The voluminous regulations to Canada’s Cannabis Act are set to be published on July 11, 2018 and include a number of items that are consistent with indications provided by the government in the consultation process. This bulletin summarizes provisions likely to be of interest to licensed producers and their counterparties.

OUTDOOR GROW

Outdoor cultivation of cannabis is permitted, but cannot be mixed with indoor cultivation, or conducted adjacent to a school, public playground, daycare facility or other public place frequented mainly by individuals under 18 years of age. There are exemptions from certain equipment and sanitation requirements for outdoor grow operations.

EXPORT

Export is only permitted for medical and scientific purposes, and then only with a permit. Recreational export is prohibited.

LICENCES

Licences are required and available for cultivation, processing, analytical testing, sale, and research of cannabis.

Cultivation has several sub-classes of licences, particularly standard cultivation, micro-cultivation (limited to 200 square metres of cultivation area), and nursery (limited to 50 square metres and five kilograms for budding and flowering plants, which must be destroyed within 30 days after harvesting the seeds).

Processing has two sub-classes of licences: micro-processing (limited to 600 kilograms of dried cannabis annually) and standard processing.

Also available is a cannabis drug licence, which allows possession, distribution and handling of cannabis amongst pharmacists, hospitals and other medical professionals.

A person who intends to submit a licence application must provide written notice with certain details to local governments, fire authorities and police in advance of applying. The minister can impose conditions on a licence, and can suspend or revoke a licence for a wide variety of reasons. Changes to licences require an application process and updated local notices.

PRODUCTION PRACTICES

A number of detailed rules continue to apply to production and practices. There are strict limits for amounts of residue, microbial and chemical contaminants, and THC and THCA (tetrahydrocannabinol and tetrahydrocannabinolic acid, active components of cannabis). THC and THCA may not be added to cannabis products and may not exceed 10 milligrams per discreet unit of dried or fresh cannabis, or 30 milligrams of THC per millilitre of oil. Dried cannabis intended for inhalation must not be sold in discreet units of greater than one gram, and oil intended for ingestion must not be sold in units greater than 10 milligrams.

Other than cultivation by outdoor grow operations, cannabis must be produced, packaged, labelled, stored, sampled and tested in a building or part of a building that is designed, constructed and maintained in a manner that permits those activities to be conducted appropriately and under sanitary conditions. Cultivators can only use pest control products that are registered for use on cannabis under the Pest Control Products Act or are otherwise authorized for use under that act.

Cannabis products for the eye, or for disrupting the skin barrier, are prohibited.

SECURITY

Security clearances are required for officers, directors and other persons who are in a position to “exercise direct control” over a licensed entity, as well as other key employees such as the head of security, quality control person, master grower and their alternates.

Physical security for large licensees (i.e., those with a licence for standard cultivation, standard processing, licence for sale that authorizes the possession of cannabis; and a cannabis drug licence over 600 kilograms of dried cannabis per calendar year) have strict physical security measures including visual monitoring, intrusion detection systems, monitoring and restricted access. For micro cultivation, micro-processing and nursery licences, analytical testing, research licences, and cannabis drug licences below 600 kilograms of dried cannabis per calendar year, there are less onerous physical security measures.

PACKAGING & LABELLING

There are extensive restrictions on packaging and labelling of cannabis.

The immediate container in which a cannabis product, other than a cannabis plant or seeds, is packaged must:

  • Be opaque or translucent
  • Prevent contamination of the cannabis
  • In the case of dried cannabis, keep the cannabis dry
  • Have a security feature that provides reasonable assurance to consumers that it has not been opened prior to receipt
  • Meet certain requirements of a child-resistant package
  • Not contain more than the equivalent of 30 grams of dried cannabis

A cannabis plant must not be budding or flowering at the time of packaging. The container in which a cannabis plant is packaged must not contain more than four cannabis plants. The immediate container in which cannabis plant seeds are packaged must keep the seeds dry and not contain more than the equivalent of 30 grams of dried cannabis.

Branding is very limited. The interior and exterior surface of any container in which a cannabis product is packaged must not display any brand element, or image, other than as authorized by the regulations. Packages must be one uniform colour (which must not be metal or metallic, fluorescent, and must contrast with the yellow colour of the health warning message and the red colour of the cannabis symbol). The finish must be matte and smooth. The packaging must not be capable of emitting a scent or sound, or include any cut out window. A bar code may be displayed only once on any package. Labels must contain the contact information of the licence holder, class of cannabis, brand name, lot number, recommended storage conditions, packaging date, expiry date, and certain warnings.

ACCESS TO CANNABIS FOR MEDICAL PURPOSES REGULATIONS

A medical cannabis regime comparable to the existing Access to Cannabis for Medical Purposes Regulations (ACMPR) is included in the new regulations, as previously signalled by the federal government.

Transition

Existing ACMPR licences are transitioned into the new regime. Cultivators who meet the requirements for standard cultivation are deemed to have a standard licence. Smaller cultivators who are below the thresholds for the micro-cultivation licences or will become micro-cultivators, nurseries licensed under the ACMPR will get nursery licences and those with a licence to process cannabis oils or resins will receive processing licences. Those authorized to sell cannabis directly to patients under the ACMPR will receive a federal licence for sale for medical purposes. Many existing ACMPR licensed producers will likely be transitioned to several categories of licences under the new regime.

Likewise, those who hold existing licenses for research, processing, testing, and medical or scientific exports under the existing Narcotic Control Regulations are deemed to have comparable licences under the new regime.