ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CR-15-10000138-00BR

DATE: 20150716

B E T W E E N:

HER MAJESTY THE QUEEN

Kerry Benzakein, for the Crown

Respondent

• and -

ZHONG G. ZHENG

Darren S. Sederoff, for the Defendant/Applicant

Applicant

HEARD: July 14, 2015,
at Toronto, Ontario

Michael G. Quigley J.

Reasons for Ruling

Re: Application to Vary Terms of Judicial Interim Release

1The applicant is charged with a number of charges relating to alleged illegal production and possession of marijuana. Specifically, he has been charged with three offences of failing to comply with the terms of a recognizance, with possession of proceeds of crime contrary to the Criminal Code, as well as three counts of possession of marijuana for the purposes of trafficking; three counts of production of marijuana and two counts of possession of marijuana under the Controlled Drugs and Substances Act (CDSA).

2The charges arose when the police executed search warrants at 50 and 100 Melford Drive, two industrial units, in northeast Scarborough on August 11, 2014. Although five municipal addresses were involved, upon executing the warrants, the police determined that the two units at 50 Melford and the three units at 100 Melford had been combined, and those spaces were being used to run grow-operations for significant quantities of marijuana. Others are also involved in this matter, but their names and involvement is not material here.

3While the validity of the charges is not the focus of this proceeding, it is of note that evidence gathered during the investigation allegedly shows that the applicant was the owner/operator of a corporation that was paying for the supply of hydro electricity for all five operations at both locations, was seen to regularly come and go to the address, was listed as a tenant of 50 Melford, and was the holder of what police claim is an expired Authorization to Possess (“ATP”) permit. He was in possession of over $6,000 in Canadian currency at the time of his arrest outside the 50 Melford grow-op. Within units 4 and 5 at 50 Melford, that operation consisted of 715 plants and 57 kilograms of dry marijuana.

4The applicant acknowledges that he was growing marijuana but claims that he was doing so at that location as the lawful holder of a valid Personal-Use Production License for Dried Marijuana for Medical Purposes, under the Marihuana Medical Access Regulations (“MMAR”). His licence was scheduled to expire on February 20, 2014, but he claims that his right to produce marijuana at that address is continued and preserved by the interlocutory injunction granted to specific plaintiffs by Manson J. of the Federal Court in the matter of Allard et al. v. Her Majesty The Queen.¹ Mr. Zheng claims that in accordance with the order of Mr. Justice Manson dated March 21, 2014, the valid PUPL license that he held "shall remain valid until such time as a decision in the case of Allard, et al v. Canada is rendered at trial;"

5On August 12, 2014, the applicant was released on a recognizance of bail that permitted him to return to the Melford address but "only as authorized by Health Canada." At the time of the show cause hearing, the Crown was unable to determine Mr. Zheng’s status vis-à-vis the continued production of marijuana, so that condition had been added to the terms of his release in order to obviate the need for a further variation should the agency agree with defence counsel that Mr. Zheng's license was indeed valid. Plainly, however, Health Canada's position remains that the applicant was not authorized to be producing marijuana.²

6Now, in May 2015, police returned to the Melford Drive location and recommenced their investigation of that unit, and on May 21 observed the applicant to re-attend at the address. A new CDSA search warrant was obtained. Upon the execution of that warrant, Mr. Zheng was arrested outside the unit. A search of the unit revealed that a fully functional marijuana grow operation was once again being carried on at 50 Melford, consisting of 640 plants and almost 11 kilograms of dry marijuana. It is interesting to note, contrary to the search and seizure on the first occasion where there were significant excess quantities of marijuana, both in terms of numbers of plants and in terms of dried product, when the second warrant was executed, quantities of plants and dry marijuana found there would in fact have been within the limits of the license that Mr. Zheng possesses. There would have been no overgrowth or over storage, on the presumption that Mr. Zheng’s right to produce medical marijuana continues to be preserved by the Allard injunction.

7Since the applicant claims to have been a lawful holder of a valid PUPL license at the date of the injunction, March 21, 2014, he claims that his license is exempt from the repeal of the MMAR. Therefore, he now also seeks a variation of his existing recognizance so that he may return to 50 Melford Dr. for the purpose of continuing to produce marijuana in order to meet his medical needs.

