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What to Expect in 2019: Cannabis Edibles, Extracts and Topicals

2018 marks Canadian history—it was the year that recreational cannabis was legalized in Canada.

On December 22, 2018, the Government of Canada released its proposed regulations to amend the Cannabis Regulations (the “Regulations”), which address the legalization and regulation of cannabis edibles, extracts and topicals, and are expected to come into force by October 2019. Health Canada also launched a 60-day public consultation on the draft Regulations in which it will be taking comments from the public and interested stakeholders through written submissions and an online questionnaire.

What you need to know

Below are the highlights from the Regulations:

  1. New Classes of Cannabis Products

The Regulations create three new classes of cannabis products that may be sold by authorized persons.

  • Edible cannabis: Cannabis-infused food and beverage products;
  • Cannabis extracts: Products that are produced using extraction processing methods or by synthesizing phytocannabinoids; and
  • Cannabis topicals: Cannabis-infused products which are intended to be used on external body surfaces (e.g., skin, hair and nails).

A processing licence under the Regulations would be required in order to produce, package and label the proposed new classes of cannabis products.

  1. Limits on THC

The Regulations place limits on the amount of THC that may be contained in the new classes of cannabis products, both for individual units and in a single package:

  • Edible cannabis: There would be a limit of 10 milligrams of THC per unit and per package. For example, a package could contain one unit of edible cannabis that contains 10 milligrams of THC or two discrete units that each contain 5 milligrams of THC.
  • Cannabis extracts: As is currently the case for cannabis oil, there would be a limit of 10 milligrams of THC per discrete unit that is intended to be ingested or for nasal, rectal or vaginal use, such as a capsule. In addition, there would be a new limit of 1,000 milligrams of THC in a single package. For example, a package could contain 100 capsules of an extract that each contain 10 milligrams of THC or 200 capsules of an extract that each contain 5 milligrams of THC.
  • Cannabis topicals: There would be a limit of no more than 1,000 milligrams of THC in a package.
  1. Restrictions on Ingredients and Additives

The Regulations place certain restrictions on the ingredients and additives that may be contained in the new classes of cannabis products.

Edible Cannabis:

  • All edible cannabis products must be “shelf stable”, meaning they cannot require refrigeration or freezing;
  • Aside from cannabis itself, only food and food additives could be used as ingredients in edible cannabis. Edible cannabis products could not be fortified with vitamins or mineral nutrients;
  • The use of meat products, poultry or fish as ingredients is banned, except for dried meat, poultry or fish;
  • The Regulations allow for the use of ingredients that contain naturally occurring caffeine, such as chocolate, tea or coffee, provided the total amount of caffeine in a package does not exceed 30 milligrams. However, the use of caffeine as a food additive would be prohibited; and
  • The Regulations would prohibit edible cannabis products from being mixed into an alcoholic beverage.

Cannabis Extracts:

  • The Regulations allow cannabis extracts to contain flavouring agents in addition to one or more carrier substances and any substance necessary to maintain the quality or stability of the cannabis product. Cannabis extracts could not contain, however, ingredients that are sugars, sweeteners or sweetening agents, or added vitamins or mineral nutrients; and
  • The use of ethyl alcohol would be permitted in cannabis extracts that are intended to be ingested (e.g., a tincture). However, the Regulations prescribe a maximum package size of 7.5 grams for all cannabis extracts that contain ethyl alcohol.

Cannabis Topicals:

  • No ingredient that may cause injury to the health of consumer may be used in cannabis topicals. Producers may look to Health Canada’s Cosmetic Ingredient Hotlist for guidance.
  1. Restrictions on Alcohol – Related Branding

In addition to the prohibitions against ethyl alcohol in cannabis edibles, the Regulations also place restrictions on packaging and labelling with regard to alcohol. The Regulations would prohibit all representations that associate a cannabis product, its packaging or its labelling (including its brand element) with an alcoholic beverage. For example, it would be prohibited to use alcoholic beverage-related terms, such as “beer” or “wine”, on cannabis products. Health Canada has advised that it would similarly be prohibited for the company name or logo of a company that manufactures alcoholic beverages to be used on a cannabis product.

  1. Cannabis Oil

It is proposed that a 6-month transition period would be provided for activities in relation to cannabis oil. During this proposed 6-month transition period, cannabis oil could continue to be sold as a class of cannabis (by federal licence holders and provincially and territorially authorized distributors and retailers), under the current rules. Following the 6-month transition period, cannabis oil would be subsumed under the new product classes.

  1. Packaging and Labelling Restrictions

The Regulations maintain the core packaging and labelling requirements that apply to all cannabis products that are currently legal—plain, child-resistant packaging containing the standardized cannabis symbol, a health warning, and the THC and CBD content. In addition, the Regulations would require a list of ingredients, allergens and nutritional information.

For edible cannabis, there would be a requirement to use “food-grade” packaging for the immediate container of edible cannabis and for any wrappers—that is, packaging that meets requirements set out in the Food and Drug Regulations, and Safe for Canadians Regulations in place for food. Co-packaging of edible cannabis and a food would be prohibited, as would the co-packaging of more than one class of cannabis in the same container.

The Regulations also prohibit any health or dietary claims for any of the new classes of cannabis products, as well as ban placing flavours that would be appealing to youth on the packaging of cannabis extracts.

  1. Restrictions on Production and Manufacturing

Licence holders conducting activities with the new classes of cannabis would be subject to the same strict physical and personnel security requirements established under the current Cannabis Regulations.

The Regulations would create additional “good production practices” to prevent contamination of cannabis products and to address the risk of foodborne illness associated with edible cannabis. For example, it is proposed that production of edible cannabis at a site where conventional food products are also being manufactured for sale could only be done if the edible cannabis was being produced within another building at the licensed site.

If you or your organization plan to engage with cannabis edibles, cannabis extracts or cannabis topicals in any way, be sure to understand how these new Regulations may affect you. The McCarthy Tétrault Cannabis Law Group is always up to date on changes to the legislation and can assist clients successfully navigate the evolving demands of the high-growth cannabis market in Canada and abroad.

For more information, contact Ranjeev Dhillon, Rami Chalabi, Jessica Firestone, or Leah Ostler.