This Part 2 of addictive products (alcohol, cannabis and tobacco) regulation will focus on national reference regulation covering regulatory measures for demand reduction, supply reduction and harm reduction in both alcohol and tobacco regulatory frameworks. National reference regulation for cannabis regulation will be addressed separately at the end to highlight the range of regulatory controls of the, usually new, regulatory framework. This is in contrast to most alcohol and tobacco control regulation which amends legacy legislation.

In our 2018 articles on alcohol and tobacco control regulations, we outlined national reference regulation covering the following regulatory techniques:

Alcohol

• regulating a minimum unit price per gram of alcohol, which prevents selling alcohol cheaply, which encourages over consumption of alcohol;
• regulating drinking alcohol guidelines so consumers can make more informed choices about the effects of alcohol consumption;
• harm reduction through drink-driving education and counter-measures;
• regulating supply of alcohol through state-run monopolies reducing profit incentive to encourage sales and alcohol consumption;
• regulating minimum legal drinking age, to delay commencement of alcohol consumption;
• regulating alcohol marketing;
• regulation requiring compulsory training for responsible sale of alcohol products; and
• establishing monitoring and surveillance frameworks on alcohol consumption and alcohol-related harm, including a system for exchange and dissemination of information.

Tobacco

• regulatory provisions for protecting public tobacco control health policies from vested interests against controls;
• price and tax measures;
• protection from exposure to tobacco smoke by prohibitions on smoking in certain areas;
• regulating contents of tobacco products and tobacco product disclosures, including provisions regulating the maximum allowable limits for tar, nicotine and carbon monoxide;
• packaging and labelling, requiring plain packaging for all tobacco products;
• education, communication, training and public awareness;
• prohibiting tobacco advertising, promotion and sponsorship;
• track and trace regulatory systems; and

• regulating Electronic Nicotine Delivery Systems and Electronic Non-Nicotine Delivery Systems (ENDS/ENNDS).

This howtoregulate article will provide an update on some of these techniques, as well as regulatory measures for demand, supply and harm reduction. There is no one regulatory measure that is a silver bullet in regulating addictive products. A holistic approach, using a number of the regulatory techniques that restrict demand, supply and harm of ACT products will be effective so long as the measures are enforced, monitored and evaluated. For example restricting sales in particular areas will only be effective if there is enforcement, if retailers do not see enforcement activity the threat of losing the licence to sell will not cause behavioural change.

A. Regulatory measures for demand reduction

I. Sales prohibition

1. Outright prohibition of sales of alcohol and tobacco products can be very effective depending on the social and cultural context in which such regulation is enforced. Sales prohibitions are more commonly used in alcohol regulation than in tobacco regulation. For example many muslim majority countries (eg. Kuwait) have successful regulations banning alcohol sales (evidenced by lowest prevalence of recorded alcohol consumption¹), including countries where internal states have prohibited sales, while neighbouring states have not (eg. Gujarat, India). Sales prohibitions can be permanent or temporary but in the context of demand reduction, we are concerned here with permanent prohibition as that theoretically affects demand, assuming that measures to control illicit trade are effective. Temporary sales restriction are examined under Part B regulatory measures for supply reduction.

2. Bhutan is the only state that has banned tobacco sale in its Tobacco Control Act 2010 noting the harmful effects of tobacco smoking not only on health but also on Gross National Happiness and spirituality (outlined in the Act’s Preamble). Chapter 2 of the Act has a list of non-smoking public places, including: commercial centres, recreation centres, institutions (including, those in the private sector, monasteries, health, educational, religious and training centres and their vicinity), public gatherings / spaces (vegetable markets, bus and taxi stands), public transportation, and any other public places or areas as may be declared by the Tobacco Control Board. The person-in-charge of the respective non-smoking public places is required to do the following:

• “shall display notices indicating smoking is prohibited in the area” (Section 4);
• “shall supervise and carry out measures to ensure that no person smokes” in prohibited areas (Section 5);
• “shall request [the offending smoker] to refrain from smoking” and if the smoking continues to demand the offending smoker to leave the area (Section 6); and
• where the offending smoker refuses to stop smoking or leave, the person-in-charge shall report to a law enforcement officer and allow s/he to inspect the area (Sections 7 and 8).

3. Chapter 3 regulates the trade and commerce of tobacco products and Section 11 provides that “no person in the country shall: (a) cultivate or harvest tobacco, (b) manufacture, supply or distribute tobacco and tobacco products, and sell and buy tobacco and tobacco products. A person may import tobacco and tobacco products for personal consumption (Section 12 of the Act) and Chapter 3 of the Tobacco Control Rules and Regulations 2013 regulates the following:

• permissible quantity and type for importation for personal consumption only, a person shall not import tobacco or tobacco products on behalf of another person,
• authorised ports of entry;
• sales tax for imports from particular countries eg. India;
• sales tax and customs duty from other countries eg. other than India;
• exemptions for diplomats and consular officials;
• record keeping of tobacco products imported, including identification of the person importing;
• confiscation of excess amounts of products;
• prohibiting importation of tobacco and tobacco products not in the correct form eg. requirements to show country of origin and health warning, show printed labels about the products constituents and emissions and to not promote any false or misleading impressions about its characteristics, health effect etc.; and
• reporting eg. Department of Revenue and Customs shall submit a quarterly report on the import of tobacco and tobacco product for personal consumption to Bhutan’s Narcotic Control Agency.

This link to the tobacco control rules of Bhutan provides additional details.

