Cannabis is now a consumer product in Quebec already captured by a restrictive legislative framework, which includes the Consumer Protection Act (“CPA”).
The CPA is a statute of public order that cannot be set aside and that applies to all contracts in Quebec between a consumer, a natural person acquiring products or services for a personal use, and a merchant in the course of its business.
I. The CPA and the consumer
The scope and extent of the CPA know little boundaries and the sale of cannabis or the Société québécoise du cannabis have not been excluded from its ambit.
The CPA seeks to restore the balance in contractual relationships between merchants and consumers and to eliminate unfair and misleading practices to safeguard an efficient marketplace in which the consumer can participate confidently. A consumer, within the meaning of the CPA, is a vulnerable, credulous and inexperienced person taking no more than ordinary care to own affairs.
The CPA thus permits to rebalance relationships between consumers and merchants permitting consumers to make informed choices and fostering the protections and benefits available to them. When in presence of a doubt or an ambiguity, the interests of the consumers always prevail.
While the CPA applies to a variety of contracts and subject matters, the warranties it is offering to consumers in relation to the purchasing of products and services are of significant interest with regard to this new consumer product now legitimately available to the public.
II. The warranties benefiting consumers
The CPA extends consumers various legal warranties of quality and proper use further to the purchasing of products and services, the most relevant to the current topic being the following:
a) A product must be fit for the purpose for which it is ordinarily intended;
b) A product must permit a normal usage for a reasonable length of time, having regard to its price, the terms of the contract and its use;
c) A product must be consistent with its description at the time of the sale;
d) A product must be consistent with any statement or advertisement, written or oral, made in relation thereto by a merchant or a manufacturer.
These warranties are analogous to the legal warranty of quality provided by the Civil Code of Quebec and seek to ensure to the consumer that the use of the product meets its legitimate expectations and that the product is not deficient to the extent the consumer would not have purchased it had he or she known about such a defect at the time of the sale.
Importantly, consumer rights arising from the CPA and its legal warranty regime can be invoked both directly towards the merchant and the manufacturer of the product.
From a legal perspective, the use cannabis is ordinarily intended and the consumers’ legitimate expectations in relation thereto have yet to be defined. However, one could contemplate that the consumption of this product could not meet a consumer’s legitimate expectations or, to the contrary, exceed his or her expectations and create undesired effects or consequences.
For the cannabis merchant or manufacturer doing business in Quebec, these considerations can be of importance in the marketing of this product and its attributes depicted to consumers in its sale. This industry would be well advised to develop a complete and detailed disclosure of cannabis’ attributes and its potential effects to be remitted to consumers upon its purchase, similarly to a product monograph accompanying medications and prescription drugs.
III. Prohibited business practices
The Act to constitute the Société québécoise du cannabis, to enact the Cannabis Regulation Act and to amend various highway safety-related provisions already restrictively governs the promotion and advertizing of cannabis.
As a reminder, the CPA also imposes the following obligations on merchants, manufacturers and advertisers, regardless of whether a contract in relation to a product or a service is entered into:
a) No merchant, manufacturer or advertiser may make false or misleading representations to a consumer;
b) No merchant, manufacturer or advertiser may falsely ascribe a product certain special advantages or specifications;
c) No merchant, manufacturer or advertiser may fail to mention an important fact in any representation made to a consumer.
IV. The sanctions further to a violation of the CPA
The CPA extends consumers civil rights of action to sanction any violation of its provisions, whether regarding the entering into a contract or its form, or a breach of a substantive obligation provided therein.
Usually, a breach of the CPA is sanctioned by way of section 272 that provides an indemnification scheme to the consumer, including the granting of both compensatory and punitive damages.
272. If the merchant or the manufacturer fails to fulfil an obligation imposed on him by this Act, by the regulations or by a voluntary undertaking made under section 314 or whose application has been extended by an order under section 315.1, the consumer may demand, as the case
may be, subject to the other recourses provided by this Act,
(a) the specific performance of the obligation;
(b) the authorization to execute it at the merchant’s or manufacturer’s expense;
(c) that his obligations be reduced;
(d) that the contract be rescinded;
(e) that the contract be set aside; or
(f) that the contract be annulled,
without prejudice to his claim in damages, in all cases. He may also claim punitive damages.
Whenever applicable, section 272 CPA creates an absolute presumption of prejudice in relation to any violation of the CPA, including its substantive provision, the commission of prohibited business practices or careless merchant behaviour. This deprives the merchant of demonstrating that the consumer has not suffered a prejudice from the impugned conduct.
Otherwise, the granting of compensatory damages beyond the remedies provided by the CPA obey the usual rules pertaining to civil liability, as well as the granting of punitive damages under the CPA is incumbent on demonstrating a conduct displaying a merchant’s ignorance, carelessness or serious negligence with respect to its obligations and consumers’ rights
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The application or reliance on the CPA in relation to cannabis has not yet been submitted to the attention of the courts, although this seems inevitable in the foreseeable future without a legislative intervention to exclude or limit the application of the CPA towards this product.
The stakeholders of the bourgeoning industry should be aware of the obligations imposed by the CPA to ensure the success of their commercial endeavours and maintaining clear and sound relations with their consumer.