Privacy compliance for private sector cannabis retailers part 1


peter murphy headshot

In the first instalment of a two-part series on privacy compliance for cannabis retail stores, Toronto business lawyer Peter Murphy looks at the role privacy will play in the market.

Customer privacy policies will become a selling point for recreational cannabis retailers as Ontario’s private market develops, Toronto business lawyer Peter Murphy tells

Following the federal government’s recent legalization of the drug for recreational use, the provincial government unveiled its own framework for sales in the Cannabis Statute Law Amendment Act.

While the Ontario Cannabis Store retains a monopoly over online sales, Murphy, partner with Shibley Righton LLP, says the model selected for private-sector bricks-and-mortar retailers has created opportunities for smaller players to enter the market after the new administration abandoned the previous Liberal government’s plans for complete provincial control over sales.

Though only a few stores are officially up and running since winning the licensing lottery, Murphy expects privacy compliance to take centre stage as they attempt to differentiate themselves in an increasingly competitive industry.

“Recreational cannabis consumers prefer retailers who offer the greatest protection of their personal information, and who best limit its use,” he says. “Privacy compliance will not only be a legal necessity in this industry, but also a key competitive factor.

“Cannabis consumers are sensitive about their personal information for a number of reasons, and that sensitivity leads them to focus even more on the retailers' privacy policies and practices.”

For example, Murphy says some employers have banned employees from ever using cannabis. He says cannabis use remains illegal in many jurisdictions outside Canada, most notably in the U.S., where border authorities have threatened to bar Canadians who use the drug or are involved in the cannabis industry from entering the U.S. or from being granted citizenship.

In addition, the Associated Press reports that nations including Japan and South Korea have warned their citizens they could face criminal arrest back home for possession of cannabis while in Canada, despite its legal status here.

Murphy warns that, as a result, the disclosure of payment card or other cannabis purchase information will be a huge concern for many consumers.

"My view is that any cannabis retailer who wants to be successful in the long run will need to demonstrate robust privacy compliance," he says.

“The sensitivity of this information raises the bar on privacy compliance in a number of areas, including the safeguarding necessary to protect that information, the form of consent required for its collection, use and disclosure, and the handling of payment card information," says Murphy.

Stay tuned for part two where Murphy will look at the privacy commissioner’s guidelines on the subject.