II. Advertising, sponsorship and promotion

4. Although tobacco advertising, sponsorship and promotion prohibition is a mainstream regulatory obligation as per the international Framework Convention on Tobacco Control, in alcohol regulation very few jurisdictions prohibit such activity by alcohol economic operators. Lithuania joined a small cohort of jurisdictions² regulating a near-total ban on alcohol advertising, including a full ban on TV, radio, and digital ads, which came into effect in 2018. The 2017 amendment to the Law on Alcohol Control (No. XIII-394)created Article 29 Prohibition of alcohol advertising:

“(1) Alcohol advertising is prohibited in the Republic of Lithuania.

(2) Advertising shall not be construed as information on alcoholic beverages in information messages intended exclusively for professionals in the alcohol business, nor in undertakings which manufacture or market alcoholic beverages, Registered names of European legal persons or their subsidiaries (if the name of the producer of alcoholic beverages is an integral part of the registered name of these companies, European legal persons or their subsidiaries) and trademarks where these names and trademarks appear on signs on these companies, European legal persons or their subsidiaries the building of the head office or branch of the branches and the managed transport. Advertisements shall not be considered as registered names or trademarks of companies producing or selling alcoholic beverages, European legal entities and their subsidiaries, when these names or trademarks appear irregularly and unexpectedly in programs broadcast or retransmitted by broadcasters and retransmitters under the jurisdiction of the Republic of Lithuania. images are side effects,

(3) Compliance with the requirements set forth in this article shall be monitored by the Department of Drug, Tobacco and Alcohol Control.”

Article 1 amendment of Article 28 of the Alcohol Control Law prohibited: discounts for coupon holders, distribution of samples of alcoholic beverages, competitions or lottery where alcohol was involved or promoted or offered as a prize and to sell specialised advertising publications printed in Lithuania or in foreign countries, imported into Lithuania, intended to promote the sale of alcoholic beverages;

III. Packaging and labelling

5. Unlike tobacco control regulations, there are few examples of jurisdictions regulating packaging and labelling of alcohol products. Mexico’s alcohol labelling regulation (Official Standard Rule NOM-142-SSA1/SCFI-2014 for Alcoholic Beverages) requires the following mandatory information on labels for alcoholic beverages:

• Name and trademark of the product. The common name of the product may be used.
• Name, company name and domicile for tax purposes.
• Name, company name and domicile for tax purposes of the entity responsible for importation. With imported products, the practice is to provide the information of the local distributor, ie, the company that will be responsible for observing the labelling requirements.
• Country of origin, including captions such as “Made in XXX”.
• Batch number and “Best-before” date.
• Alcohol content and list of ingredients, including the following ingredients which must always be declared: cereals containing gluten, eggs, peanuts, soy, milk, tree nuts and derivatives.
• Cautionary notes, such as “Excessive consumption of this product may be bad for human health”.
• Inclusion of new symbols seeking to discourage alcohol abuse, underage drinking, alcohol intake by pregnant women and drink-driving situations. These symbols must be included on the individual labels as well as all forms of packaging, according to the regulated specifications about presentation of these symbols, such as size, colour and appropriate circumstances of use for each symbol.

• The capacity of each container for end-consumer sale must not exceed 5 litres.
• Bottles must have a tracking code.

6. Since November 2019, Lithuania (Article 1 amendment of Article 28 of the Alcohol Control Law) prohibited to manufacture and to sell food, toys, and other goods for children and adolescents whose designs mimic alcoholic beverages and/or their packaging (eg. a ban of champagne for children).

IV. Removing duty concession for tobacco

7. Brunei’s Customs Import Duties (Amendment) Order 2010 and Excise Duties (Amendment) Order 2010removed cigarettes and tobacco from the Passenger’s Concession (Personal Effect). Sri Lanka also removed duty-free status of cigarettes by including tobacco and cigarettes on the schedule of goods of the Excise (Special Provisions) Act.

B. Regulatory measures for supply reduction

I. Physical availability controls

1. Regulations that aim to control the physical availability of alcohol and tobacco products influences how, when, where, and the amount such products are consumed by individuals and the broader communities in which they live, work and recreate. In terms of alcohol control, when alcohol availability increases, alcohol-related harms will also increase, and when alcohol availability decreases, alcohol-related harm will decrease.³

2. Several jurisdictions developed emergency regulations banning the sale of tobacco, tobacco products and alcohol in response to the COVID-19 pandemic. Tobacco sale bans were informed by medical studies that found “the odds of a COVID-19 case becoming more severe and leading to death are higher among people with a history of smoking”⁴.

(a) South Africa banned alcohol and tobacco sales as non-essential items during the COVID lockdown period by authority designated under the Disaster Management Act (57/2002, Section 3) to amend regulations issued under Section 27(2) concerning declaration of national state of disaster.

“(2) If a national state of disaster has been declared in terms of subsection (1), the Minister may, subject to subsection (3), and after consulting the responsible Cabinet member, make regulations or issue directions or authorise the issue of directions concerning-̶

[ (a) …; -̶ (e) …;]

(f) the regulation of the movement of persons and goods to, from or within the disaster-stricken or threatened area;

[ (g) …; -̶ (h) …;]

(i) the suspension or limiting of the sale, dispensing or transportation of alcoholic beverages in the disaster-stricken or threatened area;

[ (j) …; -̶ (m) …;]

(n) other steps that may be necessary to prevent an escalation of the disaster, or to alleviate, contain and minimise the effects of the disaster; or [ (o) …].”⁵

Annexure B lists the essential goods and services that may be sold during lockdown, which excludes alcohol and tobacco. Annexure C contains the form that personnel employed to perform essential services must carry and have authorised when they travel to and from the essential service. Annexure D lists the places and premises closed to the public: “(b) any place or premises normally open to the public where goods other than essential goods are procured, acquired, disposed of or sold”. The regulation focussed on retail sales and so it is unclear whether this prohibited tobacco sale at physical outlets only or included online retail as well.

