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Study: Pandemic likely not associated with increase in cannabis sales in Canada

A new study says the increased supply of products and cannabis stores attributed to cannabis sales growth in Canada from 2020-2021, is not the COVID-19 pandemic. 

The study, published in the Drug and Alcohol Review, comes from several Canadian researchers in Ontario. 

Although numerous media reports over the past two years have attributed an increase in cannabis sales in Canada to the COVID-19 pandemic and associated lockdowns and/or stay-at-home-measures, the study argues that sales trends are more connected to an increasing supply and diversity of cannabis products and retail outlets.

“Our results suggest the pandemic was not associated with an immediate sales increase and that the sales acceleration during the pandemic could be explained by new product arrivals and other industry factors,” the report notes, adding that increasing cannabis sales during the pandemic were consistent with pre-existing trends and increasing store numbers. 

Although the market did experience increased growth in March 2020 when many covid-related measures were implemented, researchers say they found little data to support a cause-and-effect and cautions against this perception. 

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Cannabis store numbers in Canada increased from 178 in January 2019 to 707 in January 2020, and to 1,398 in January 2021, according to data cited in the report. Retail sales also grew from $55 million in January 2019, to $154 million in January 2020 and $279 million in January 2021.

Looking at this sales data from March 2019 to February 2021, the researchers do not entirely rule out covid-related impacts but emphasize that the arrival of new products like edibles or extracts that also began to become more available in early 2020, along with a rapid increase in retail stores was the more likely cause. 

National monthly legal cannabis retail sales, from March 2019 to February 2021, in Canadian dollars per resident age 15+. Dots represent observed monthly sales, solid lines represent regression-predicted sales assuming a March 2020 interruption and vertical bars represent total licensed cannabis stores. The vertical dashed line separates the pre-pandemic and pandemic periods. Image via study.

“Our study found three principal results,” continues the report. “First, rising store numbers and ongoing market trends explained most sales growth during 2020–2021, but sales grew more than what those two factors alone would have predicted. Second, there was no statistically significant or economically meaningful level change in March 2020, when pandemic responses began; but a sales drop was observed in January 2020, perhaps due to a post-holiday spending slump. Third, there was a modest but statistically significant slope change, as month-over-month sales growth accelerated during 2020–2021: the acceleration’s timing better fit January’s increasing product selection than March’s increasing pandemic stressors, though we cannot rule out the latter.”

This study was supported by a project grant (452360) from the Canadian Institute for Health Research (CIHR).

Featured image via BlogTO

Health Canada: Temporary COVID measures extended again for cannabis industry

Health Canada has again extended their temporary COVID-19 measures, this time until March 31, 2022.

The newest extension, announced in an email to licence holders today, once again relates to the administration of the Cannabis Act and its regulations, providing more flexibility for licence holders and the regulator as they manage various COVID-19 related issues. 

The extension relates to a notice sent out last March, which was set to expire at the end of this September, with the exception of two specific provisions. As with the previous extensions, the regulator will be prioritizing requests that support licence holder operations, on a case-by-case basis. 

The first provision relates to licence amendments and renewals, which were originally extended to address the needs of current licence holders. The second was several transitional provisions for sections 73 and 75 to 80 of the Regulations Amending the Cannabis Regulations (New Classes of Cannabis) concerning requirements for packaging and labelling, microbial and chemical contaminant limits, and the removal of “cannabis oil” as a class of cannabis.

Both of these will not be extended past September 30. The rest, listed here, will be extended until March 31, 2022.

Canada Post resuming some door-deliveries of cannabis

Canada Post resumed delivery of cannabis products to people’s doors at the end of August.

The decision, announced in early September, applies to all products requiring a proof of age, signature items and customs-owing items, including cannabis products.

The change comes after nearly 18 months of COVID-related restrictions, first announced in March 2020 to “help minimize points of close contact”. While packages that did not require a signature or other direct interaction with their postal delivery person could still safely be dropped off at the door, anything that needed a signature required the person to go to a postal centre to sign for and pick up their package. 

Cannabis products that are not from a commercial source, such as a friend sending up to 30 grams of dried cannabis (or its equivalent) has been allowed in Canada since legalization, and does not require an ID or signature upon delivery. 

