IssuesCannabis

Cannabis

First Published: Sep 20, 2019
Last Updated: Sep 20, 2019
Monitored by: Naomi Shuman

Background

Bill C-45, Cannabis Act received royal assent in June 2018 and came into force on October 17, 2018. It created a legal framework for controlling the production, distribution, sale and possession of cannabis across Canada. The Act aims to provide access to quality-controlled supply of cannabis, keep cannabis out of the hands of youth, keep profits out of the pockets of criminals and protect public health and safety by allowing adults access to legal cannabis. Under the Cannabis Regulations licences are required in order to cultivate or process cannabis, to sell cannabis for medical purposes, to manufacture prescription drugs containing cannabis, or to conduct analytical testing of or research with cannabis.

Provinces and territories are responsible for determining how cannabis is distributed and sold within their jurisdictions, including where stores may be located and how stores must be operated. Provinces and territories also have the flexibility to set added restrictions, including lowering possession limits, increasing the minimum age, restricting where cannabis may be used in public and setting added requirements on personal cultivation.

Recreational Products

As of October 17, 2018, it is legal to possess fresh and dried cannabis, oil, seeds and seedlings. Subject to provincial or territorial restrictions adults who are 18 years of age or older are legally able to posses up to 30 grams of legal cannabis, dried or equivalent in non-dried form in public. All other forms of cannabis than those noted above including edibles are not yet legal.

Medical Cannabis

Since the Cannabis Act came into force on October 17, 2018 new regulations have replaced the Access to Cannabis for Medical Purposes Regulations. Patients authorized by their health care provider are still able to access cannabis for medical purposes by buying directly from a federally licensed seller, registering with Health Canada to produce a limited amount of cannabis for their own medical purposes or designating someone to produce it for them. The new regulations have improved patient access by also enabling patients to purchase cannabis from provincial or territorial authorized online sales platforms and at provincial or territorial authorized retail outlets.

Retailers

Retailers must source supply from federally licensed producers. Private retailers will be required to purchase all cannabis inventory from their provincial government distributor, which varies from province to province. The only exception is Saskatchewan which will allow for private companies to distribute cannabis to Saskatchewan retailers. Plain packaging with labelling requirements is required for all products.

Advertising/Promotions

The Cannabis Act specifies rigid rules and regulations on marketing, advertising and promotion, including no promotion that is considered appealing to youth, no sponsorships, endorsements, facility naming; and promotions limited to factual information.

Current Status

The final regulations governing edible cannabis, cannabis extracts for ingestion and inhalation and cannabis topicals were published on June 14, 2019 and will come into force on October 17, 2019, one year to the day from when cannabis was first legalized. However, it will take time, after that date, before new cannabis products become available for purchase. It is expected that a limited selection will be available for sale in mid-December 2019 in physical and online store, with product availability gradually increasing. Aim of the regulation is to protect public health, to reduce the health risks of these cannabis products and to keep these products out of the hands of youth. No products with alcohol or nicotine added are legal and there are limits on caffeine content.

Regulations for the New Class of Cannabis

Edibles are defined as “products containing cannabis that are intended to be consumed in the same manner as food (i.e., eaten or drunk).” Include everything from cannabis candy to dried meat with marijuana. Limit the amount of THC- the psychoactive component in cannabis- to 10 milligrams of THC per discrete unit and per package. This would mean, for example, that a package could contain one discrete unit of edible cannabis that contains 10 milligrams of THC; or two discrete units that each contain 5 milligrams of THC. Production of edible cannabis cannot be in the same building as conventional food products in order to prevent contamination and ensure the safety and integrity of Canada’s food system.

Extracts are “products that are produced using extraction processing methods or by synthesizing phytocannabinoids.” Topicals are “products that include cannabis as an ingredient and which are intended to be used on external body surfaces (i.e., skin, hair and nails).” Topicals must list ingredients as well as intended use of the product. The label cannot have any claims respecting health or cosmetic benefits. Extracts and topicals would not be permitted to exceed 1,000 milligrams of THC per package. For extracts, as is currently the case for cannabis oil, there would be a limit of 10 milligrams of THC per discrete unit that is intended to be ingested or for nasal, rectal or vaginal use, such as a capsule. Cannabis extracts or topical product packaging is limited to 7.5 grams for solid extracts if over 3% THC and 90 mL for liquid extracts if under 3% THC.

Medical Cannabis

The Federal government and various provincial colleges of pharmacy are advancing discussions around allowing pharmacies to sell medical cannabis, but this may not happen until 2019-2020.

Licensing Process

As of May 2019, new applicants for licences to cultivate, process or sell cannabis — for either medical or recreational purposes — must now have a fully built site that meets the regulations when they submit their application, the government agency said. Prior to this, cannabis licence applicants could submit an application with their plans and get approval before building. The change is a result of a review of the cannabis licensing process which found that a significant amount of Health Canada’s resources was used to approve applications for facilities that have not materialized years later.

