The government of Canada published a press release on April 13th proposing a piece of legislation, the Cannabis Act, which would regulate the industry by July of 2018. The press release puts a heavy emphasis on keeping cannabis away from children, curbing impaired driving and reducing criminal and organized crime profits.
The press release says the legislation would set up a regulatory framework “for controlling the production, distribution, sale and possession of cannabis in Canada.” It would set the minimum age to purchase cannabis at 18, but provinces can increase that minimum age how they see fit. Health Canada, the Royal Canadian Mounted Police, the Canada Border Services Agency and the Department of Public Safety would be responsible for enforcing the regulations.
The Cannabis Act states they plan on implementing a fully functioning regulatory framework by July of 2018. Transporting cannabis across international borders or selling to minors would be serious criminal offenses. If the legislation becomes law, adults could have up to 30 grams of cannabis on their person and grow up to four plants in their home.
Individual provinces would ultimately be the regulating authorities, but if local jurisdictions do not have a regulatory framework in place, the press release says Canadians could purchase cannabis online and have it shipped to them. In addition to establishing the regulatory framework, the Cannabis Act would tighten laws on impaired driving. “Additionally, the proposed legislation would authorize new tools for police to better detect drivers who have drugs in their body,” reads the press release. That would give the police authorization to use oral fluid drug screeners, but cannabis is particularly difficult to detect at low concentrations. It is unclear exactly how that would be enforced and specifically what technology they would use.
In a Facebook post this morning, Justin Trudeau announced the proposed legislation to his followers. “It’s too easy for our kids to get marijuana,” says the Prime Minister. “We’re going to change that.” That mention of keeping cannabis out of reach of the Canadian youth is heavily emphasized in the press release as well.
Cannabis sold between August and December of 2016 is being voluntarily recalled by Organigram, a Canadian cannabis producer, due to the detection of unapproved pesticides, according to a press release. Organigram is a licensed medical cannabis producer in Canada, which received an organic certification back in 2014 by ECOCERT, a third-party organic certification organization based in France.
Organigram and Health Canada deemed it a Type III recall, meaning “a situation in which the use of, or exposure to, dried marijuana, fresh marijuana or cannabis oil, marijuana plants or seeds is not likely to cause any adverse health consequences,” according to that press release. They don’t know how the products were contaminated as routine use of pesticides is barred under their organic certification. Organigram is cooperating with Health Canada to conduct a full investigation to determine how the cannabis was contaminated.
About a month before Organigram’s recall, Mettrum Health Corp., a Toronto-based licensed medical cannabis producer, voluntarily recalled medical cannabis products that might have contained trace levels of pyrethrin, an insecticide not approved for use on cannabis, but generally regarded as safe with a low toxicity. That press release only mentions the detection of pyrethrin and downplays the health effects. “While the ingredient is not harmful and there is no negative effect on product quality and safety, we are doing everything possible to ensure client satisfaction and confidence is upheld,” says Michael Haines, director and chief executive officer of Mettrum Health Corp.
Reporting in an article last week, The Globe and Mail discovered that Mettrum’s recall included lots where they detected trace levels of Myclobutanil, a hazardous and illegal pesticide that is banned in a number of states as well. Myclobutanil has been discovered as the culprit in a slew of pesticide-related recalls in Colorado and Washington.
But Mettrum’s updated press release doesn’t include any mention of Myclobutanil. Health Canada also didn’t make any public disclosures addressing the detection of Myclobutanil. The Globe and Mail only found out that the recall included the banned pesticide after asking a Mettrum employee.
Tegan Adams, business development manager at Eurofins-Experchem Laboratories, Inc., a Toronto-based GMP testing lab, indicated that while the regulations are clear in their statement on zero tolerance for pesticides- reasons for inconsistent testing results are in part related to variations in rigor of testing methods available to monitor for pesticides in cannabis. “Licensed producers do not have to release routine test results to the public,” says Adams. “There is a group of us, inclusive of representatives from licensed producers (LPs), working on proposing a new federal cannabis accreditation standard that would make testing results, grading quality, DNA and a few other things public for each cannabis batch legally released to the public to be accredited. Making information like this public would help remove a lot of consumer scrutiny on LPs, as it currently exists in the marketplace. Most of them care so much about their products and patients, they work very hard to create safe quality products”
According to Adams, routine pesticide testing typically scans for roughly 100 pesticides. She says a more rigorous test could scan for 500-700 different pesticides, a more accurate representation of what’s on the market. Adams says the regulations have zero tolerance for any detection of pesticides, not necessarily an action level for what is a safe amount to be present.