The BC Cannabis store’s online portal recently noted the change on their website, noting that the new protocols for Canada Post will involve the postal carrier to ask to “verify your age by displaying a piece of government ID and then being asked for a ‘verbal’ signature that will be acknowledged to complete delivery. If your address is not eligible for a verbal signature, the current process will be in effect and a card will be left for you to visit the post office for pick-up with government ID as proof of age and address.”

Postal employees will be required to wear a face covering and maintain a two-metre distance from customers. The changes only apply to homes with their own outdoor entrance. Those living in apartments or other such settings will still need to collect their packages at their local postal centre. 

In Ontario, provincial cannabis rules allows First Nations to ask the Ontario Cannabis Store to not deliver recreational cannabis and related products to their reserve. The province currently lists three communities who have made such a request. 

The following First Nations have passed relevant band council resolutions and have taken the steps necessary for the OCS to operationalize their request: Kingfisher Lake First Nation, Kitchenuhmaykoosib Inninuwug, and Kasabonika Lake First Nation.

Health Canada extending COVID measures for cannabis licence holders until September 2021

Health Canada announced today they will be extending several Covid-related measures until September 30 of this year. The regulator has extended these timelines several times since early 2020.

Following up on changes made last year in the wake of the COVID-19 pandemic, and responding to industry feedback, Health Canada says they will extend allowances for:

  • Licence amendments and renewals (prioritizing requests that support licence holder operations during the pandemic);
  • Import/export permits (accepting alternate ports of entry/exit provided that all other requirements of the permit are respected);
  • Accepting verbal attestations from patients during their registration application rather than provide a signature if they are not able to do so;
  • Witnessing the destruction of cannabis virtually (e.g., using a camera, provided that a copy of the video is retained and is noted in the destruction records);
  • Allowing for the security-clearance holder, or the alternate, to accompany the cannabis until it enters and returns from an off-site facility for antimicrobial treatment or destruction, to respect physical distancing rules of the facility operating under a contract with the licence holder. This is provided that the off-site facility is permitted to possess and obtain cannabis;
  • Packaging and labelling (accepting a packaging date that is plus/minus 4 days of the printed packaging date on the label, provided records are kept in the event of recalls); and,
  • Conducting activities that do not require physical possession of cannabis off-site, provided that all requirements of the Cannabis Act and the Cannabis Regulations apply, and records must be kept and made available to Health Canada upon request.  These include:
Quality assurance·  Investigating complaints received in respect of the quality of the cannabis, provided that a complete investigation can be conducted off-site.
·  Batch record approval by the quality assurance person from a remote location, provided the quality of the cannabis can be adequately assessed without physical possession of cannabis, before it is made available.
Facilitating the sale of cannabis·  Answering phone calls
·  Registering medical patients
·  Helping individuals to navigate a website
·  Providing product information
·  Taking orders
Fulfilling recordkeeping and reporting requirements·  Entering data and information to comply with monthly reporting requirements for the cannabis tracking system

Virtual and On-site Inspections

The regulator says that inspections will continue to be delivered virtually, although some on-site visits will occur where needed. Licence holders requesting a sales amendment will still be requested to participate in a mandatory Compliance Promotion session with Health Canada inspectors.

Security Clearance Applications

The cannabis licensing program is also continuing to prioritize those licence amendment and security clearance applications that licence holders have identified as necessary to supporting their operations during the pandemic. In some cases, Health Canada says they may also allow licence holders to submit more security clearance applications than would normally be needed to fill key positions, and we will work to expedite those applications in partnership with the RCMP. This measure will also be in effect until September 30, 2021.

Regulations Amending the Cannabis Regulations (New Classes of Cannabis)

Following up on a memo from August 28, 2020, Health Canada will also be extending transitional provisions until September 30, 2021 for sections 73 and 75 to 80 of the Regulations Amending the Cannabis Regulations (New Classes of Cannabis) concerning requirements for packaging and labelling, microbial and chemical contaminants limits, and the removal of “cannabis oil” as a class of cannabis.

2020 Annual Promotions Reports – due on March 31, 2021

The annual reports for all promotions expenses that occurred between January 1, 2020 and December 31, 2020, are still due on March 31, 2021.

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