The federal government has announced some changes to the cannabis regulations that will benefit the cannabis beverage industry and the research community. The changes came into force on December 2, 2023, and will be published in the Canada Gazette, Part II on December 21, 2023.
Cannabis beverages get a higher possession limit
One of the most significant changes is the increase in the public possession limit for cannabis beverages. Previously, an adult could only possess up to five 355 mL standard-sized beverage cans (approximately 1.8 L) of cannabis beverages for non-medical purposes. This was equivalent to 30 grams of dried cannabis, the general possession limit for cannabis products.
However, this limit was considered impractical and unfair by the cannabis beverage industry, as it did not reflect the actual potency and volume of the products. Cannabis beverages typically have low THC concentrations, ranging from 2 to 10 mg per can. This means that a consumer would have to drink a large amount of liquid to experience the same effects as smoking or vaping a small amount of dried cannabis.
The new regulations increase the possession limit for cannabis beverages to forty-eight 355 mL standard-sized beverage cans (approximately 17.1 L). This is equivalent to 2.1 grams of dried cannabis per can, which is more in line with the average THC content of cannabis beverages. The new limit will allow consumers to buy and carry more cannabis beverages at a time, and will also reduce the packaging and environmental impact of the products.
The cannabis beverage industry welcomed the change, saying that it will help the sector grow and compete with the illicit market. According to the Cannabis Council of Canada, the cannabis beverage market in Canada was worth $15.9 million in 2023, and is expected to reach $529 million by 2025. The council also said that the new regulations will create more jobs and innovation in the industry.
Cannabis research and testing get streamlined
Another change that will have a positive impact on the cannabis sector is the facilitation of non-therapeutic research with human participants. This means that cannabis licence holders will be able to conduct product testing and sampling with consumers, without requiring additional authorizations from Health Canada. This will allow the industry to gather more feedback and data on the quality, safety, and efficacy of their products, especially for new categories such as edibles, beverages, and vape pens.
The new regulations will also allow analytical testing licence holders and government labs to produce, distribute, and sell cannabis reference standards and manufacture and assemble test kits. These are essential tools for measuring the potency and purity of cannabis products, and ensuring compliance with the regulations. The new rules will make these tools more accessible and affordable for the cannabis industry and the research community.
Additionally, the new regulations will expand the acceptable qualifications for the head of laboratory position, which is responsible for overseeing the testing and analysis of cannabis products. Previously, the head of laboratory had to have a bachelor’s degree in chemistry or a related field, and at least two years of experience in analytical testing. The new rules will allow the head of laboratory to have a diploma or certificate in a relevant field, and at least four years of experience in analytical testing. This will increase the pool of qualified candidates for the position, and address the labour shortage in the cannabis testing sector.
Other regulatory changes still in the works
The changes announced on December 2, 2023, are part of the ongoing regulatory review and modernization process that Health Canada is undertaking for the cannabis sector. The regulator said that it is committed to supporting a diverse and competitive legal cannabis industry, while protecting public health and safety.
However, there are still other regulatory changes that are pending or proposed, and that could have a significant impact on the cannabis sector. For example, Health Canada proposed restrictions on the flavouring of cannabis extracts and vape pens in 2021, which are expected to come into force no earlier than 2022. The proposed rules would prohibit the use of any flavours or additives that could appeal to youth, such as confectionery, dessert, or soft drink flavours. The only exception would be for flavours or additives that are naturally present in cannabis, or that are derived from cannabis or other botanical sources.
The proposed flavour restrictions have been met with mixed reactions from the cannabis industry and consumers. Some argue that the rules are too strict and arbitrary, and that they will limit consumer choice and product innovation. Others support the rules as a necessary measure to prevent youth access and consumption of cannabis products, and to align with the regulations for tobacco and nicotine vaping products.
Another regulatory issue that is still unresolved is the taxation of cannabis products. The cannabis industry has been calling for a reform of the excise tax system, which currently applies a flat rate of $1 per gram or 10% of the sale price, whichever is higher, to all cannabis products. The industry argues that this system is unfair and inefficient, as it does not reflect the actual potency and value of the products, and that it creates an incentive for consumers to buy high-THC products or turn to the illicit market.
The federal government has acknowledged the need for a review of the cannabis tax system, and has launched a consultation process with the provinces and territories, the industry, and other stakeholders. However, no concrete changes have been announced yet, and the process is expected to take several months or years to complete.
