Let them eat cannabis – with restrictions!

On December 22, 2018, the Canadian Federal Government published proposed regulations that will expand the permitted format for products that contain or are derived from cannabis. Stakeholders are invited to comment on the proposed regulations before February 20, 2019.

What you need to know

• The proposed regulations are not law, and changes may be made before final regulations are developed in 2019.
• The regulations would amend the Cannabis Act and Regulations (the Act) to allow for the medical or recreational production and sale of three new classes of cannabis: edible cannabis, cannabis topicals and cannabis extracts.
  • Edible cannabis will include food and beverages. Edible cannabis must be shelf stable (i.e., not require refrigeration or freezing).
  • Cannabis extracts will be products produced by extraction processing or by synthesizing phytocannabinoids.
  • Cannabis topicals will be products containing cannabis and used as topicals on external body surfaces (e.g., on hair, skin or nails, but not in the area of the eyes).
• Companies that wish to process, package and label these new classes of cannabis will be required to obtain a cannabis processing license from Health Canada or amend their current license to add the new product classes. In addition, consistent with the current regulations, at least 60 days before selling each new class of cannabis, licensed processors would need to notify Health Canada of the impending sales of each new class of cannabis.
• Until the regulations come into force, expected to occur on or before October 17, 2019, these new classes of cannabis cannot be legally sold.
• Consistent with the government’s objective to address public health and safety risks, the proposed regulations contain various restrictions on the new classes of cannabis with respect to ingredient composition, labelling and packaging and products that may appeal to youths.

Details of the proposed regulations

Not surprisingly, the regulations include many concepts drawn from Health Canada’s regulation of other products, such as food, cosmetics and tobacco and vaping products. Here are some highlights of the proposed regulatory framework for the three new cannabis classes:

• Facilities: The regulations adopt measures similar to those of the Safe Food For Canadians Act (SFCA) to prevent the risk of food-borne illnesses associated with edible cannabis. These include requirements and controls on sanitation, ventilation, contamination and the development of written Preventative Control Plans. For example, edible cannabis can be produced at a site where conventional food products are made only if activities are performed in separate buildings in order to prevent cross-contamination of ingredients, product mix-ups and mislabeling.
• Good production practices, quality control and record keeping: The regulations expand upon the requirements for good production practices, quality control and record keeping. They require that there be standard operating procedures (SOPs) to ensure that cannabis and anything used as an ingredient is produced, packaged, labelled, distributed, stored, sampled and tested in accordance with the expanded good production practices and other requirements of the proposed and current regulations. Every lot or batch of cannabis will have to be approved by a quality assurance person before it is made available for sale. Testing on the quantity or concentration will have to be done on each lot or batch of cannabis that is or will become a cannabis product. Testing will have to be done on the final form of cannabis product (before or after it is packaged and labelled). Furthermore, license holders will be required to conduct simulated recalls, at least once every 12 months, to assess the effectiveness of their recall systems and processes. Records will be required to be kept regarding investigations, corrective measures and testing.
• THC limits: Each new class of cannabis is subject to limitations on THC content based on individual serving size/usage. Edible cannabis has a limit of 10 mg of THC per discrete unit and package. Cannabis extracts have a limit of 10 mg of THC per discrete unit that is intended to be ingested or used, as is currently the case for cannabis oil. Cannabis extracts cannot contain more than 1 gram of THC per package. Cannabis topical products cannot contain more than 1 gram of THC per package.
• Variability limits: Similar to regulation of Natural Health Products, the new cannabis classes are subject to variability limits for the amount of THC and CBD of 15% in most cases (and higher percentages for edible cannabis containing less than 5 mg of THC/CBD per discrete unit).
• Limitations on product forms: The regulations continue to prohibit the use of any cannabis product intended for use in the area of the eye, on broken skin or by a means other than absorption.
• Limitation on ingredients:
  • Edible cannabis:
    • may only consist of food ingredients and food additives authorized under the Food and Drug Regulations. Meat, poultry and fish ingredients are prohibited as ingredients of edible cannabis with the exception of certain dried meat, poultry and fish products obtained from SFCA licensed suppliers.
    • cannot contain more than 30mg of naturally occurring caffeine and caffeine cannot otherwise be used as a food additive.
    • may contain ethyl alcohol, but only at a level of 0.5% w/w or less only.
  • Cannabis extracts are prohibited from containing sugars and sweetening agents, as well as vitamins, minerals, probiotics and other ingredients that are likewise prohibited in vaping substances. Cannabis extracts that are ingested may contain ethyl alcohol (maximum package size of 7.5g each, irrespective of the amount of THC in the extract).
  • Cannabis topicals must comply with the ingredient requirements and prohibitions of the Cosmetic Ingredient Hotlist.
• Limitation on dispensing: An incidental amendment is directed to cannabis accessories and provides that the maximum amount of THC that can be dispensed per activation (e.g., ingested or nasal, rectal or vaginal administration) is 10mg THC.
• Labelling: All new forms of cannabis products must conform to plain packaging and labelling requirements. They must also include a list of ingredients on their labelling. Cannabis edibles packaging must contain a simplified nutrition facts table (NFT) (comparable to food products) that would set out the number of calories per container and amounts of 12 core nutrients (carbohydrates, fat, protein, cholesterol, sodium, and others). Nutrition content claims outside of the NFT (e.g., “low fat”) are prohibited. Labels for cannabis edibles and extracts must also include allergen and gluten warnings as well as durable life date (i.e., a “best-before” date). Cannabis topicals must display directions for use as well as certain warnings that are currently required for cosmetic products; however, cosmetic benefits (e.g. “softens skin”) are prohibited. No cannabis product can be represented as having a health benefit or being suitable for persons with dietary restrictions. All representations that associate a cannabis product with an alcoholic beverage would be prohibited (e.g., the terms “beer” or “wine” could not be used on cannabis products). Nor can trademarks of a company that produces alcohol beverages be used on cannabis products.
• Packaging: An exception on the use of a naturally occurring metallic color on the external surface of an immediate container will be provided, to allow the use of containers like metal beverage cans. The external surface of a container will no longer need to have a matte finish, to allow for the use of metal containers and peel-back labels. Containers for extracts will need to be designed to prevent the extract from being poured or drunk directly from the container and to dispense no more than 10 mg of THC. Co-packaging of an edible cannabis and a food is prohibited. While immediate containers of cannabis cannot be pressurized, an exception is made for containers for carbonated cannabis beverages. Expanded panels and alternate display formats (e.g., peel back and accordion labels) are contemplated when immediate containers are too small to include required information, provided that they cannot be easily removed from the immediate containers.

The regulations do not change the current prohibition on import and export of any cannabis product except for medical or scientific purposes.

Any comments on the proposed regulations should be submitted to [email protected] by February 20, 2019. After the government receives and considers comments, it is expected that the proposed regulations will be promulgated into law on or before October 17, 2019.

We have written extensively about cannabis, and you can get more of our related insights here.

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This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

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