Supreme Court of Canada Judgement in R v. Smith: Court Rules Restriction to Dried Marijuana Violates Charter

The Supreme Court of Canada in a very strong ruling released this morning found that a medical marijuana access regime that only permits access to dried marijuana unjustifiably violates the guarantee of life, liberty and security of the person contrary to section 7 of Canada’s Charter of Rights and Freedoms. The Supreme Court ruled this violation of section 7 of the Charter is not reasonable and justified under section 1 of the Charter. According to the Court, the disconnect between the prohibition and its object renders it arbitrary under section 7 and also frustrates the requirement under section 1 of the Charter that the limit on the right be rationally connected to a pressing objective. For this reason the Supreme Court of Canada concluded the infringement of section 7 is not justified under section 1 of the Charter.

The Supreme Court of Canada ruled the appropriate remedy in the circumstances is a declaration that sections 4 and 5 of the Controlled Drugs and Substances Act (Canada) “are of no force and effect, to the extent that they prohibit a person with a medical authorization from possessing cannabis derivatives for medical purposes”.

If you have any questions or would like more information regarding applying to be a licensed producer under the MMPR, Canada’s Marijuana for Medical Purposes Regulations, call or email Koby Smutylo at 613 869 5440 or


Quebec Doctors’ College Releases Guidelines for Prescribing Marijuana to Patients

Quebec’s College of Physicians of Quebec (“CMQ”) released guidelines it Quebec physicians must follow to prescribe medical marijuana.  In a nut shell, CMQ takes the position that dried marijuana is not recognized for medical purposes and that it should only be prescribed by Quebec physicians for research purposes.

Physicians and HST – Sharing a medical practice

Many physicians and dentists (collectively, “practitioners”)  practice in groups and it is common for one or two practitioners (the “Principal”) to own the practice (i.e. the lease, equipment and administrative support) and for the other physicians to remit a portion of their billings to the Principal for use of the practice facilities.

Recently, we advised a senior doctor, the Principal in this practice, with a busy practice that includes two other senior doctors.  The two doctors use the practice facilities and staff and in-exchange remit a portion of their billings to the Principal.   This practice group is not a “partnership”.    In order to not trigger GST/HST liability on the payments from the doctors to the Principal, our advice was for the Principal to “hire” the two doctors as “associates” of the practice.  In this way, their billings would be billings of the medical practice and each associate doctor would be entitled to a certain percentage.

Due to OHIP billing requirements, the associate practitioners bill OHIP directly and then forward a portion of the fee paid by OHIP to the Principal.  This portion may be based on a percentage of the associate’s billing or another formula.  As long as the associate and the Principal have entered into a bona fide arrangement to share fees, CRA will not consider the payment by the associate to be in respect of a supply of practice facilities (i.e. offices, administrative support, equipment, etc.).   Rather, CRA accepts that the payment between the practitioners is an apportionment between the two parties and not subject to GST/HST.    When drafting associate agreements for medical or dental practice groups, it is critical that the “apportionment” nature is made clear.  If the agreement between Principal and associate doctor or dentist, as applicable, characterizes the payment as being “for use of the facilities of the practice”, CRA takes the position that GST/HST will apply to the payment made by the associate to the Principal.

As an added precaution, the associate agreement we prepared for our Principal included the following clause:

“The parties believe the GST/HST does not apply to the Associate’s supply of Services hereunder; however, in the event Canada Revenue Agency or its successor finds the supply of Services hereunder to be subject to the GST/HST or other similar tax based on supply of services, the Associate shall be liable for, and shall promptly pay, such taxes.”  

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