(b) The Emergency Powers (COVID-19) (Amendment) Regulations, 2020 of Botswana explicitly prohibited the importation or sale of tobacco (Section 30A).

Section 21 closed all liquor stores, which effectively restricted alcohol sales.

II. Restrictions on sales locations

3. Lithuania has implemented stricter alcohol control regulations in response to its status as one of the countries with the highest alcohol consumption.⁶ The primary legislation regulating alcohol control is the Law on Alcohol Control where several restrictions on sales locations were introduced (Article 22), including banning sales:

• in health care, education, sports facilities and their territories;
• in front of prayer buildings (within a distance determined by the municipalitie4s together with religious communities);
• in shops selling children’s merchandise;
• from vending machines;
• from petrol stations and on roadsides;
• on the beach and during the holiday, recreation and tourism season by abolishing seasonal licences to sell alcoholic beverages; and
• in pavilions through more stringent control of night-time off-premise retail.

Outdoor alcohol retail was restricted to a 40 metre radius from the vendor building, and expanded rights for municipalities to issue additional restrictions (applicable to catering establishments).

4. In many states of Australia alcohol control laws empower municipalities or the central authority, in consultation with concerned communities, to implement temporary sales restrictions in areas with problematic alcohol consumption (‘dry communities’). The Liquor Control Act 1988 of Western Australia(WA) enables liquor (alcohol) restrictions in remote WA communities as a measure to reduce the level of harm caused by alcohol consumption. Section 175(1a) of the Liquor Control Act enables the Governor, on the recommendation of the Minister for Racing and Gaming, to declare an area of WA a restricted area that prohibits the bringing in, possession and consumption of liquor in the declared area.⁷ If a person commits an offence against the regulations, a penalty of between $2000 and $5000 applies. Police have the necessary powers to seize and dispose of opened or unopened containers of liquor that are brought into the restricted area illegally. Section 64 empowers the Director of Liquor Licensing, where it is in the public interest, to impose conditions on licensees restricting the sale and supply of liquor from licensed premises.⁸ A condition may include a limitation, prohibition or an authorisation on any licence or permit and can relate to any aspect of business carried out under the licence, or any activity that takes place at the licensed premises.

III. Rationing

5. Australia reduced the amount (see Regulation 4DA of the Customs (Prohibited Imports) Regulations) of duty-free tobacco a traveller may bring in to:

• one unopen packet of up to 25 cigarettes or 25 grams of other tobacco products; and
• one open packet of cigarettes.

If a person brings in tobacco s/he must:

• declare any tobacco above the duty free allowance; and
• pay all relevant duty and taxes that apply on arrival into Australia.

If a person brings in more tobacco than the duty free allowance, s/he will need to pay duty on all of the tobacco brought in, not just the amount above the allowance. A person that does not declare the tobacco they have with them above the duty free allowance, might be prosecuted or have their visa cancelled. Duty free allowances apply to visitors, Australian residents, Airline or Ship Crew Members.

IV. Tackling illicit trade in tobacco

6. In mid-2018 Australia introduced its ‘Black Economy Package – combatting illicit tobacco’, to strengthen its regulation to tackle illicit trade in tobacco. The Package concerns the following amendment acts:

• Treasury Laws Amendment (Illicit Tobacco Offence) Act 2018, which amends the Excise Act 1901, Income Tax Assessment Act 1997 and the Taxation Administration Act 1953; and
• Customs Amendment (Illicit Tobacco Offences) Act 2018, which amends the Customs Act 1901.

7. The Treasury Laws Amendment includes the following measures:

• a new tobacco offence regime with a comprehensive set of offences applied to illicit tobacco that: (a) has been domestically manufactured or produced; or (b) for which the origin of production or manufacturing is unknown or uncertain;
• new offences for possession of equipment for producing or manufacturing illicit tobacco;
• setting penalties at a level to deter illegal activity;
• confirmation that illicit tobacco for which the origin of production or manufacturing is unknown or uncertain can be seized and forfeited; and
• a tobacco definition that aligned the meaning for excise and excise-equivalent customs duty purposes to ensure the amount of duty on dutiable products is determined in a consistent manner.

Tobacco includes tobacco leaf, tobacco plant, tobacco seed and “any thing (including moisture) added to the tobacco leaf during manufacturing or processing”. This comprehensive definition of tobacco captures illicit tobacco activity at any stage of the supply chain, from farm to smoker.

8. Illicit tobacco is a reference to tobacco in Australia:

• for which excise or excise-equivalent customs duty has not been paid; and
• which is not kept or stored at premises specified in an excise or customs licence, for which a person does not have a movement permission or a permission to warehouse, which is not held under permission under the Excise Act and which has not been entered for home consumption within the meaning of the Excise Act.

Intentional possession, manufacture or production of illicit tobacco is a criminal offence and is subject to the following penalties:

• 500 kg or more — ten years imprisonment, or the higher of 1,500 penalty units or five times the amount of duty on that tobacco, or both;
• 100 kg or more — five years imprisonment, or the higher of 1,000 penalty units or five times the amount of duty on that tobacco, or both; or
• 5 kg or more—the higher of 500 penalty units or five times the amount of duty on that tobacco.

