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Supreme Court case may threaten pot monopolies

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MONTREAL — As provinces begin drafting laws for the control and sale of cannabis on their territories, an upcoming Supreme Court of Canada case is threatening 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.

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

“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.

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

Legal and trade experts consulted by The Canadian Press said they believe the Supreme Court likely will 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.

“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.

But Pier-Andre Bouchard St-Amant, a professor at Quebec's school of public policy, said he believes provinces still would 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.

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 surely will try to use the judicial precedent to argue against provincial cannabis monopolies.

“[But] I don't think that this will happen in practice,” he noted.

Australia's constitution has a free-trade clause similar to Canada's while the European Union 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 e-mail.

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

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

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