Health Canada has published their scheduled updates to the Cannabis Regulations, Hemp Regulations, and Cannabis Act, streamlining some aspects of the regulations to benefit the legal cannabis market.
The regulation changes focus on five key areas: licensing, production, packaging and labelling, security, and record keeping. The government’s goal with these changes is to address some of the challenges expressed by the industry while maintaining the key public health and safety concerns within the federal Cannabis Act.
Although there have been other changes to the regulations since legalization came into force in October 2018, this is the most extensive package of regulatory changes so far.
While the regulatory changes are expected to increase regulatory costs for Health Canada, the agency says the regulatory burden and costs for small businesses will be reduced. An estimated total reduction in administrative burden on business is expected to be $7.8 million annually (in 2012 dollars).
Changes to the Cannabis Regulations
Research:
Organizations and individual researchers now do not need a research licence when conducting non-human or non-animal research while possessing no more than 30 grams of dried cannabis or its equivalent for research purposes at any given time.
The individual or organization will be permitted to produce cannabis for research purposes but not cultivate, propagate, or harvest it.
Micros and Nurseries:
The cultivation and processing limits for micro cultivators and micro processors have increased by a factor of four. Micro cultivators were previously limited to growing cannabis within a 200-square-meter canopy. That is now raised to 800 square meters. There is still no limit on how much volume of cannabis a micro cultivator can grow within this canopy space.
Micro processors were previously limited to processing up to 600 kg of dried cannabis or its equivalent. This is now raised to 2,400 kg.
Cannabis nurseries were previously limited to growing cannabis flower in a 50-square-meter space, harvesting up to 5 kg of cannabis flower for the purpose of seed production. That limit has now been increased to 200 square meters. Nurseries are still required to destroy the flower after the cannabis seeds have been harvested.
Quality Assurance Person (QAP):
The changes to the Cannabis Regulations also increase the number of alternate QAPs on staff. Previously, this was limited to no more than two; now, no such limit applies.
Cannabis Pollen
Cannabis pollen, previously not mentioned in the Cannabis Regulations, will now be allowed to be sold between licence holders.
Consumer info:
Licensed processors will no longer be required to provide printed copies of the consumer information document with every package of cannabis product sent.
COVID-19-era changes:
Several temporary changes made by Health Canada during the COVID-19 pandemic and subsequent shutdowns have now been made permanent. This includes removing the requirement to list the ports of entry and exit on import and export permits for cannabis and industrial hemp importers and exporters.
License suspensions:
The new changes make it possible for Health Canada to suspend any licences connected to a licence holder with any unpaid fees or have failed to submit a required statement of cannabis revenue for a licence as required under the Cannabis Fees Order.
Cannabis plant derivatives:
Derivatives made from non-viable cannabis seeds, mature stalks, and roots can be imported, exported, sold, and processed without a licence, with some restrictions based on potential cannabis content.
Industry Hemp
Amendments to Canada’s Industrial Hemp Regulations (IHR) remove the maximum THC concentration of 10 parts per million for industrial hemp grain derivatives. In addition, the testing requirements, labelling for wholesale sale, and import and export requirements have also been removed.
These changes will allow derivatives of non-viable industrial hemp grains to be imported, exported, sold, and processed without a licence or permit.
Cannabis Exemption (Food and Drugs Act) Regulations:
The reference to a food or cosmetic containing cannabis that consists only of industrial hemp grain derivatives is now exempt under the IHR.
Personnel and physical security:
The amendments to the Cannabis Regulations remove the requirement for the on-site presence of a security-cleared individual.
Cannabis cultivators and processors can now send cannabis for remediation (irradiation, etc) without a security-cleared person chaperoning the product. This also applies to the holder of a research licence or a cannabis drug licence.
In addition, the intrusion detection system requirement for a site perimeter has been removed. Any licensed operations areas where cannabis is not present and where no activities with cannabis are occurring will also not require any visual recording devices and intrusion detection systems to continually operate and be monitored.
The previous requirement for storage areas to have a “room within a room” and the requirement to record and retain a list of individuals entering or exiting the storage area has also been removed.
Federal licence holders will be required to keep just the visual recordings showing movement on the site perimeter, operations areas (indoor and outdoor), and storage areas for at least one year after the day on which they are made.
Pre-rolls and ethyl alcohol
The restriction on the weight limit of one gram for each discrete unit of dried cannabis that is intended to be consumed by inhalation, such as cannabis pre-rolls, is removed.