Possession of illicit tobacco that equals or exceeds 2 kg, without documentation indicating how the person obtained the tobacco is liable to a civil penalty. It is also an offence to possess equipment for illicit tobacco production and manufacture, which in addition to forfeiture, incurs a criminal offence with a penalty of one year imprisonment or 120 penalty points.

9. The Customs Amendment includes the following measures:

• Imposing duty on imported tobacco earlier in the supply chain. Previously importers could defer timing of customs duty applied to imported goods (such as alcohol and tobacco) by transferring them to a licensed warehouse (Section 79 Customs Act). The customs duty was payable when the goods were transferred out of the warehouse for domestic sale or export, sometimes goods were stored indefinitely. Since 1 July 2019, customs duty applies to tobacco products as soon as they are imported, removing the ability of tobacco importers to defer taxation using warehouse arrangements.
• For tobacco products which have been imported but which are being stored in a licensed warehouse as at 1 July 2019, the importer had one year to pay the customs duty amount. This applied to all imported tobacco products stored in warehouses, including legally imported products.
• Setting penalties at a high level for defrauding Australia of revenue that would otherwise be raised through customs duty to deter illegal activity.

10. The remaining measures in the Black Economy Package outlined in 2018-2019 Budget Papers No. 2include:

• the creation of a cross-agency Illicit Tobacco Task Force (ITTF) to allow for enhanced cooperation in tackling illicit tobacco trade and prosecuting organised crime groups. The new Task Force will have additional powers and capabilities to enhance intelligence gathering and proactively target, disrupt and prosecute serious and organised crime groups at the centre of the illicit tobacco trade;⁹
• providing additional resources to the Tax Office to detect and destroy domestically grown illicit tobacco crops;
• making manufactured tobacco products a restricted import from 1 July 2019, requiring a permit¹⁰ from the Department of Home Affairs to import them (see Regulation 4DA of the Customs (Prohibited Imports) Regulations); and
• upgrading the Tax Office’s payment systems infrastructure for customs duties.

VI. Licensing to control the alcohol and tobacco supply chain

11. A good licensing regime clearly defines what is regulated, who is regulated and how they are regulated so that controls on licensees and their addictive e products are effective. Effective licensing of the growing, manufacturing, production, distribution and retail parts of the alcohol and tobacco supply chain will enhance state control of supply, and in turn consumption of these addictive products, and reduce illicit trade.

(a) Growing, manufacturing, producing and distributing tobacco

12. In response to the growing illicit trade in tobacco, Australia updated its licensing regulation of tobacco (Excise Act 1901) as an excisable good and imposes controls in three main areas:

• grow, deal in and move tobacco seed, plant and leaf;
• manufacture, store and move ‘excisable tobacco products’¹¹; and
• payment of duty for excisable tobacco products.

The production, storage and movement of excisable tobacco products such as cut tobacco and cigarettes is controlled by the granting (or refusal) of licenses to manufacture or store excisable tobacco on which the duty has not been paid and various permissions to move them or deliver them into home consumption.¹²Although tobacco seed, plant and leaf are not excisable goods, the Excise Act has special provisions to control them as if they were excisable goods (Section 44). There are four licence types:

• Producer licence: enables the licensee to produce tobacco seed, plant or leaf; the specific type of produce (includes all the activities of growing tobacco plants such as germinating seeds, growing seedlings, planting out, harvesting seeds for future seasons and harvesting the leaves, up to and including curing the leaf as stripped from the plant) must be specified in the licence; and tobacco seed, plant or leaf grown for personal use also requires a producer licence. The producer licence also allows the licensee to sell tobacco seed, plant or leaf produced to: licensed dealers, licensed manufacturers, or other licensed producers. Conditions may be imposed on a producer’s licence including requirements around storage and in relation to persons participating in the business.
• Dealer licence: enables the licensee to deal (buy, sell, store, distribute and import) in tobacco seed, plant or leaf and the premise where these dealings are to take place must be specified in the licence. The dealer licence also allows the licensee to buy from and sell tobacco seed, plant or leaf produced to: licensed producers, licensed manufacturers, or other licensed dealers. Conditions may be imposed on a dealers’ licence including requirements around storage and in relation to persons participating in the business.
• Manufacturer licence: to manufacture excisable tobacco products, a person is required to be a licensed manufacturer and the goods are manufactured at licensed premises in accordance with the conditions specified in the licence. Threshing tobacco leaf, conditioning, blending, cutting and making tobacco products are considered tobacco manufacture activities. Licensed manufacturers do not also need a storage licence to to store goods manufactured at the licensed premises. The licensee may sell tobacco leaf to a licensed dealer or another licensed manufacturer.
• Storage licence: enables the licensee to store under bond excisable tobacco products (whether owned by the licensee or someone else). A licensed manufacturer will require a storage licence where they wish to store their excisable tobacco products under bond at a place that is not specified in their manufacturer licence. A wholesaler and distributor of excisable tobacco products also requires a storage licence. A storage licence specifies the type of excisable tobacco products and the location and also specify the activities, if any, to be undertaken in relation to those goods, for example re-packaging. The licence may also specify whose excisable goods can be stored, for example it could limit it to goods the licensee owns, or to goods owned by certain people.

