Cannabis Regulatory Consultation Submission – December 2020


Re: Consultation on Regulatory Issues in December 12, 2020 Notice of Intent

December 22, 2020

John Clare
Director General
Strategic Policy, Cannabis
Controlled Substances and Cannabis Branch Health Canada

Email: ​cannabis.consultation@canada.ca

Dear Mr. Clare,

I’m really appreciative of the opportunity to provide comment on the consultation of the regulatory proposals contained in the December 12, 2020 Notice of Intent in the Canada Gazette with respect to the Cannabis Regulations.

I’m a Toronto-based lawyer serving as legal counsel and consultant to many authorized Ontario-based cannabis retailers, as well as other industry stakeholders across Canada.

I’d like to touch upon two matters in your consultation where reform is needed: Public possession limits on classes of cannabis, as well as the labelling of cannabis products to the extent necessary to clearly communicate pertinent information.

As you are aware, in past communications with Health Canada, I have advocated the loosening of restrictions with respect to public possession of cannabis products through a targeted approach in which the 30g public possession limit should be removed only with respect to cannabis products that remain fully stamped and sealed at all times.

This is a rational solution to a number of problems, including the continued battle of fighting the black market for market share, serving the underserved market segment that consumes a large proportion of cannabis sold and ensuring we do not make criminals out of otherwise law-abiding Canadian cannabis consumers – all while upholding the objectives of the Cannabis Act. It is a simple and elegant solution, requiring no legislative amendment by Parliament but rather a small one-line provision in the Cannabis Regulations that no possession limit applies to the otherwise lawful public possession by an individual of cannabis products that remain both stamped and sealed, which would permit provinces and territories to authorize retailers to sell more than 30 grams of dried cannabis to consumers in one visit.

I would like to reiterate my position on this for a number of reasons.

As mentioned in the consultation, through public opinion research Health Canada found that consumers did not see the labelling of the dried equivalency on cannabis products as a legal limit but rather a guide on product strength or way to compare costs between products. Therefore, this problem ostensibly extends to any class of cannabis product that states the dried equivalency formula on its label, and not just non-solids containing cannabis (which I will refer to as beverages). While adjusting only the public possession limits of beverages may seem like an appropriate solution at first blush, it is frankly short-sighted that the Government of Canada would only propose to modify public possession limits with respect to beverages if this is a problem that stretches to the other product classes.

Replacing the current broad-based 30g public possession limit on all cannabis with a 30g limit that applies to public possession of any cannabis that is either unstamped or unsealed, would incentivize consumers to only open the seal of purchased cannabis later on at the time of consumption, and not immediately subsequent to the product’s purchase since such cannabis would thereafter be subject to the 30g public possession limit. This also aligns with provincial driving legislation which attempts to promote the vehicular transportation of cannabis products only when they are sealed sealed, by permitting cannabis to be possessed in any part of a vehicle.

Most cannabis is consumed by a small proportion of users that consume a large amount of cannabis on a daily basis. Many customers feel limited when they can only purchase 30 grams of cannabis from a provincially-authorized retailer at one time, and it is an advantage of the current illicit market. This is a solution for customers used to buying more than 30g at one visit on the illicit market.

The Cannabis Regulations allow an authorized medical sales licence holder to sell and ship by courier to a patient up to 150g in one order. This is despite a patient’s per day gram prescription, which at 1g a day would only authorize 30g public possession of medical cannabis, for example. Therefore, if a patient who needs 1g/day orders 150g of medical cannabis, which Health Canada has authorized licence holders to sell to them, that patient could be placed in serious criminal and penal jeopardy should they need to go to a post office to pick up the package and subsequently be in a public place with more than 100 grams over the amount of cannabis they are authorized to possess!

This would also stop incentivizing the “race to the bottom” in which producers try to push maximum potency levels in as small formats as possible in order so that customers can purchase and possess as many of their products at one time. For example, because public possession limits restrict the amount of cannabis one can purchase in a visit, consumers typically demand the best “bang for their buck”. That usually means a market where 20%+ THC strains of dried cannabis are the most preferred characteristic by sellers and consumers, and now we’re going to see it happen with 30% THC. This also plays out in beverages. Non-solid cannabis limits are such that a cannabis processor could legally create a drinkable “shot” that is as small as 30ml, with up to 10mg THC (or whatever the THC potency limit may be at the time), in order to maximize the number of their beverages a person can purchase under the currently-imposed 30g possession limit. And a company has indeed released a product of “shots” on the market with these exact figures. Even if the public possession limit on beverages remains yet is raised to a higher number, processors and sellers will still in perpetuity remain incentivized to create the lowest-weighted beverages and edibles possible while packing the highest potency legally permitted unless the Government adopts the recommendation I have put forward.

If the Government merely establishes an increased public possession limit on beverages, it is unlikely that the Government will reach a limit satisfactory to all stakeholders. With some legal beverages on the market, a purchase of 5 of them takes up close to all of a person’s 30-gram limit. A doubling still wouldn’t allow someone to purchase a 12-pack in one store outing, let alone any other additional cannabis. Establishing a looser limit merely on beverages will also be confusing to retailers, consumers, and will greatly complicate another one of the objectives of this consultation.