More research is needed on the smoking and inhalation aspects of pesticide products to say what is safe and what is not. “There are different methods available to test for pesticides, and SOPs to follow to avoid their application,” says Adams. “But if a licensed producer chose a testing method that doesn’t for some reason cover a pesticide they are later found to have on their product, that could present the need for a recall if Health Canada or another entity were to somehow to detect it using a different method.”
Health Canada determined both of those recalls to be Type III recalls. Both companies said they are cooperating fully with the regulatory body. By embracing the proposed new cannabis testing accreditation standard, Health Canada could remedy the testing methodology discrepancies and require a greater level of transparency.
Earlier this month, Health Canada, in a press release, gave a glimpse as to what the new Access to Cannabis for Medical Purposes Regulations (ACMPR) might look like. On August 11th, they announced the new set of regulations would go into effect on August 24th this week. Information presented was not shocking. Most Canadians had hoped and suspected that the announcement would include a provision for growing cannabis at home – and it did exactly that.
Essentially, the ACMPR expands accessibility of cannabis from our highly regulated 34 licensed producers (LPs) to include those authorized by their health care practitioner to access cannabis. Anyone with the appropriate medical documentation can now grow for him or herself at home, or designate a grower to do so for them. Health Canada also stipulated in the press release that “Storefronts selling marijuana [sic], commonly known as ‘dispensaries’ and ’compassion clubs’ are not authorized to sell cannabis for medical or any other purposes.” The regulatory body went on to add: “These operations are illegally supplied and provide products that are unregulated and may be unsafe. Illegal storefront distribution and sale of cannabis in Canada are subject to law enforcement action.”
There were a few curve balls in the announcement, including a statement issued that suggests commercial producers may be the only ones authorized to distribute seeds or plants to those growing for themselves or on behalf of another. It is unclear how the plant and seed sourcing aspect will be regulated and/or how that statement may impact LPs over individual producers. Restriction of strain availability and additional costs are examples of potential implications to individuals. LPs therefore remain in control of the types of cannabis available on the market. It is unclear if this regulatory aspect will mean they can restrict access to strains they have on hand, or not, especially if they are popular for sales.
When the first glimpse of the ACMPR was released, we saw many LPs stock drop in price across the board, in some cases greater than 10%. It is not anticipated however that the ACMPR will cause any long-term negative effects on LPs stock price or profitability. The ACMPR was put in place merely to satisfy a court ruling on a deadline. The deadline was inconvenient, occurring around 9 months before the regulations governing recreational sales are meant to go in effect. It meant that Health Canada employees had to dedicate time to finding a Band-Aid solution up until recreational sales instead of focussing on recreational regulatory framework itself.
Recreational regulations are scheduled for release in 2017, and it is unclear when exactly they will begin. As they do begin to unfold it is projected that the production and sale of cannabis will remain highly regulated. LPs will remain the consistent quality source of supply. There have been multiple distribution models in discussion, including co-op retail ownership, pharmacy dispensary and liquor board models. While yes, those with medical documentation anticipate still being able to produce at home; it is unlikely this allowance will have any effect on the overall sales of LPs as the market unfolds. Alcohol and wine are good examples to compare the regulatory model to. While sure, any of us can do home brewing, odds are we would still like to purchase beer from commercial breweries. In both Vancouver and Toronto, property is very expensive. Higher percentages of the population are starting to live in apartments, condos and smaller homes. Many people working full time are not interested in growing their own cannabis and would prefer the variety of the marketplace. There are many reasons individuals will continue to purchase from LPs. As competition rises in the marketplace, so will efficiencies in production as producers become more familiar with growing practices. Canada is anticipating a drop in retail prices to be much more affordable than existing “black markets.” Cannabis will become commonplace on shopping corners and it will be a product that most will be able to afford.