In Canada’s increasing liberalization of its cannabis related laws, the manufacture and sale of THC-containing edibles (food, beverages, extracts and topicals) will become legal on October 17, 2019, although these products will not find their way (legally) onto the market until the middle of December. That’s because producers must apply to Health Canada for a license 60 days prior to commencing the sale of these products, and the government is not going to begin accepting these applications until October 17, 2019.
Last week, the government released the regulations that will govern the manufacture, advertising and sale of the noted edible products (including vape cartridges), once adopted. Anyone interested in this market needs to know what will and will not be allowed, as the consequences of noncompliance are significant (e.g. up to 5 years in prison and a $1 million fine). The description of the new regulations below is not exhaustive, and summarizes only the key points at a high level.
Under the soon-to-be-adopted laws, any THC food or beverage can contain a maximum of 10 mg of THC per unit or container, and cannot contain added vitamins, minerals, or alcohol. There will also be prescribed limits on caffeine content, although certain inherent levels of caffeine in products like chocolate will be permitted. For extracts, the limit will be 10 mg per discrete unit (e.g. a capsule) and 1,000 units per container (e.g. a container could contain several discrete units). For topicals, the limit will be 1000 mg per container. No health-related claims will be allowed.
As part of the quality control (e.g. cross-contamination) provisions, THC edibles cannot be manufactured in the same facility (i.e. building) where other food products are manufactured, which could present barriers to entry for some mainstream food companies looking to make and sell such products. This could perhaps lead to joint venture type relationships between mainstream food companies and licensed cannabis producers.
As expected, the packaging of THC edibles and beverages must be “plain” and child resistant. Thus manufacturers will not be able to identify and distinguish their products with fanciful packaging designs, as is the case with other food products. They will however be allowed to include one small brand element on the product packaging. As with other cannabis products, the standard cannabis symbol must appear on THC edible packaging, along with a modified health warning. Certain of these requirements will not apply to CBD products.
On the beverage front, in addition to the prohibition on alcohol, beverage makers will need to ensure that there are no elements on their packaging or labelling that could associate that product with alcoholic beverages or brands. For example, words like “beer” or “wine” cannot be used, nor can the logo of a company that makes alcoholic beverages (or tobacco products) if doing so creates the prohibited association. This too will limit the ability of these companies to leverage their existing goodwill vis-à-vis THC beverages.
As expected, the regulations contain a prohibition against regulated products and activities “that can reasonably be considered appealing to a young person.” For these purposes, a young person is anyone under 18 years of age. This is understandable, of course, but unfortunately not prescribed with clarity in the regulations. For example, will the sale of THC infused gummy bears violate the law, regardless of the packaging in which that product is contained? What about cupcakes, cookies or brownies? Will this be defined by the packaging, the shape, the flavor, the smell and/or the branding? Will well-known confectionery companies be precluded from using their existing brands, and leveraging that goodwill? Ultimately, it seems this important issue will be left to the authorities or the courts to be decided on a case-by-case basis, which will eventually shape the legal landscape. Until then, there will be inherent risk in bringing too much creativity to edible-related products and activities.
There will be restrictions on the promotion of these products, as is the case with existing cannabis products, largely directed to avoiding marketing and advertising that could appeal to young persons.
The actual regulations will not be published and publicly available until June 26, 2019.