13. All approved licence holders are responsible for the secure storage of all tobacco and excisable tobacco products under the licensee’s control and only at premises specified in the licence. In the case of licensed manufacturers, this includes stalks, refuse, clippings or waste arising from the manufacturing process. If any tobacco leaf is lost, the licensee may be liable to pay an amount equivalent to the duty that would have been payable had that tobacco leaf been manufactured into tobacco products. The licensee may also be responsible for paying an amount equal to the excise duty that would have been payable on any stolen, missing or unaccounted for excisable tobacco products. The Act enables the authority to take stock of excisable tobacco products manufactured and the materials used in the process and if it appears that not all of the duty that should have been paid has been paid, the difference must be paid by the licensee. If a licensee wishes to destroy any excisable products, permission must first be obtained from the authority. All licence holders must seek approval from the authority to move tobacco or tobacco excisable products. In the case of tobacco leaf movements from the place specified on the licence, the tobacco leaf bale must have a label attached at all times that the tobacco leaf is not at a licensed place. Licensed manufacturers and storage licenses have additional requirements, including:

• ensure tobacco products are only delivered into the Australian domestic market with appropriate authority;
• pay the correct amount of excise duty; and
• manufacturer licensees must provide all reasonable facilities to enable the authority to exercise its powers, and provide sufficient lights, correct weights and scales, and all labour necessary for weighing material received into premises outlined in the licence.¹³

14. Noting the many requirements for licensees to follow, the authority also requires robust empowerments to verify conformity with licence conditions and the Act. The authority has the following empowerments:

• the right to inspect the licensed premises at any time and examine and take account of all the goods at the premises;
• stopping any vehicles leaving the licensed premises and check the proper documentation for tobacco or tobacco products leaving the premises, including questioning the driver, directing the vehicle be unloaded and the products taken to parts of the premises for further examination;
• stopping and searching any vehicles (not just vehicles leaving a licensed premises) without a warrant if there are reasonable grounds for believing that the vehicles contains tobacco or excisable tobacco products and that the vehicle has been used, is being used or will be used in the commission of an offence under the Excise Act (and certain offences in the Crimes Act 1914 and the Criminal Code relating to accessory after the fact, attempt to commit an offence, aid and abet someone to commit an offence and conspiracy to commit an offence;
• open packages and examine, weigh, mark and seal any excisable tobacco products, if the licensee is a manufacturer, lock up, seal, mark or fasten any plant in or on the licensee’s factory;
• supervise the manufacture of excisable tobacco products; and
• take samples of materials, partly manufactured excisable tobacco products and excisable tobacco products subject to excise control, and tobacco products that we have reasonable grounds for suspecting are excisable tobacco products on which duty has not been paid.

(b) Tobacco retail and density

15. The US state of California attempted to limit tobacco sales to adult-only tobacco stores in its Bill SB 1400to amend the Cigarette and Tobacco Licensing Act but following tobacco industry lobbying the Bill was defeated. In the Bill it noted that “nearly all tobacco use begins in childhood and adolescence. In all, 88% of adult cigarette smokers who smoke daily, report that they started smoking by the age of 18”. This set of slides from the US Centre for Disease Control and Prevention Office on Smoking and Health concerning the “Importance. of reducing outlet density as a tobacco control strategy” has additional ideas on measures to reduce tobacco tobacco retail density eg. incentives for tobacco retailers to stop selling tobacco, licence buy-back schemes. Although no examples of licence buy-back schemes for tobacco or alcohol retail licences could be found this Australian government report examining the gun buy-back scheme implemented following the Port-Arthur massacre outlines several useful lessons learned and considerations.

16. The Canadian province of Ontario requires tobacco retail dealers to have a valid tobacco retailer’s permit belonging to the owner of the tobacco product for each location that tobacco products are sold. Tobacco retail dealers are subject to the following requirements of their permit:

• only buy tobacco products from Ontario-registered tobacco wholesalers. Retail dealers can see which wholesalers are registered by getting the current Tobacco Tax Registrant List;
• keep, at their principal place of business, records and books of account for all tobacco product purchases and sales for seven years;
• not sell tobacco products to a person less than 19 years old;
• require ID from anyone that appears to be less than 25 years old;
• post applicable health warning and age restriction signs; and
• sell legal packages of cigarettes and fine cut tobacco that are marked with the “ON DUTY PAID CANADA DROIT ACQUITTÉ” tobacco stamp.¹⁴

Applications for permits can be submitted online and permit holders can subscribe to receive e-alerts about tobacco tax and other topics via the Ministry of Finance website, all of which helps to increase conformity with permit regulations.

17. Retail dealers who repeatedly violate the Tobacco Tax Act (TTA) or the Smoke-Free Ontario Act (SFOA) may be subject to prohibitions under those Acts, including:

TTA

• two or more violations (any assessed penalty or conviction of an offence under the TTA) within a five year period may lead to a temporary ban from selling, offering for sale or storing tobacco products in that particular location;
• the temporary prohibition from selling may range up to 180 days, depending on the number and nature of the violations;
• a retail dealer under a temporary prohibition:
  • cannot sell, offer for sale or store tobacco,
  • will not get tobacco products from suppliers,
  • may have their name and store locations published on the Ministry of Finance website, and
  • must post signs in their store to notify the public of the prohibition.

• continuing to sell or store tobacco products while the retail location is subject to a temporary prohibition could result in penalties and fines ranging from $5,000 to $50,000, and all tobacco products at that location could also be seized.

