop- erty licence to borrow a brand for an annual fee or produc- ers would employ consultants for retail operating advice on which they could collect fees. "Franchises, when you take them apart and look at their components, they're basically IP — a trademark — and a way of doing business, a know-how that is more of a 'secret sauce' that's not patentable but an ex- pertise," says Asfar. "Franchises usually pack- age this under the franchise model and take their cut of the profit." Asfar says that when you take these agreements apart and take away the franchise fee component, it becomes a simple licensing agreement. Finkelstein says the rules around the non-transferabili- ty of licences as a result of the lottery process are something of an anomaly and that future licences will be done in a more conventional method. Kelly Oksenberg, an associ- ate with Stikeman Elliott LLP in Toronto, says there is a lack of clarity from the province on what the next rollout will look like, given its use of a phased approach rather than a market approach. "It makes it difficult for li- censed producers and other companies generally looking to open retail cannabis out- lets," says Oksenberg. "There's still a lot of uncertainty in the process." Finkelstein says that what has been challenging for law- yers is that the feedback they have received from the gov- ernment and the AGCO has not been consistent when they have submitted licence agree- ments for approval. "It's tough to draw conclu- sions that, if you want to get a lottery deal through, you must do this and you must avoid this," says Finkelstein. Foster adds that the pro- vincial law does not provide a great deal of clarity. "You're dealing with, to a certain extent, an unpre- dictable regulator, which has made things challenging," says Foster. "If you are a lawyer who is currently in the process of try- ing to get a deal through for the AGCO and you're repre- senting either the lottery win- ner or the brand owner, that agreement should be really light on requirements being imposed on the operator," says Finkelstein. Finkelstein says that, in- stead, the agreements should mention optional support or consulting services, as deals structured in that manner will look less like an operator has ceded any control in run- ning their business in a cer- tain way. LT FOCUS Chad Finkelstein says lawyers need to be aware of the prohibitions in Ontario's Cannabis Licence Act. Continued from page 11 Alice Tseng says that while there are clear prohibitions against sponsorship of events in the Cannabis Act, there could be room for certain kinds of co-operation with event promoters. LawTimesNews.com Fresh Ontario legal news and analysis available on any device. Get More Online Available risk-free for 30 days Online: store.thomsonreuters.ca Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 Order # L7798- 8820-65203 $150 Softcover November 2018 approx. 300 pages 978-0-7798-8820-7 Multiple copy discounts available Shipping and handling are extra. Price(s) subject to change without notice and subject to applicable taxes. © 2018 Thomson Reuters Canada Limited 00254ZV-A94569-CM New Publication Cannabis Law Bruce A. MacFarlane, Q.C., Robert J. Frater, Q.C., and Croft Michaelson, Q.C. From the author team of Drug Offences in Canada, Cannabis Law is your practical guide to all aspects of the new Cannabis Act and regulations – including the complementary provincial, territorial, municipal, and Indigenous laws and regulations. This indispensable resource covers the following topics: • Federal regulation – Cannabis Act and regulations • Provincial, municipal, territorial, and Indigenous regulations • Criminal and regulatory offences • Penalties • Medical cannabis • Workplace and human rights issues • The business of cannabis – commercial law issues For additional research, a handy reference section provides a listing of cannabis-related websites organized topically. Cannabis Law is essential reading for lawyers, law enforcement/police, municipalities, educators, and businesses interested in participating in the emerging cannabis-related market. Effectively navigate the complicated new world of legalized cannabis in Canada

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