8There is one final important point to note at the outset. That point is that there is no one who is arguing that Mr. Zheng does not have the right to have medical marijuana for the treatment of his allegedly severe arthritic condition. He is presently the holder of an ATP provided to him under a Certificate of Practitioner dated August 27, 2014 completed by Dr. Henry Moller, certifying that he suffers from arthritis and that dried marijuana in the amount of 30 grams a day, maximum, is to be taken orally or inhaled and has been authorized by Dr. Moller for treatment of that arthritic condition. Under the new Marihuana for Medical Purposes Regulations (“MMPR”) regime, however, he can only obtain that marijuana from a licensed producer, a healthcare practitioner in the course of treatment for medical condition, or from a hospital – he cannot grow it himself.³

Procedural Background

9By way of background, prior to October 1, 2013, the production and possession of marijuana for medical purposes was governed by the MMARs. Under those regulations, persons who wished to produce their own marijuana required an ATP issued by Health Canada under section 11 of the MMAR and a Personal Use Production License (“PUPL”) issued under section 24 of those regulations. An ATP would be granted to any person who received a medical declaration from a licensed physician that they needed to use medical marijuana for medical treatment purposes.⁴ A PUPL would be issued to any person who held an ATP at the time of their application, subject to certain consents being received by the owner of the property where the marijuana was to be grown.⁵ It is of specific note that section 33 of the regulations specified that a PUPL issued under the MMARs expired on "the date of the expiry of the authorization to possess held by the license holder", and, in any event, no later than March 31, 2014.

10The MMAR regime has now been replaced, however, by the Marijuana for Medical Purposes Regulations ("MMPRs"). That new regulatory regime was implemented gradually and there is a transitional period when the two regime's co-existed. However, two dates are important in the context of this application, namely September 30, 2013, and March 31, 2014. Those dates are important because no PUPL licenses were issued or renewed after September 30, 2013. Further, the MMAR was fully repealed as the applicable regulatory regime on March 31, 2014.

11Against that background, and faced with a new regulatory framework that was going to severely limit the ability of medical marijuana users to grow their own marijuana for self-treatment purposes, a large number of previously authorized marijuana patients brought applications in the Federal Court and in this and other Superior Courts seeking a declaration that the new MMPRs were unconstitutional, for one reason or another, and seeking to preserve the application of the prior regime, permitting personal use production of medical marijuana.

12On March 21, 2014, Mr. Justice Manson of the Federal Court issued an interlocutory injunction in the matter of Allard et al. v. Her Majesty the Queen (Canada), above, (the “Allard injunction"). That injunction exempted certain persons from the repeal of the personal production provisions of the MMAR, if they met certain conditions. Those conditions were that (a) they possessed a valid ATP to possess marijuana on March 21, 2014; and (b) they possessed a valid PUPL license on September 30, 2013. The Allard injunction also modified the terms of the preserved ATPs, by limiting the quantity of marijuana, which could be possessed by the license holder, to 150 grams.

13Without getting into its complexities, it will suffice for present purposes to say that the Allard litigation continues. Mr. Justice Manson is not the trial judge. The trial was presided over by Mr. Justice Phelan. His decision is now expected sometime this autumn. Already, however, it is understood that the parties have apparently been asked to make further submissions on some refined points. From there, there is little doubt that the matter will proceed to be considered by the Federal Court of Appeal regardless of who wins at trial, and from there it is expected that the matter will ultimately proceed for final determination by the Supreme Court of Canada. So plainly, it is going to be some time until the final determination is made of the constitutionality and parameters that govern these regulations and Mr. Zheng in this matter, and whether he does or does not fall within the class of excepted persons embraced by Manson J.’s injunction in Allard.

14Interestingly, the class of excepted persons carved out from the application of the new regime by reason of the injunction was not itself clear, at least initially. There were four plaintiffs in that case: Neil Allard, Tanya Beemish, David Hebert and Shawn Davey. After the injunction was granted, it remained unclear about whether the injunction was meant to apply to all four of them, or to only two, or indeed whether by analogy it applied to all of the 300 odd litigants who had commenced similar actions challenging the constitutionality of the new medical marijuana regulations (MMPR), or whether it simply applied to the specific litigants named in that decision itself, that is, Messrs. Allard, Hebert and Davey and Ms. Beemish.

15The Federal Court of Appeal asked Manson J. to clarify that matter in its appeal decision dated December 15, 2014.⁶ It remitted the matter “back to Justice Manson for determination solely on the issue of the scope of the remedy, more particularly with respect to Ms. Beemish and Mr. Hebert, in accordance with these reasons.”

