Canada: Health Canada's Proposed Approach To The Regulation Of Cannabis

As we reported here, Canada has introduced legislation providing a framework for regulated access to legal cannabis for recreational use. The proposed Cannabis Act provides for overlapping oversight of the legal cannabis industry, with the federal government establishing licensing and authorization requirements for production, packaging, and labelling, and provincial/territorial governments overseeing distribution and retail sales. 

Over the past several months we have seen proposals from some of the provinces, and on November 21, 2017, Health Canada released its Proposed Approach to the Regulation of Cannabis (the Proposed Approach) for public consultation. This consultation is open until January 18, 2018. It is important that industry recognize this is likely the only time it will be able to comment on the proposed regime, as Health Canada has advised that draft regulations will not be published.


Overview of the proposed approach

Health Canada proposes a risk-based approach to overseeing the cannabis industry, whereby different requirements will apply to different operations, depending on the level of risk associated with the operation's activities. The goal: a diverse, competitive legal cannabis industry with both large and small players across Canada. Licences are activity based and applicants can seek a licence for more than one activity at a single site.

Four types of cultivation licences have been proposed:

  • Standard cultivation licences will authorize the large-scale growing and harvesting of cannabis plants and the production of cannabis seeds, cannabis plants, fresh cannabis and dried cannabis. Standard cultivators will only be permitted to sell to others in the industry, i.e., other licence holders, and to federally or provincially authorized distributors. Standard cultivators will not be allowed to package or label cannabis for sale to the public, or to sell directly to the public.

  • Micro-cultivation licences will authorize all of the same activities as the standard cultivation licence, but on a smaller scale.

    Thus, we may see a robust artisanal legal cannabis market in Canada. We query whether this model will work across the country, especially given the proposed distribution models announced by some provinces, such as Ontario. Instead, what we may see is a concentration of micro-cultivators in certain provinces, such as British Columbia. Health Canada is seeking input on how to set the threshold for a "micro"-cultivator and is considering making it dependent on plant count, size of growing area, total production and/or gross revenue.

  • Nursery licences will authorize the growing of cannabis plants to produce starting material (seed and seedlings) for commercial and personal cultivation (where permitted), and to enable the development of new varieties of high-quality cannabis. Nursery licence holders will be permitted to sell live plants and seeds to licenced cultivators, licenced producers and research authorization holders.

  • Industrial hemp licences will authorize the cultivation of industrial hemp plants (those containing 0.3% THC or less) and the production and sale of seeds and grains. Additionally, it is proposed that industrial hemp licences would authorize the use of whole hemp plants, including the leaves, flowers and branches, which cannot be used under the current regime and contain high levels of CBD. This is something the Canadian industrial hemp industry has been advocating for a number of years.

Similarly, Health Canada has proposed two types of processing licences:

  • Standard processing licences will authorize the production, packaging and labelling of cannabis products for public consumption. Authorized activities will include manufacturing cannabis oil (and intermediary products such as cannabis resin), synthesizing phytocannabinoids, manufacturing other authorized products (e.g., pre-filled cannabis oil capsules or oral sprays) and/or packaging and labelling of products for sale to the public.

  • Micro-cultivation licences will authorize all of the same activities as the standard processing licence, but on a smaller scale.

Additional proposed licences/authorizations include:

  • Federal sale licences, which will authorize sales of for medical purposes (similar to the current system under the ACMPR) and sales of cannabis for non-medical purposes to adults in provinces/territories that have not established a retail framework.

  • Analytical testing licences will authorize the possession of cannabis by independent, third-party laboratories for the purpose of analytical testing.

  • Import and export licences will authorize the import or export of cannabis for medical or scientific purposes.

  • Research licences will authorize activities with cannabis for research and/or development by persons who are not otherwise permitted to conduct such activities under another licence or permit. This licence will not permit sales, except to enable commercialization of novel research and development, i.e., the sale of new plant genetics.

Specific requirements for each class of licence will be set out by regulation; however the Proposed Approach provides some information about what we're likely to see in the regulations, including: requirements to notify local authorities; licence terms of up to five years; security requirements; and rules for packaging (tamper- and child-resistant) and labelling (similar to current label requirements for cannabis for medical purposes).

Notably missing from the federal proposal is the provision of licences for distribution and warehousing. It remains unclear how, if at all, companies will be able to participate exclusively in these activities.  

Status and next steps

To meet the government's commitment to bringing the proposed Cannabis Act into force by July 2018, final regulations will be published in Canada Gazette Part II as soon as possible after the act receives royal assent.


About Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global law firm. We provide the world's preeminent corporations and financial institutions with a full business law service. We have 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

For more information about Norton Rose Fulbright, see nortonrosefulbright.com/legal-notices.

Law around the world
nortonrosefulbright.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions