Health Canada’s cautious approach to edibles telling for the future of the Canadian cannabis industry

Last week, Health Canada released their final regulations for cannabis edibles, extracts, and topicals (new classes), which will come into effect on October 17, 2019. With a 60-day timeframe before edibles would be permitted on retail shelves, the Government of Canada has again chosen the cautious approach, pushing the prospective date for consumers to experience these products into December 2019. The final regulations featured very few surprises, beyond creating a similar delay between legalization, implementation, and the eventual sale of the new classes of cannabis products, to that of currently available cannabis products, such as flowers and oils, currently sold in retailers across the country. Health Canada’s plans to implement them at the very end of their mandated timeline also confirmed what sharp industry watchers have suspected for some time now: that caution is king both now and for the future of Canadian cannabis. But before we get to the future, we take a look at the now.

What has changed since the proposed regulatory framework was released back in 2018?

While a single round of public consultations and industry roundtables provided the Canadian cannabis sector with a platform to share their views on the proposed regulatory framework, it has not resulted in much change, with Health Canada remaining adamantly strict in its approach to protecting children and prohibiting the addition of, the mention of or the association with alcohol.

Anything new?

While many of the proposed regulations have remained the same, below are some the changes:

• Nicotine is prohibited in all cannabis products;
• Labels must include the equivalency to dried cannabis to determine the public possession limit;
• Associating cannabis products with tobacco or nicotine vaping products is prohibited;
• Manufacturing of all cannabis products (not just edible cannabis) in the same building as food products is prohibited;
• Multiple containers of edible cannabis (e.g., beverages) packaged together (multi-pack) is permitted provided the total amount of THC in the multi-pack does not exceed 10 milligrams;
• Proposed prohibition on pressurized containers is removed (such as metered-dose inhalers);
• Standardized display of THC and CBD concentration on product labels is required;
• Transition period for cannabis oil is extended from 6 months to 12 months; and
• New provisions are added to limit certain types of permitted advertising (e.g., displaying a cannabis brand on products) to better protect youth from cannabis inducements.

Now what?

As early as July 15, licensed producers interested in producing new classes of cannabis will be able to apply for amendments to their existing licences. However, these requests will not be approved before October 17.

An exception, however, is that Health Canada will continue to process applications that are currently in the queue for licenced producers hoping to sell cannabis oil, since it will continue to remain under the current cannabis classes until October 17.

Licensed producers may conduct activities with the new classes of cannabis prior to October 17, including the production, research and development, and storage under their existing licence. However, the products in the new classes of cannabis that were produced in advance of October 17 will not be permitted to be sold, distributed, or exported unless the licence holder is:

• Able to demonstrate that all products were produced, packaged, labelled, stored, sampled, and tested in accordance with the amended regulations; and
• Fully authorized to sell and distribute that class of cannabis to provincially or territorially authorized retailers and to sale for medical purposes licence holders.

The next chapter

Future developments in this sector will likely present a far greater opportunity for surprises, as the regulatory framework for the second wave of legalization concludes the more predictable phase of Canadian cannabis story. If and how the Government of Canada chooses to engage on increasing THC content in consumables, whether shelf stability continues to be a key requirement, and, of course, whether the oft-discussed combination of cannabis and alcohol finds its way onto Canadian retail shelves one day, rank highly in that next stage of discussion and debate.

In the meantime, licensing amendments will be coming in left, right, and centre, dry packaging and labelling will require creative promotions, and strict promotional restrictions related to marketing around any similarities to alcohol and products that may appeal to children will require creative marketing and branding. This is what experts at NATIONAL work on every day with our clients in the cannabis space. Ask our Cannabis or Public Affairs experts how you can have your voice heard.

Click here to access the full document papers containing Health Canada’s final regulations.