SFOA

• a notice of prohibition is issued to the owner of a retail location by the Minister of Health and Long-term Care or his/her delegate informing of the prohibition of the sale, storage and delivery of tobacco products (commonly known as an automatic prohibition) for a specified period of time;
• such a notice will be issued when there are two or more convictions against the same owner for tobacco sales offences committed at the same place within a five year period;
• the prohibition may be for six, nine or twelve months, depending on the number of convictions during that five year period;
• automatic prohibition takes effect when there are two convictions against any owner of the business.

18. The Australian state of Western Australia requires the decision-maker to determine the suitability of an applicant when issuing and renewing a tobacco retail licence under Section 39 of the Tobacco Product Control Act, including whether:

“(a) the applicant has been refused, or disqualified from holding, a licence under this Act or a corresponding law; and

(b) the applicant is the holder of a licence, under this Act or a corresponding law, that is suspended; and

(c) the applicant has, at any time, been convicted of an offence under this Act, a corresponding law, or any legislation repealed by this Act; and

(d) the applicant has, in the 10 years before the application is made, been convicted anywhere in the world of an offence involving fraud or dishonesty; and

(e) the applicant is the subject of a pending charge anywhere in the world for an offence involving fraud or dishonesty; and

(f) the applicant is likely to carry on the activities of a licence holder honestly and fairly; and

(g) the applicant is a fit and proper person to hold a licence; and

(h) there is any other good reason for not issuing or renewing the licence.”

(c) Alcohol retail and density

19. Regulations aimed at controlling retailer density can be found in alcohol regulation, where it is often linked to unwanted behaviour associated with excessive consumption of alcohol.¹⁵ In our article on alcohol regulation, we looked at regulation controlling the availability of alcohol (see Part C, Section V). Scandinavian countries (Iceland – Law on Alcohol and Sweden – Alcohol Act) have low per capita alcohol consumption because of their state-run alcohol monopolies. Sweden’s government-owned liquor stores are expressly mandated to limit the harmful effects of alcohol. Noting that in most jurisdictions the major supermarkets sell either alcohol or tobacco or both, implementing regulation to reduce retail density would need to be implemented gradually perhaps eventually becoming state-owned tobacco stores. Lithuania’samendments to its Alcohol Control Law reduced retail density by taking out one of the major retailers, petrol stations (600 outlets stopped selling alcohol¹⁶). The amendments also reduced hours of sale, from 08:00-22:00 to 10:00 to 20:00 Monday through to Saturday. Sunday trading changed from 08:00-22:00 to 10:00 to 15:00. Municipalities were empowered to limit the alcohol sales outlets during commercial mass events [Article 16(3)].

20. Western Australia’s Liquor Control Act empowers municipalities to influence liquor decisions, which has the potential to influence retail density. Specific empowerments include opportunity to confirm or refute that liquor licensing applications comply with municipal legislative requirements (Section 39); or express any concerns about existing or proposed licensed premises through the Act’s objection, intervention or complaint process, and determine whether or not a liquor retail licence may be approved (Section 40). Such provisions were created because there was public confusion about who to contact regarding complaints about licensed premises, which resulted in municipalities not being aware of community or individual concerns about a proposed or existing licence, or liquor related issues.¹⁷

C. Regulatory measures for harm reduction

1. The difficulty with developing regulatory controls for alcohol and tobacco to meet the policy goal of reducing harmful consumption, is that these products are socially acceptable and have a long history of legal sale. Coupled with industry influence that range from sophisticated and subtle influences through to court challenges of regulations, the path to develop and implement regulation can be difficult. Implementing new regulatory controls particularly bans or prohibitions that are permitted from one day but not the next, understandably, creates friction between regulators and the economic operators and consumers. Regulatory measures for harm reduction can be a useful intervention because it does not involve taking something away that was previously enjoyed. Harm reduction measures in alcohol and tobacco control regulation focus on reducing the harmful contents in the product, not selling alcohol products to consumers who are already intoxicated and protecting harm reduction measures from industry influence.

I. Reducing harmful product content

2. Since January 2020, Lithuania’s Law on Alcohol Control banned alcoholic beverages stronger than 7.5% during public events came into effect [Article 16(3)]. By regulating maximum alcohol strength of alcoholic beverages at public events will help to slow the time it takes to over consume alcohol as well as the public disturbances created in the community as people leave the event. Evidently, such a measure does not stop over consumption by itself but coupled with enforcement of responsible sale of alcohol and training of staff, theoretically, intoxicated people would not be sold further alcohol.

II. Regulating harmful ingredients

3. Harmful ingredients such as alcohol and methanol provides an additional means of reducing harms associated with illegal and informal alcohol products. The UK’s Extraction Solvents in Food Regulations 1993 regulates toxicology and sales of both alcohol and methanol. Many people make their own alcohol be it brewing beer, winemaking or distilling their own spirit alcohol. Such activity should be monitored to determine their impact on alcohol control regulations. Evidently, small-scale (as do large-scale) brewers, winemakers or distillers have clear regulations about licensing their operations but those that make their own at home, often do not. In the UK, for example those that wish to make their own wine and beer do not have limits on how much they can make, the condition being that it is for personal consumption, at home only. It is prohibited to sell or gift alcohol made for personal consumption. Home distillation is regulated through a licensing framework laid out in the Spirits Regulation 1991, even if the intent is to personally consume the distilled spirits made. Distillation is risky due to the high flammability of vapours and liquid, which can be more than 90% pure ethanol, which is why a licence is required as well as the payment of spirits duty. Before commencing distillation the authority must:

• first approve the plant and processes to be used by the distiller;
• if the largest still to be used has a capacity of less than 18 hectolitres the authority can decline an application;
• following plant and processes approval, the authority must inspect the premises where the distillation will take place;
• once the distillation licence is approved the distiller must ensure that the plant and process is not varied, or where variation is required must apply for approval from the authority for any changes; and
• records are to be kept and quarterly distillery returns to be submitted to the authority.

