Acting as an estate trustee can be complicated. Complications are multiplied where the estate includes property that is or has been used in a manner contrary to the Cannabis Control Act.
Under the Cannabis Control Act, S.O. 2017, Chapter 26, as amended, various offences are created involving the production, sale or other distribution of cannabis. Vis-à-vis landlords, section 13 of the Act makes it an offence to “knowingly permit a premise of which he or she is a landlord to be used in relation to activity prohibited by section 6”. Section 6 provides that no person shall sell cannabis, other than an authorized cannabis retailer.
The Act provides for penalties for landlords of at least $10,000 and not more than $250,000 or imprisonment for a term of not more than two years less a day, or both. Fines are subject to an additional 25% Victim Fine Surcharge.
Additionally, the court may, upon conviction, order that a premise be closed to any use for a period not exceeding two years. Prior to conviction, the police may cause the premises to be closed immediately. The premises are to be closed until the final disposition of the charge, subject to an order of the court lifting the closure.
A defense to a charge against a landlord under the Act is the fact that the landlord took reasonable measures to prevent the prohibited activity.
Additionally, forfeiture could be sought by the Crown under the Civil Remedies Act.
An estate trustee holding real property should take steps to ensure that he or she knows what is happening at the property, and to ensure that the property is not being used for illegal activity. In addition, the estate trustee should document the steps that are taken to prevent illegal activity. Leases should be reviewed in order to ensure that they prohibit illegal activity.
For further information, see “The Ontario Cannabis Control Act and Implications for Commercial Landlords” by David Reiter and Brian Chung.
For a blog on Cannabis and Estate Law, see my prior blog, here.
Have a great weekend.
Estate law is centred on asset planning for an end-of-life experience. So not surprisingly, we’ve seen just about every end-of-life situation you can imagine. I can tell you first-hand, many of these situations are painful, fearful, and depressing.
Does it have to be this way? The answer, in many cases, is “no.” We’re beginning to learn about new treatments that can help – and one of the most promising is the use of psilocybin, the active compound in hallucinogenic mushrooms.
Thank you legal cannabis
The legalization of cannabis in Canada and many U.S. states is breaking down barriers for research that was previously taboo, illegal, or underfunded. This is especially so in areas of mental health.
The treatment of physical pain with restricted drugs like morphine has long been accepted. But the use of mind-altering drugs for mental health? Not so much.
That stigma is changing. We’re on the edge of a new frontier in the treatment of “mental pain” – anxiety, depression, and fear of death – and psilocybin is front and centre.,
Research has shown that one of the most promising uses for psilocybin is in end-of-life situations. For those with a terminal illness, psychedelics not only provide relief from the terror of dying during the actual psychedelic sessions, but for weeks and months after.
According to researchers, psilocybin can create a deeper meaning and understanding of terminal situations – and is helpful in relieving the agony of the inevitability of death. Patients could reassure themselves and their loved ones that from a mental standpoint, they truly were okay. Many reported that using psilocybin was one of the most important experiences of their life. You can read more about the studies here.
Change is coming
There are calls for psilocybin to be reclassified for medical use, paving the way for the drug to be used to treat a number of mental health conditions – from fear of death, to depression, to addiction. The New York Times discussed this movement in a recent article.
This new attitude embracing research into the possible use of psychedelics for mental health is a welcome change. I look forward to the findings.
Thank you for reading,
In case you haven’t read or heard enough about the legalization of cannabis in Canada this week, here’s more.
The legalization of cannabis in Canada may have a significant impact on estate planning. Specific issues include:
- Impact on Testamentary Capacity
Today’s marijuana is not the same as marijuana from “back in the day”. The average potency of marijuana has risen from 3.9% THC in 1983 to 15.1% in 2009. On the OCS website, the only legal retailer of recreational marijuana in Ontario, cannabis is available with a labelled THC content of 17 to 28%.
The long term effect of cannabis on cognitive functions has been documented. The immediate and long term effects of cannabis use may have an impact on testamentary capacity, much like other intoxicants or mind-altering substances.
- Impact on Bequests Conditional on Non-Use of Illegal Drugs
The use of incentive trusts is not common, but they do exist. See our blog, here, and our podcast on the topic, here. These trusts can be used to limit or restrict distributions to a beneficiary based on prohibited behavior.
An issue arises if the trust is designed to disincentive use of “illegal drugs”. The effect of the legality of marijuana may undermine the testator’s intentions.
- Insurance Issues
Numerous issues arise in the context of health and life insurance. Issues include:
- Disclosure of cannabis use and the effect on insurability and rates
- The implications of being a medical user, as opposed to a recreational user
- Whether the purchase of medical marijuana is covered by health insurance. (See our blog on this topic, here.)
- Whether a loss arising from the use of marijuana would be covered.
- Administration Issues Related to Cannabis
Issues related to administration include:
- What does the estate trustee do with cannabis possessed by the deceased?
- How is the cannabis to be valued for Estate Administration Tax purposes? (However, in light of the possession limits, this might be de minimus.)
These matters may be of greater concern in the US, where some states have legalized marijuana, while it remains illegal under federal legislation.
For a more detailed discussion of these issues from an American point of view, see “Joint wills and pot trusts: Marijuana and the Estate Planner” by Gerry Beyer and Brooke Dacus.
Have a great weekend.