The Government may be concerned that such an amendment may enable wholesale purchasing of cannabis and re-sale by illicit sellers, but this is unwarranted. First, subject to any provincial limits, adults have been able to, since October 17, 2018, personally possess an unlimited amount of legal cannabis in a private place unless it is for any unlawful purpose. Under s. 69 of the Cannabis Act, retailers may sell cannabis if authorized to do so under a provincial Act. While all provinces and territories appear to impose a 30 gram per order purchase cap, individuals are typically permitted to purchase one or more times a day, which can add up to in excess of 30g. In addition, in Ontario, the OCS appears to facilitate orders such that an individual could place multiple orders each containing up to 30g at the same address and receive it the same day. Any patient of a medical sales licence holder can order 150g per order, no matter their gram per day prescription, and can order multiple times in a day if they please. In summary, if relatively criminals wanted to take advantage of the legal cannabis system to supply the illicit market, they can already do it. Without foreclosing the probability it’s likely happened at least once at some point, I have not seen one published report or heard of one arrest of purported re-sale by a consumer of a wholesale amount of packaged cannabis products that they had bought from a lawful retailer.

As you know, the dried equivalencies and the 30-gram public possession limit are established in Schedule 3 of the Cannabis Act, and so modification of the language in the Act would require approval by Parliament – and that would take significant time and resources. Otherwise, should the Act have one set of long-established equivalencies, yet a new one tucked into the Regulations just for beverages, I don’t see how that wouldn’t confuse a considerable proportion of stakeholders.

Keep in mind, in implementing this change I have proposed, nothing would prohibit provinces and territories from establishing their own public possession or purchase limits, and this change also would not invalidate any of the provisions or rules provinces have already instituted that impose a public possession and/or purchase limit of 30g. Most if not all of the provinces have already established such a 30g cap through provincial legislation or regulations in accordance with the federal Cannabis Act, so in effect this change would provide provinces the ability to remove that cap from federal law but it would not change the fact that provinces would still have their currently-implemented 30g cap in place and consumers would still be subject to such purchase/possession limits unless modified by the respective province.

In respect of the dried equivalency labelling concerns, I propose the following, simple three-point modification.

  1. Require a statement on the PDP on all product classes, adjacent to the statement of the Net Weight of the cannabis: “It is illegal to possess more than 30g of dried cannabis or its equivalent.”
  2. Require a statement on the PDP on all product classes except dried cannabis, adjacent to the statement referred to in 1): “CAUTION! Out of your 30g limit, this product equals”
  3. Any dried equivalency gram amount calculated by a processor shall be rounded to the nearest .5g or .0g, and such rounded number shall be the product’s dried equivalency for all purposes.
  4. The statement and the dried equivalency gram amount shall be in a weighted font.

Finally, with respect to product labelling, I believe that processors should be required to, in conjunction with mandated potency testing, measure total terpene content percentage and place that figure on the Principal Display Panel of dried cannabis products sold. Terpenes are a major determinant of a product’s appeal to customers in respect of aromatic compounds, and research shows it may contribute to the effects provided by phytocannabinoids (the “entourage effect”). Some producers have begun to list the total terpene content % percentage on their labels as well as the top 4 or 5 terpenes by weight, however, mandating the listing of all this additional data on labels would establish an undue labelling burden on processors.

In order to off-set the space required for the increased labelling requirements, THC-A and CBD-A should not be required to be stated on labels of cannabis products, unless it consists of fresh cannabis. Retaining this status quo would only really be helpful if someone were to eat un-decarboxylated dried cannabis flower purposefully, and in such an event, no amount of labels is going to stop that person. The requirement for dried cannabis products to include on its label a recommended storage conditions statement (“store in a dry place”) should be removed in the case where an expiry date has not been established, since Canadian consumers have a long history with dried cannabis, most consumers already have their own preferred way of storing dried cannabis, and the lack of an expiry date suggests an indefinite shelf life. The statement should still be required on all product classes that are not dried cannabis, since there can be a variety of recommended storage conditions for different products and Canadians have less experience with the Cannabis 2.0 that have been appearing on the market.

It is also suggested that the Government of Canada removes anti-smoking of cannabis warnings on beverages, edibles and ingestible (non-inhalable) extracts. I imagine if you asked the public opinion research participants whether they or someone they know has ever attempted to light up and inhale cannabis edibles, they would probably have a puzzled look on their face. Young children can certainly unintentionally eat cannabis edibles, but I have never heard a case report of one attempting to light up and inhale them. While the Government’s rationale may be that the warnings are meant to appear on the labels of all products regardless of the fact that the warning may not correspond with its product class, it doesn’t explain that topicals are only required to display one particular topicals-specific warning.

I understand I am only one voice in the sea of stakeholders, but I believe my proposals represent a thoughtful approach to addressing the concerns that have been raised by stakeholders.

I insist that after reviewing all the consultation submissions concerning these matters, Health Canada critically assesses my proposals against the Government’s respective proposals to determine which approach is likely to respond to stakeholder concerns more effectively and efficiently while triggering the least amount of unintended knock-on consequences.

I welcome the full sharing of this letter internally in the event this may assist the Government in its decision-making.

Thanks

Harrison Jordan
Cannabis Lawyer and Consultant