D. Cannabis regulation

1. Although international law requires that cannabis cultivation, supply and possession be restricted to ‘medical and scientific purposes’. Efforts to legalise cannabis recreational use are on the rise as states respond to public calls for recognising the benefits of controlled cannabis use and reducing harm from criminalising cannabis possession. Whilst we have no view on the appropriateness of the legalisation of cannabis as such, cannabis legalisation presents a unique opportunity for jurisdictions to develop a regulatory framework with proven effective regulatory techniques from both alcohol and tobacco regulation.We also highlight interesting reference techniques developed in cannabis regulation for better regulatory controls of alcohol and tobacco. This is particularly useful as alcohol/tobacco-related harm and death is much worse than cannabis, and yet best-practice regulation for alcohol and tobacco control still lags in many jurisdictions. In some jurisdictions, cannabis control is better regulated and enforced than alcohol and tobacco control.¹⁸

2. Canada is the world’s largest federally legal adult-use cannabis market. The legalisation of cannabis in Canada followed a lengthy consultation process involving: experts, patients and advocates, employers and industry, provinces, territories and municipalities, indigenous governments and representative organisations, youth, public health organisations and the public generally. Canada’s Cannabis Act is an example of a complex, but thorough, regulatory framework. The policy objectives for regulating cannabis are made clear in Article 7:

“The purpose of this Act is to protect public health and public safety and, in particular, to

(a) protect the health of young persons by restricting their access to cannabis;

(b) protect young persons and others from inducements to use cannabis;

(c) provide for the licit production of cannabis to reduce illicit activities in relation to cannabis;

(d) deter illicit activities in relation to cannabis through appropriate sanctions and enforcement measures;

(e) reduce the burden on the criminal justice system in relation to cannabis;

(f) provide access to a quality-controlled supply of cannabis; and

(g) enhance public awareness of the health risks associated with cannabis use.”

3. The Cannabis Act legalises adults (18+ although provinces and territories may regulate a higher age) to:

• possess up to 30 grams of legal cannabis,dried or equivalent in non-dried form in public;
• share up to 30 grams of legal cannabis with other adults;
• buy dried or fresh cannabis and cannabis oil from a provincially-licensed retailer;
• in provinces and territories without a regulated retail framework, individuals are able to purchase cannabis online from federally-licensed producers;
• grow, from licensed seed or seedlings, up to 4 cannabis plants per residence for personal use;
• make cannabis products, such as food and drinks, at home as long as organic solvents are not used to create concentrated products; and
• produce and sell edible cannabis, cannabis extracts and cannabis topicals from licensed provincial or territorial retailers or federally-licensed sellers of cannabis for medical purposes.

Possession above the amounts regulated in the Cannabis Act or activities outside of what is legalised attract a criminal penalty on conviction (Division 1 Criminal Activities), see the summarised penalties table on theCanadian Department of Justice.

4. Division 2 of the Cannabis Act concerns other prohibitions representing best practice regulatory controls of the international Framework Convention for Tobacco Control, including prohibiting:

• the promotion of cannabis or a cannabis accessory or any service related to cannabis; exclusions exist for creative work (film, drama, literature, educational etc.) where the cannabis depiction is incidental, authorised cannabis distributors directly to another authorised cannabis distributer, an authorised cannabis seller may promote availability and price etc. (Subdivision A Promotion);
• packaging and labelling of cannabis to be appealing to young persons; association of cannabis or one of its brand elements with, or that which evokes a positive or negative emotion about or image of, a way of life such as one that includes glamour, recreation, excitement, vitality, risk or daring; or any information that is false, misleading or deceptive or that is likely to create an erroneous impression about the characteristics, value, quantity, composition, strength, concentration, potency, purity, quality, merit, safety, health effects or health risks of the cannabis (Subdivision B Packaging and Labelling);
• a person from displaying cannabis or its package or label or a cannabis accessory that may results in the cannabis, package or label being seen by a young person (Subdivision C Display); and
• sales and distribution of cannabis or a cannabis accessory that has an appearance, shape or other sensory attribute or a function that there are reasonable grounds to believe could be appealing to young persons is prohibited, selling a cannabis accessory to a young person is prohibited, it is not a defence that the seller or distributor believed the young person was at least 18 years of age unless reasonable steps were taken to ascertain the individuals’s age; vending machine sales (Subdivision D Selling and Distributing).

5. Division 3 of the Cannabis Act concerns the obligations of holders licences or permits issued under the Act, including: making available to the public information about cannabis as per regulatory requirements, and provide to the relevant minister information about any promotion or inducement information of cannabis or cannabis accessories that they conduct.

6. Canada’s ten provinces and three territories are responsible for developing their own regulations for sales and distribution of cannabis, and can add additional restrictions to the federal legislation, such as increasing the age of access. For example most have increased the minimum age of access to 19, with the province of Quebec setting the age at 21.¹⁹ The Quebec Act to constitute the Société québécoise du cannabis, to enact the Cannabis Regulation Act and to amend various highway safety-related provisions regulates sales and distribution of cannabis through a government-owned monopoly, a subsidiary of the state-owned Sociéte des alcools, Sociéte québécoise du cannabis (Section 23.2 of the Act respecting the Sociéte des alcools du Québec). The Quebec regulation aims to reduce the risks and harm to the health and safety of individuals by focussing on:

• protecting the health and safety of persons, in particular those of the most vulnerable groups, including young persons;
• preventing the initiation to cannabis use, particularly of teenagers, young adults and vulnerable groups of the population;
• promoting the integration of consumers into the legal market from the perspective that the regulated sale of quality-controlled products will reduce health risks; and
• ensuring road safety.