The use of ethyl alcohol as an ingredient in certain cannabis products will now be permitted beyond just the previously allowed cannabis extract products intended for ingestion and edible cannabis products. This now includes the use of ethyl alcohol as an ingredient in inhaled cannabis extracts up to a maximum net weight of 7.5 grams.
Cannabis Packaging:
Health Canada has made several changes to the cannabis packaging requirements, including now allowing cut-out windows on dried cannabis and allowing different colouring used on cannabis containers.
The co-packing of multiple immediate containers of edible cannabis products into an outermost container for dried or fresh cannabis, cannabis topical, and cannabis extract products is now allowed. The 30 gram (or equivalent) limit still applies to the outermost container.
The 10 mg THC limit for an outermost container of edible cannabis product is also removed, allowing for multiple discreet 10 mg THC cannabis edibles to be packaged together.
Cannabis labelling:
The use of QR codes on cannabis packaging containers will now be allowed, and the allowance for accordion or peel-back labels has been extended to all sizes of packages. This was previously only allowed on small cannabis containers.
Cannabis licence holders can also now use inserts and leaflets.
The font size of cannabinoid and potency information can now be as large as the required health warning message.
Cannabis products will now only be required to show the total THC and total CBD on the label, rather than “total” and “actual” THC and CBD levels. A 12-month transition period will be in place allowing producers to use existing, in-stock labels.
The requirement for equivalency to dried cannabis statements on cannabis product labels and the requirement to include a statement that “no expiry date has been determined” if stability studies have not been conducted are both removed. Packaging date information is also no longer required on the outermost packaging that contains multiple immediate containers, while the immediate containers will still be required to have this information.
A window of plus or minus seven days of the printed packaging date on the label will now be allowed (something started as a COVID-19-era exception).
Symbols on packaging, like a recycling logo, will now be allowed, but with some limitations.
Record-keeping and reporting
Cannabis licence holders will no longer be required to record the quantity of any substance that is applied to cannabis, the method of application, or the rationale for the application.
License holders will also no longer need to submit a notice of new cannabis product (NNCP) for dried cannabis products or fresh cannabis products prior to making them available for retail sale.
The requirement for licence holders to retain a document that lists the ingredients for cannabis extracts, cannabis topicals, or edible cannabis when they have sold, distributed, or exported those cannabis products is also being removed.
All record-keeping requirements for cannabis cultivation waste (cannabis leaves, shoots, and branches collected during propagation, cultivation, or harvesting of cannabis) and the requirement to have qualified individuals witness and attest to this material’s on-site and off-site destruction are removed. The address of the location at which the cannabis is destroyed and the description of the destruction method is also no longer required.
An annual report to the Minister outlining the amount of money they have spent on promotion is also removed, as is the need for licence holders to keep information on promotion-related expenditures and a description of the types of promotion to which the expenditures relate.
The need for cannabis licence holders to submit to Health Canada information showing whether any ownership interest or right held by a key investor was assigned or otherwise provided to any other person and other related details is also removed.
Licence holders that are wholly owned by a publicly traded company are now exempt from key investor reporting, as this is still required by other aspects of financial reporting.
Cannabis seeds sown by a license holder are now required to be measured and recorded by the number of seeds, not the net weight of those seeds.
Cannabis Tracking System Order
The monthly reported unit of measurement of unpackaged cannabis plant seeds is changed from kilograms to the number of seeds to align the information with that reported to the CRA.
Monthly reporting requirements relating to the weight of cannabis cultivation waste will no longer need to be included in the quantity of unpackaged cannabis if it either ceased to form part of, or was added to, the inventory during the previous month.
“The coming into force date of the Cannabis Tracking System Order (Cultivation Waste) will occur on the first day of the month following the coming into force of the Regulations Amending Certain Regulations Concerning Cannabis (Streamlining of Requirements). The delayed coming into force date for the Order will eliminate the potential of having both the weight and number of unpackaged seeds being reported in a single reporting period, as well as the potential of having cultivation waste both captured and uncaptured in the same reporting period.”
Otherwise, these changes come into force on the day on March 12, 2025.
The full document can be read here.
The total estimated compliance cost savings for licence holders from these changes over the long term is nearly $18 million. The total administrative cost savings for licence holders is estimated to be more than $24 million.
