The year 2019 has barely begun and we can already anticipate that it will be full of twists and turns in the development of the cannabis industry in Canada. Indeed, it will be the year of regulating and marketing edible products, extracts and topical products. In the coming months, Ontario will open its first privately run retail stores. Meanwhile, in Quebec, the government of François Legault will study his bill to increase the age of consumption to 21 years old and to restrict the places where it will be possible to consume cannabis. It’s safe to bet that the issue of distribution of therapeutic cannabis through the network of pharmacies will continue to occupy an important place in these debates.

On December 20, 2018, Health Canada launched a public consultation for the draft regulations governing the production and sale of cannabis edibles, cannabis extracts and cannabis topicals. Canadians and industry members will have until February 20, 2019 to submit their comments on the government’s proposal. Health Canada encourages all interested parties to use the online platform to submit comments and questions. In addition, for those interested in obtaining technical information on the proposed regulations, representatives of Cannabis Legalization and Regulation will participate in four roundtable sessions during the month of January. They will be in Vancouver on the 17th, in Ottawa on the 24th and 25th and in Montreal on the 30th.

My colleagues from Ontario, Ivan Ross Vrána and Rahmat Kassam, have produced a short analysis of the draft regulations and have raised some interesting points:

  1. They find that to produce edible and/or concentrated cannabis, it will be necessary to hold a Health Canada processing license (micro or standard). Knowing Health Canada’s current processing times, it is not clear whether it will devote separate resources to processing these requests.
  2. Depending on industry readiness and the Health Canada regulatory review process it will be interesting to see if any products are prepared to launch when these regulations come into force on October 17, 2019.
  3. Consistent with the government’s goal of not normalizing cannabis use, the regulation is very restrictive with respect to the types of products that may or may not be included in the edible cannabis category. As an example, no product containing alcohol will be allowed. It’s also restrictive in terms of labeling and packaging.
  4. It’s not clear how these changes will impact and decrease the current illegal market where cannabis edibles and concentrates are easily available.
  5. The proposed regulatory changes do define cannabis edibles as a food under the Food and Drugs Act.

Let’s take a few seconds to look ahead and make our way to fall 2019, when the regulations, which should be passed, will allow the production and sale of cannabis edibles, cannabis extracts and cannabis topicals. What are the business prospects in Quebec? According to the legislative framework in force, the Quebec Cannabis Society (SQDC) is the only entity that can sell cannabis in Quebec. In other words, all those who will be able to produce edible products (as stipulated in the coming regulations) will have to sell them through the SQDC. By comparison, Ontario with its network of private retailers will have more flexibility than Quebec. It is therefore essential, from the beginning of this year, that the SQDC and the Quebec government correctly analyze the situation that’s to come. The current size of the SQDC branches will not suffice for the storage of edible products that will invade the market. Cosmetics and hygiene products, which are in the category of cannabis products for topical use, will also have to find a place on the shelves. Will pharmacy sales be considered?

In summary, 2019 will be a year in which the industry will have to remain vigilant and watch for the various changes. The provisions of the Act to constitute the Société québécoise du cannabis, to enact the Cannabis Regulation Act and to amend various highway safety-related provisions will allow the Government of Quebec to regulate several aspects. It will be interesting to know the intentions of the new government with regards to edible products.

For more information: 

Pascal Chouinard, Account Director

Hill+Knowlton Strategies

500, Grande Allée Est, Bureau 250

Québec, Québec, G1R 2J7

Email: pascal.chouinard@hkstrategies.ca

Mobile: +1 418 928 3918

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