In order to meet this aim the Quebec regulation contains measures that control possession, use, cultivation for personal use, production, transportation and storage, promotion and advertising, sale, and characteristics of cannabis products.

7. In the province of Ontario, a government-owned monopoly (as created by the Ontario Cannabis Retail Corporation Act, 2017) was created for online sales and the exclusive wholesale of cannabis and its related products to authorised private retailers in licensed stores in Ontario. Retail licenses are not granted to applicants who have a history of involvement in organised crime, sales to minors or is involved in the illegal market after the legislation came into effect on 17 October 2018. Ontario created a dedicated team to process cannabis licensing and applications, which states that approval times may be longer where the applicant has a complicated corporate structure as each entity must be checked for eligibility. The following restrictions exist for retail stores:

• Cannot be located near a school or private school, as defined in the Education Act, if the proposed retail store is less than 150 metres away from the property line of the school.
• May only operate between the hours of 9:00 a.m. – 11:00 p.m. (Monday to Sunday).
• Must be located in a municipality that permits cannabis retail stores (as municipalities may restrict such stores).

8. Uruguay’s Law No. 19172 Regulation and Control of Cannabis allows legal access to cannabis in four ways: medical marijuana through the Ministry of Health, home-grown cannabis for personal consumption, membership clubs, and sales to registered persons over 18 with legal capacity with anonymised registration cards in pharmacies. The Institute for the Regulation and Control of Cannabis (IRCC), regulates the planting, cultivation, harvesting, production, processing, storage, distribution, and sale of cannabis. The aim of Law 19172 is to prevent over consumption of cannabis and educate the population about its harmful effects, while combating drug trafficking (Articles 1 and 2).

9. Law 19172 provides that the planting, growing, harvesting, and marketing of cannabis must be authorised by the IRCC (Article 18). The authority of the IRCC includes issuing licenses to produce, process, collect, distribute, and sell industrial and psychoactive cannabis; registering users and those engaged in self-cultivation; authorising cannabis club membership; monitoring compliance with the law; determining and adjudicating sanctions for violations; and enforcing the imposition of sanctions (Article 27).

10. Sanctions for violations of Law 19172 (Title IV) include warnings, fines, confiscation of goods or items, destruction of goods, suspension of the offender in the pertinent registry, temporary or permanent disqualification from transacting in cannabis, and partial or complete closure of establishments.

11. Law 19172 decriminalises anyone who possesses psychoactive cannabis plants in a reasonable quantity, exclusively for personal consumption. The maximum quantity considered for personal use is 40 grams and up to six cannabis plants with psychoactive effects kept, held, stored at home (Article 31), not exceeding 480 grams annually (Article 14). Home growers of cannabis are required to register with the IRCC and are not permitted to register more than one domicile for this purpose (Article 15).

12. Cannabis clubs are duly registered civil entities of no more than 45 members that are allowed to grow up to 99 cannabis plants in specific places (Chapter IV of Law 19172). Cannabis clubs that plant, cultivate, and harvest psychoactive cannabis for personal or shared domestic consumption are subject to the control of the IRCC, and must be authorised by the Ministry of Education and Culture. No member may access more than 480 grams per year. The cannabis yields of clubs must be recorded, with excess amounts turned over to the IRCC. Only Uruguayan nationals or foreigners with legal residence, older than 18 years of age may become members of these clubs. Both the clubs and their members must be registered in the Cannabis Registry within the IRCC. Identity information entered into the Cannabis Registry is anonymised and protected.

13. The IRCC also has the authority to issue licenses for the sale of psychoactive cannabis to pharmacies. Cannabis sold in pharmacies is produced by companies selected through national and international bidding. The government buys cannabis from these authorised producers and distributes the cannabis to licensed pharmacies. Licensed pharmacies may sell five gram packets of cannabis, rationed to a maximum of 10 grams per week, not exceeding 40 grams per month, to registered adults of 18 years of age, using fingerprint recognition, which enforces rations and registration identity of consumers. The production and supply of cannabis is regulated to have a low THC content (the psychoactive ingredient) balanced with the CBD content (its calming compound).

14. The price per gram of cannabis is controlled, which includes the tax revenue that funds the IRCC and public health and education campaigns. Article 11 of Law 19172 prohibits all forms of cannabis advertising, promotion or sponsorship.

Links

• Transform Drug Policy Foundation, How to regulate cannabis?, 2016 https://transformdrugs.org/publications/how-to-regulate-cannabis-a-practical-guide
• Website dedicated to tobacco control laws from 210 countries around the world: Tobacco Control Laws
• Information about Bhutan’s journey in banning the sale of tobacco: The Big Ban
• WHO FCTC Indicator Compendium
• WHO Tobacco control profiles – countries, territories and areas
• Henriksen, L., “Comprehensive tobacco marketing restrictions: promotion, packaging, price and place”,Tob Control. 2012 Mar; 21(2): 147–153.
• Center for Tobacco Control Research and Eduction, “Incorporating best practices from tobacco control into California’s cannabis regulations still needed”.

This article was written by Valerie Thomas, on behalf of the Regulatory Institute, Brussels and Lisbon.