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We’re thrilled to welcome former Premier of New Brunswick Brian Gallant to Navigator as a Senior Advisor in our Toronto office.

In addition to his role as Premier, Brian served New Brunswick as the Attorney General, the Minister responsible for Innovation, and the Minister responsible for Women’s Equality. He was also  Chair of the Council of the Federation. An experienced political leader, lawyer and entrepreneur, Brian is actively engaged in cybersecurity, technology and sustainability issues through his work with Ryerson University, NGO Global Canada and numerous boards of directors.

At Navigator, Brian helps leaders navigate complex issues at the intersection of government, politics, business, law, social justice, media, and sustainability.

Since this election began, a consensus has emerged in national polling showing the Liberals and Conservatives essentially tied in support. Neither party has managed to sustain a significant lead outside the margin of error.

It’s a frustrating dynamic for both parties. Both have thrown opposition research at the wall, announced various policies targeted to their voters, and taken photo ops designed to break them free of the polling gridlock. But these efforts have been met with limited success.

With the parties so tightly deadlocked, you can expect a renewed focus on making sure their supporters turn out to vote. In fact, much of the Liberal win in 2015 can be credited to a surge in young voters who swamped traditional Conservative turnout.

That means that for each of the parties, rallying their supporters will be essential in the short time left on the campaign trail.

There can be little doubt that the Conservative base is motivated. After months of negative headlines, like the SNC Lavalin affair and the recent unveiling of the Prime Minister costumed in blackface, Conservative frustration has grown and pollsters have increasingly identified that they are among the most motivated to cast their ballots on election day.

In contrast, the enthusiasm among Liberal voters is less certain. The first-time voters and young Canadians who pushed the Liberals across the finish line were unified in their attraction to the promise of change and doing politics differently. Key policy initiatives underscored the Liberals new approach to politics, like the legalization of marijuana, a commitment to overhaul the electoral system, and action on climate change. Hundreds of thousands of voters turned out on that premise.

But those voters who put the Liberals on the government side of the House are now in clear danger of sitting this election out or parking their support elsewhere. The sunny ways that drew them to the Liberals in 2015 have been clouded over by a near-constant barrage of negative headlines. For evidence of this fear in the Liberal campaign, you need to look no further than Trudeau’s tactics of linking Andrew Scheer to Premier Ford and wading into provincial issues such as education and health care.

It remains to be seen is if these tactics will motivate the Liberal’s brittle 2015 coalition this October. But what is certain, both parties will continue to work to close the enthusiasm gap among their base to drive their supporters to cast their ballot.

Earlier today, Ontario took a critical step in its slow march towards a more liberalized cannabis retail market. The Alcohol and Gaming Commission of Ontario (“AGCO”) announced the winners of Ontario’s second lottery for cannabis retail store authorizations. 42 successful Expression of Interest applicants will now have the opportunity to complete licensing and store authorization processes with a goal to set up shop in October.

In addition to these successful applicants, eight allocations were previously granted to applicants on First Nations reserves on a first-come first-serve basis, subject to local First Nations Band Council approval.

The province’s first cannabis retail lottery was subject to extensive criticism after the majority of winners were sole proprietors with little experience or capability to set up and operate a cannabis retail store. This led to a feeding frenzy where these golden ticket winners essentially auctioned off commercial partnerships to the highest bidder.

This second lottery took deliberate steps to weed out unprepared applicants and set higher standards that would limit the playing field to larger players. Requirements included:

• A legal document demonstrating the applicant has the right to possess the secured retail space; and
• A bank letter confirming access to $250,000 cash and another confirming the ability to get a $50,000 standby letter of credit.

In addition to the more stringent requirements, reports indicate that several prospective retailers faced significant hurdles persuading financial institutions to provide the relevant letters. Many institutions offered a limited set of options, costly processing fees and time-consuming approval processes.

Store Locations

Licences have been divided geographically in the following groupings:

East region: seven stores

• Three in Innisfil
• One store in each of the following cities: Nepean, Peterborough, Collingwood and Barrie

GTA region: six stores

• Two in Burlington
• Two in Oshawa
• One store in each of the following cities: Aurora and Burlington

Toronto region: 13 stores

West region: 11 stores

• Two in London
• One store in each of the following cities: Kitchener, Hamilton, Welland, Windsor, Stoney Creek, Niagara Falls, Ancaster, St. Catharines and Guelph

North region: five stores

• One store in each of the following cities: Kenora, North Bay, Sault Ste. Marie, Thunder Bay and Timmins (currently none of these markets have licensed retail stores)

First Nations reserves: eight stores

All Politics are Local

The government’s lifting of prohibition on licences in communities with under 50,000 residents means we can expect to see cannabis storefronts in smaller communities such as Innisfil, Welland, Collingwood and Stouffville for the first time. As a result of major GTA municipalities like Mississauga and Markham opting out of cannabis retail, we will see significantly fewer new stores in the surrounding GTA region with only six new stores in the 905 (compared to 13 in the 416).

It remains to be seen whether any of these new store locations will be subject to community backlash, owing to such issues as proximity to area schools or other sensitive use areas. There were surprisingly few complaints with the initial 25 stores, but some municipalities have been taking steps of late to state their views on where cannabis stores should be located.  The City of Thunder Bay, for example, recently recommended that stores be located at least 150 metres away from parks, community centres, recreational facilities, libraries, watercourses, mental health and addiction facilities and alcohol retail outlets.

