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cannabisconundrum 48 | spring 2017 cmba-achc.ca CmB magazine For those unfamiliar with the marijuana grow op licensing regime, a Supreme Court of Canada decision in 2015 paved the way for exempt producers to begin indoor cultivation for medical use. e Court ruled that restricting medical access to marijuana to its dried form is inconsistent with the Canadian Charter of Rights and Freedoms (R. v. Smith) 1 . Accordingly, the Minister of Health issued various exemptions under the Controlled Drugs and Substances Act, including an exemption under section 56 for individuals authorized to possess or to produce marijuana for medical purposes by virtue of an interim injunction. is essentially means that persons who fit the exemption conditions can, through a simple application process, grow marijuana for their own medical use without a full licence. Under new Access to Cannabis for Medical Purposes Regulations, additional exemptions which were issued to licensed producers, clients and individuals responsible for these clients, health care practitioners and hospitals, have been continued. However, "the section 56 class exemption for individuals authorized to possess or to produce marijuana for medical purposes by virtue of an injunction remains in place. is will allow these individuals to continue to produce and possess marijuana derivatives in accordance with the section 56 class exemption until such time that the injunction is no longer in effect." 2 Various Canadian law enforcement organizations estimate that there are over 50,000 illegal grow operations in Canada. In terms of the number of permitted grow ops, we know that Health Canada in 2014 approved over 57,799 Canada-wide applications for personal medical use. Some authorities have estimated that there will be almost half a million personal grow operations across Canada by 2024. e federal government has now issued a total of 45 licences across Canada for commercial marijuana production. Health Canada purports to conduct "routine inspections of licensed producers of cannabis for medical purposes, to verify their ongoing Banking Cannabis Clients Under Canada's Anti-Money Laundering Regime By Jacqueline Shinfield, alexiS levine and nicole Mcdonald – Blake, caSSelS & Graydon llP U nlike the United States, where the sale of cannabis remains illegal federally, the sale of cannabis for medicinal purposes has been legalized in Canada. Following a recent announcement by the Canadian government, legislation has now been proposed that would expand access to cannabis by legalizing the sale of recreational cannabis by registered dealers in Canada. Under the proposed legislation, the production, sale and possession of certain amounts of cannabis will be federally legal, though provinces will ultimately decide how cannabis will be distributed and sold within their boundaries. The federal government hopes to clear the parliamentary and procedural hurdles to make cannabis legal by July 1, 2018, setting the stage for a growing cannabis industry to develop in Canada. As the cannabis industry expands in Canada, cannabis-related businesses will increasingly seek banking and financial services from Canadian financial institutions. However, cannabis-related businesses would likely be considered high-risk clients under the Canadian anti-money laundering regime. Accordingly, opening and maintaining accounts for cannabis-related businesses will require substantial resources and diligence on the part of financial institutions, especially in light of the obligation imposed on financial institutions under anti-money laundering legislation to engage in ongoing monitoring of clients and their activities.

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