Market Size

The exact size of the market remains unclear. Retailers and provincial distributers are still claiming that there are supply issues limiting product variety and availability of THC products and pure CBD products. Health Canada, however, claims there is no supply issue but rather supply chain issues, difficulties converting raw product into packaged goods and into the hands of consumers.

Monthly sales of recreational cannabis since legalization has ranged from $41 M to $60.5 M across Canada, with total sales of $320 million since legalization. Total (medical and non-medical) monthly sales of total dried cannabis since legalization has ranged between 6,415 and 7,627 kg. Total monthly sales of cannabis oil has ranged between 6,119 and 7,921 litres. The finished inventory and unfinished inventory of both dried cannabis and cannabis oil continues in an upward trajectory. For March 2019, aggregate inventory of dried cannabis held by provincial and territorial distributors and retailers was 3.0 times non-medical sales. Aggregate inventory for cannabis oil held by provincial and territorial distributors and retailers was 11.5 times non-medical sales in March.

Recreational cannabis sales vary by province. British Columbia has relatively low sales given the population size because of a well-established grey market. Atlantic Canadians purchase more cannabis per capita than the rest of the country.

According to Statistics Canada, the unweighted average price per gram of dried cannabis from both legal and illegal sources combined post-legalization was $8.04. That legal price, which includes online and in-store purchases, amounts to approximately 17.3 per cent more than the pre-legalization price of $6.85. Buyers from legal sources since Oct. 17 last year have paid an average of $9.99 per gram, about 56.8 per cent higher than the average illicit market price of just $6.37 per gram.

Estimates vary for the size of the edibles market in Canada, Deloitte recently estimated that legalization of cannabis edibles and other alternative cannabis products will create a new $2.7 billion market in Canada. Concentrates and extracts are the fastest-growing cannabis category, surpassing dried flower, edibles and topicals in terms of sales expansion.

Liberal

As outlined above.

  • No new commitments announced to date
  • Announced may be made via release of the LPC Campaign Platform

Conservatives

Leader Andrew Scheer has committed to not re-criminalizing cannabis but a Tory administration may consider adjusting some of the rules.

  • Conservative government would not re-criminalize cannabis
  • A Tory administration would consider adjusting some of the rules;
  • Details on adjustments that may be considered within the Campaign Platform

NDP

The NDP have criticized the Liberal government for only offering a pardon for a past conviction for cannabis possession. The NDP says these convictions should be expunged.

  • No policy commitments included on their campaign platform

Green Party

  • Lower the federally set price for cannabis to make it competitive with illegal supplies.
  • Eliminate requirements for excess plastic packaging on legal cannabis.
  • Remove the sales tax on medicinal products.
  • Exempt CBD from the restrictions of the Prescriptions List, allowing hemp growers to produce it as a natural health product. This would strengthen the hemp industry and increase supply so those who use it for medicinal purposes do not have to purchase it illegally.
  • Allow outdoor production and impose organic production standards

People's Party

Bloc Quebecois

September 18, 2019
Naomi Shuman

A Green government will lower the federally set price for cannabis to make it competitive with the illegal market. It will eliminate the excess plastic packaging requirements on legal cannabis. In addition, it will remove the sales tax on medicinal cannabis products and exempt CBD from the restrictions of the Prescriptions List. This will allow hemp growers to produce CBD as a natural health product and increase access to it.

September 3, 2019
Naomi Shuman

The federal government’s lead minister on the cannabis file, Minister Bill Blair has been in talks with First Nations leaders over how to carve out First Nations jurisdiction over the cannabis industry on their territories. The Cannabis Act gave provincial and territorial governments control over the distribution and retail end, while Health Canada oversees the licensing of commercial production. The revenue-sharing regime also leaves out First Nations with the excise tax revenues split 25 per cent federal to 75 per cent provincial and territorial governments. The First Nations are looking for a regulatory regime that would operate in parallel and be First Nations-controlled from licensing to testing to revenue sharing. The First Nations are aware that the creation of a cannabis regime for First Nations’ territories will likely require a legislative component to give it force, which will have to wait until after the federal election. To this end, First Nations’ leaders hope to have some form of written commitment before the writ drops.

August 1, 2019
Naomi Shuman

Federal Justice Minister David Lametti announced that federal legislation to expedite and simplify the process of getting a pardon for simple cannabis possession in now in force. Individuals can now apply online for a free of change pardon for cannabis possession.

July 23, 2019
Naomi Shuman

Andrew Scheer said that a Conservative government would not only keep cannabis legal but also supports Canadians convicted of pot possession having their records pardoned.

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