16Initially, as reflected in paragraphs 3 and 4 of the order issued in the original injunction, the scope of the relief was stated as follows:

3. The Applicants who held, as of September 30, 2013, or were issued thereafter a valid Personal-use Production Licence pursuant to section 24 of the Marihuana Medical Access Regulations, or a Designated-person Production Licence pursuant to section 34 of the Marihuana Medical Access Regulations, are exempt from the repeal of the Marihuana Medical Access Regulations and any other operation of the Marihuana for Medical Purposes Regulations which is inconsistent with the operation of the Marihuana Medical Access Regulations, to the extent that the Designated-person Production Licence or Personal-use Production Licence held by the Applicant shall remain valid until such time as a decision in this case is rendered at trial and subject to the terms of paragraph 4 of this Order;

4. The terms of the exemption for an Applicant who held, as of September 30, 2013, or was issued thereafter a valid Personal-use Production Licence pursuant to section 24 of the Marihuana Medical Access Regulations or a Designated-person Production Licence pursuant to section 34 of the Marihuana Medical Access Regulations, shall be in accordance with the terms of their licence, notwithstanding the expiry date stated on that licence;

17When the matter was remitted back to him for clarification, Manson J. stated as follows in his clarifying Endorsement of December 30, 2014:⁷

1 The Plaintiffs request a reconsideration of my decision of March 31, 2014, to:

(i) order that all patients that held a valid Authorization to Possess (ATP)

on March 21, 2013 or, in the alternative, September 30, 2013, are covered

by the Exemption Order I made, and to

(ii) order that all patients exempted by the Order, including Mr. Hebert

and Ms. Beemish, and others similarly situated, can change their address

form with Health Canada, pending trial.

2 As stated above, the Federal Court of Appeal remitted the issue of the scope of the interlocutory injunction for clarification only, to specify whether the injunction applied to Ms. Beemish and Mr. Hebert. There is no reconsideration to be made and certainly no expansion of the scope of my decision to apply to anyone other than the plaintiffs in the proceeding.

3 In considering the balance of convenience, I specifically chose the relevant transitional dates of September 30, 2013 and March 21, 2014, to limit the availability of the injunctive relief to extend only to those individuals who held valid licenses to either possess or produce marijuana for medical purposes as of those relevant dates.

4 Accordingly, only those plaintiffs who had a valid license on September 30, 2013 could continue producing marijuana for medical purposes, and only those plaintiffs who held a valid authorization to possess marijuana for medical purposes at the time of my decision on March 21, 2014 could continue to so possess.

5 In considering the balance of convenience, the remedy I granted was intended to avoid unduly impacting the viability of the Marijuana for Medical Purposes Regulations (MMPR) and to take into consideration the practical implications of the Marijuana Medical Access Regulations (MMAR) licensing regime no longer being in force.

6 Given that Ms. Beemish did not possess a valid license to possess on March 21, 2014 (the license having expired on January 4, 2014) and that Mr. Hebert could no longer renew his designated production license (having moved residence on October 30, 2013) neither Ms. Beemish nor Mr. Hebert were covered by the injunctive relief granted. The fact that they did not possess valid licenses as of the transitional dates was determinative of their inability to be covered by the injunctive remedy granted. (my emphasis)

18However, this is not the end of the story, for it appears that the position put forward by Mr. Justice Manson and his clarification order is more restrictive than the position being put forward by either counsel on this application. Importantly, Manson J. responded to the Federal Court of Appeal by specifying, as they requested, simply whether the injunction applied to Ms. Beemish and Mr. Hebert. As he points out in paragraph 2 of the subsequent Order, "there is no reconsideration to be made and certainly no expansion of the scope of my decision to apply to anyone other than the plaintiffs in the proceeding.” Of course those plaintiffs were Neil Allard, Tanya Beemish, David Hebert, and Shawn Davey. They did not include Zhong G. Zheng or any of the other litigants who challenged the constitutional validity of the new regime.

19It was then left to Health Canada to try and provide some clarification and certainty about what it would permit while the ongoing litigation sorted itself out. It did that by releasing a statement on March 28, 2014. That date is important because it is three days before the expiry and final repeal of the earlier MMAR and their final replacement by the new MMPR medical marijuana regime. That press release reads as follows:

As a result of ongoing litigation and uncertainty arising from court decisions, Health Canada will treat the following Authorizations to Possess, Personal-Use Production Licenses, and Designated-Person Production Licenses as extending beyond March 31, 2014 until a decision in Allard is rendered. As per the Federal Court interim injunction, the following criteria must be met:

• individuals must have held a valid Authorization to Possess under the MMAR on March 21, 2014.

• individuals must have held a valid Personal-Use Production License or Designated-Person Production License under the MMAR on, or after, September 30, 2013, where there is also an associated valid ATP as of March 21, 2014.

Analysis and Conclusion

20There is no question here that Mr. Zheng had a valid PUPL on September 30, 2013. As such, since there is still no final decision in the Allard litigation, defence counsel contends that his license is still valid, and insists on this construction, notwithstanding that Mr. Zheng’s ATP, that is, his authority to possess medical marijuana, expired prior to the injunction date of March 21, 2013 stipulated by Justice Manson.