While the policy is not binding, it shows a potential resistance at the local level that retailers will need to prepare for and mitigate as they seek to enter new markets. Provincial legislation only requires dispensaries to be at least 150 metres away from schools, meaning other recommendations made are unenforceable.

Building social licence locally will be critical and we recommend that all prospective retailers be mindful of the heightened risks of community backlash owing to the “clustering” of stores in certain municipalities and neighbourhoods following today’s lottery.  For example, five of 13 new stores in Toronto are located on Queen Street, making it the new “cannabis row” fort Canada’s legal market.

Surprises

One of the early sources of surprise in today’s lottery results was a numbered company located on 104 Harbord St. in Toronto, the current location of one of CAFE’s dispensaries. The unlicensed chain has made waves for continuing to operate despite being repeatedly raided by police forces. While it remains unclear what affiliation, if any, the lottery winner has with the dispensary chain, it is highly unlikely that a business with common branding or affiliation will be able to obtain a retail licence and store authorization.

A spokesperson for Ontario’s Attorney General confirmed this in a CBC story, reiterating that Ontario’s Cannabis Licence Act precludes licences from being issued to:

• Anyone with ties to organized crime;
• Anyone who has been charged or convicted for contravening the Cannabis Control Act;and
• Anyone who has illegally sold cannabis after Canada’s legalization date.

The spokesperson also stated that, “licences will not be issued to anyone for who there are reasonable grounds to believe will not act with integrity, honesty or in the public interest.”

What This Means

Today’s lottery results can be seen as the first of a series of steps moving toward a more open, liberalized cannabis market. Despite the province proceeding at a slow pace, it has repeatedly committed to move towards an open allocation of licences.

While supply pressures appear to be alleviating, the ability of the Ontario Cannabis Store to supply Ontario’s recreational market will continue to be tested with an increased retail footprint and the upcoming legalization of new cannabis products (i.e. concentrates, edibles, beverages and topicals). While the new products will technically be legal as of October 17, 2019, Health Canada must be notified 60 days before any product can actually be sold. Given this 60-day rule, edibles, concentrates and other products will not be on shelves until at least mid-December. Early evidence has shown a clear consumer preference for retail sales with legal sales doublingfrom March to April, after the first licensed retailers opened.

In addition to the allocation of more licences, sources have indicated there is consideration by government for Licensed Producers to participate more directly in the retail market.  Potential solutions that the government may consider include:

• The licensing and authorization of “farmgate” operations on production facilities;
• Loosening of the current “affiliate” definition that prohibits Licensed Producers from owning more than 9.9% of a licensed retailer; and
• Creating a framework for private wholesale.

With limited supply, the Ontario Cannabis Store has obvious interest in controlling as much of the recreational cannabis market as possible. However, as supply catches up to demand this conservative-minded government will have an increasingly challenging time justifying a government monopoly over recreational cannabis wholesale. Today’s news is only one of a series of steps we can expect as the Ontario retail market continues to find its feet.

We’re thrilled to welcome Brayden Akers to Navigator as a Senior Consultant in our Toronto office. Brayden comes to Navigator from the Ford government where he served as Director of Communications to Ontario’s Minister of Energy, Northern Development and Mines, and Minister of Indigenous Affairs.

Brayden brings over ten years of experience working in the federal, provincial and municipal government sectors, in crisis communications, media relations and issues management roles.

He previously served as a senior political staffer in Ottawa under the Harper government, where he worked in communications and media relations roles at Transport and Infrastructure Canada and as an advisor in the Office of the Prime Minister.

Navigator receives accreditation from Law Society of Ontario to provide continuing professional development for lawyers

With over two decades of experience serving the legal community, Navigator is proud to be among the first public affairs firms in Canada to deliver continuing professional development content for lawyers.

Beginning April 2019, Navigator will be hosting a quarterly series of panel discussions for the legal community that will focus on the intersection of legal and reputational jeopardy, particularly in high-stakes crisis situations. The series has received accreditation from the Law Society of Ontario and therefore will count toward the three professionalism hours of continuing professional development that Ontario lawyers must complete each year.

We are excited to have a top-flight panel for our first session, which will examine the subject of Reputational and Legal Jeopardy in Crisis Situations. Our panel will include the Hon. Stephen Goudge, Q.C., former Ontario Court of Appeal Judge, and Chris Bentley, former Attorney General of Ontario and current Managing Director of the Law Practice Program, as well as our very own Jaime Watt and Lisa Pearson.

“When crisis hits, an organization almost always faces two kinds of jeopardy: legal and reputational,” says David Phillips, Principal and General Counsel of Navigator. “These days, reputational crises can sink a company more swiftly and severely than a lawsuit. Navigator is thrilled to be joined by two of our country’s most esteemed lawyers for this exploration of the relationship between legal and reputational risk and the unique role of the legal practitioner in high-stakes crisis situations”.

In the past, legal and reputational jeopardy have been dealt with consecutively, with legal issues taking precedence over reputation. Times have changed. In the age of social media and the 24-hour newsroom, reputation is not something that exists only on a newspaper’s front page for a few days. We now live in a world where legal and reputational risk must be dealt with contemporaneously. This fundamentally impacts the role of the legal advisor, particularly in high-stakes and high-profile cases.

Navigator specializes in balancing the realities of legal and reputational risk, whether in the context of a high-profile lawsuit, regulatory investigation, controversial transaction, among other legal matters. To meet the complex strategy needs of the digital age, Navigator works together with clients to find cross-disciplinary solutions to manage issues before they become full-blown crises and to minimize reputational damage.