Cannabis Producers: Health Canada Specifies Certain Future Regulatory Obligations Following Public Consultations

On March 19, 2018 Health Canada published a document entitled “Proposed Approach to the Regulation of Cannabis: Summary of Comments Received During the Public Consultation”. The document briefly reviews the approaches proposed by Health Canada in November 2017, and summarizes the comments received by stakeholder communities most directly affected by the proposed regulations. More importantly, in this publication Health Canada confirms several regulatory approaches and specifies the scope of the regulatory framework in greater detail.

Among those approaches, Health Canada confirms that it intends to authorize commercial outdoor cultivation of cannabis, while giving further consideration to enhancing the security measures that will be required. Health Canada also intends to limit the number of micro-cultivation or micro-processing licences at a single site.

With respect to micro-cultivation, while the many comments received did not allow a clear consensus on the best means for defining micro-cultivators to emerge, Health Canada appears to have decided that a micro-cultivation licence would authorize the cultivation of a plant canopy area of no more than 200 square metres. With respect to a micro-processing licence, it would authorize the processing of no more than 600 kilograms of dried cannabis (or equivalent) per year.

With respect to security clearances for major shareholders of privately-held companies, Health Canada will in all likelihood require that any shareholder owning more than 25% of a licensed privately-held company must hold a security clearance. Health Canada will thereby seek to ensure that organized crime is not able to infiltrate the legal cannabis industry.

While many respondents felt that more types of cannabis products should be authorized as soon as possible after the new legislation comes into force, the sale of edibles and other cannabis-based products, such as concentrated liquids suitable for vaping, will only be authorized within the year following the coming into force of the proposed Act. This will allow Health Canada to consult broadly on the specific regulations addressing the unique risks posed by these kind products.

With respect to the packaging and labelling of products, Health Canada has provided an exhaustive description of the regulatory requirements that producers of cannabis products will have to comply with. In particular, all packages will have to be marked with a standardized cannabis symbol and bear a health-warning and respect size, placement and appearance packaging requirements. Information on the THC and CBD content will have to appear on the label. It is important to note that Health Canada does not intend to propose a transition period for cannabis products sold for non-therapeutic purposes. All such products will have to comply with the new packaging and labelling requirements as of the coming into force of the Cannabis Act.

Finally, it should be noted that the Government of Canada intends to publish final regulations as soon as possible after the Cannabis Act receives Royal Assent. The Government also intends to offer an orderly transition period to the new legal framework of 8 to 12 weeks from the time the new laws comes into force.

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