21It is plain on the face of his authority to possess that Mr. Zheng was only entitled to possess medical marijuana until the date of February 20, 2013. There was nothing that was done in the decision of Justice Manson that breathed new life into his expired ATP. If Mr. Zheng had still had a valid ATP on March 21, 2013, the applicable date of the injunction, and his PUPL had been extended by the language used by Justice Manson to continue as valid after September 30, 2013, then it would appear that there would be no foundation for the Crown to challenge Mr. Zheng’s right to at least continue to grow medical marijuana at the premises on Melford Drive under the terms of that license.

22Here, however, the circumstances are different. Indeed, noting that Manson J. specifically stated that there was nothing in the injunction that he granted that applied generally to the whole group of applicants who might have been challenging the constitutionality of the medical marijuana regime, but rather that the injunctive relief he granted only applied to two out of the four named litigants in the Allard litigation, that is Neil Allard and Shawn Davey, it was equally plain that his injunction would not have applied to Mr. Zheng. This is evident from the clarifying order made by Manson J. at the request of the Federal Court of Appeal.

23In that order, Manson J. was specifically requested to advise whether or not the relief granted to Messrs. Allard and Davey was meant to extend to Ms. Beemish and Mr. Hebert. It seems to me that Mr. Zheng was in exactly in the same position as Ms. Beemish, as referred to in paragraph 6 of that clarifying Order. Manson J. stated that Ms. Beemish did not benefit from the injunctive relief because she did not possess a valid license to possess medical marijuana on March 21, 2014, the license having expired on January 4, and her designated marijuana producer, her common-law spouse, Mr. Hebert, could no longer renew his designated production license because they had moved their residence.

24One of the limitations on the injunction was that no terms of any of the licenses could be amended after September 30, 2013. As a result, as Manson J. indicates as paragraph 6, neither Ms. Beemish nor Mr. Hebert were covered by the injunctive relief granted. Neither, in my view, on its face, is Mr. Zheng covered by the injunctive relief granted relative to the circumstances of his license and the expiry of his authority to possess on February 20, 2014, almost exactly one month before the injunctive relief granted by Manson J. in the Allard case.

25Neither, can Mr. Zheng benefit from the expanded administrative position announced by Health Canada because he did not have a valid authorization to possess under the MMAR on March 21, 2014, and even if he did have a valid PUPL after September 30, 2014 because the life of that license was extended by the decision rendered by Justice Manson, there was no associated ATP as of March 21, 2014.

26Counsel for the defence claims that it is counterintuitive and contrary to the scheme and spirit of the medical marijuana regime to limit Mr. Zheng in this way and to not include him within the group of people that may benefit from the administrative position announced by Health Canada. However, it is plain on its face that he cannot benefit from the injunction issued by Justice Manson, since the issuing Justice himself has made clear that the injunction applied only to the four named individuals, and indeed that it provided injunctive relief to only two of them, neither of whose circumstances were the same as Mr. Zheng.

27Whether constitutional challenging litigation will ultimately determine that the old MMAR regime prevails and that the new MMPR regulations are unconstitutional remains to be seen. However, it was certainly within the power of the legislature to change the nature of the regulatory regime which would govern the availability of medical marijuana for patients across Canada, and it seems to me that there is nothing on the face of the new regime itself which does not recognize that there are individuals across Canada who are in need of medical marijuana to treat various afflictions. The new regulation specifically recognizes this: it simply limits the available sources and provides that personal production is no longer permitted.

28It will only be permitted for that limited group of people who fall within the range of parameters established in the injunction issued by Manson J., or the expanded administrative position issued by Health Canada in the wake of that injunction, and pending the ultimate determination of the constitutionality issued by the Federal Court of Appeal and probably ultimately the Supreme Court of Canada in due course. In the meantime, I am satisfied that Mr. Zheng does not have the right to produce his own marijuana for medical purposes. He has the right to consume marijuana as has been stipulated by his doctor; marijuana that he has the right to obtain from any of the three permitted sources now set out in the new regulations. However, he does not have the right to continue to cultivate and produce that marijuana on his own.

29Accordingly, the application for a term varying the recognizance to include permitting Mr. Zheng to produce his own marijuana at 50 Melford Drive is dismissed.

Michael G. Quigley J.

Footnotes

1. 1[2014] F.C.J. No. 412, 2014 FC 280 (F.C.C.)
2. 2See Health Canada Report, September 15, 2014, Respondent’s Record, Tab 4.
3. 3MMPR, ss. 3(2)
4. 4See ss. 4(2)(b) and 11 of the MMAR.
5. 5See ss. 26-26 MMAR.
6. 6[2014] F.C.J. No. 1241, 2014 FCA 298 (F.C.A.)
7. 7[2014] F.C.J. No. 1332, 2014 FC 1260 (F.C.C.)