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Cessation of the Transitional Provisions in the Regulations Amending the Cannabis Regulations (New Classes of Cannabis)

On August 28, 2020, Health Canada issued an email notice reminding federal cannabis licence holders of the cessation of the transitional provisions in the Regulations Amending the Cannabis Regulations (New Classes of Cannabis). A second email notice was sent by the Department on October 16, 2020 announcing the update to online list of licence holders regarding the removal of “cannabis oil” as a class of cannabis. In this blog post, we will summarize the content of these notices and how they affect current holders of a cannabis licence. Keep on reading to learn more!

Currently, the following items are set out in the Cannabis Regulations:

  • Licences are required for:
    – cultivating and processing cannabis
    – sale of cannabis for medical purposes
    – analytical testing of and research with cannabis
  • Permits are required to import or export:
    – cannabis for scientific or medical purposes
    – industrial hemp
  • Licence holders are subject to strict physical and personnel security requirements
  • Plain packaging is required for cannabis products. The Regulations set out strict requirements for:
    – logos
    – colours
    – branding
  • Cannabis products must also be labelled with:
    – mandatory health warnings
    – standardized cannabis symbol
    – specific information about the product
  • Access to cannabis for medical purposes continues to be provided for patients who need it
  • Manufacturers of prescription drugs containing cannabis, while primarily subject to the Food and Drugs Act and its Regulations, are also subject to certain regulatory requirements set out in the Cannabis Regulations

On October 17, 2019, the legal sale of cannabis products belonging to the edible cannabis, cannabis extracts, and cannabis topicals classes was authorized under the Cannabis Act. At the same time, the Regulations Amending the Cannabis Regulations (New Classes of Cannabis) came into force to address the public health and public safety risks of these new classes of cannabis. The amendments to the Cannabis Regulations included new packaging and labelling requirements, and microbial and chemical contaminants limits, which took effect immediately for products belonging to these new classes.

To ensure a smooth transition and allow licence holders to adjust and adapt their processes to comply with new regulatory requirements, the Regulations Amending the Cannabis Regulations (New Classes of Cannabis) included several transitional provisions which licence holders were permitted to practice for a given amount of time. However, these transitional measures will now cease to have effect (as of October 17, 2020). An outline of Health Canada’s planned approach to the oversight related to these provisions can be found below. Furthermore, in anticipation of this transition, “oil” has been removed as a cannabis class from the online list of Licensed Cultivators, Processors and Sellers of cannabis under the Cannabis Act as of October 16, 2020. The following note has been added to the web page to explain the removal:

Note: As of October 17, 2020, cannabis oil is no longer a separate product class under Schedule 4 of the Cannabis Act. Oil products have been reclassified either as cannabis extracts, edibles or topical products, depending on the intended use. Oil has therefore been removed from the table below.

Approach for Cessation of the Transitional Provisions

Amidst the COVID-19 global pandemic, the measures that governments across Canada have implemented are having an impact on the normal operations of Canadian business, including businesses focused on the cultivation, production, distribution and sale of cannabis.

As a result, Health Canada will be temporarily adjusting its approach in its administration and enforcement as it relates to the transitional measures in sections 73 and 75 to 80 of the Regulations Amending the Cannabis Regulations (New Classes of Cannabis) that will cease to have effect on October 17, 2020. See below for a brief description of the relevant transitional provisions and their implications for regulated parties:

Section 73 of the Regulations Amending the Cannabis Regulations – Removal of “cannabis oil” as a class of cannabis

As per the Order Amending Schedules 3 and 4 to the Cannabis Act, on October 17, 2020, “cannabis oil” will be deleted as a class of cannabis that an authorized person may sell under Schedule 4 to the Cannabis Act.

After this date, federal licence holders and provincially or territorially authorized distributors and retailers will no longer be permitted to sell any cannabis products belonging to the “cannabis oil” class. However, given the operational challenges posed by COVID-19 for cannabis businesses, Health Canada will temporarily adjust its approach in its administration and enforcement decisions related to this requirement until March 31, 2021. This means that Health Canada will not take enforcement action should holders of a federal processing licence, a federal licence for sale for medical purposes, or provincially or territorially authorized distributors and retailers continue to sell or deplete inventory up to March 31, 2021.

This adjustment in approach by Health Canada does not prevent the Department from taking actions to address activities that may pose a risk to public health and safety. In addition, despite these unprecedented circumstances, regulated parties are still encouraged to continue to make best efforts to comply with these upcoming changes.

Operational changes to federal licences

For federal licence holders who are authorized for the sale of cannabis oil prior to October 17, 2020, as of this date, the licences and corresponding conditions on these licences will be updated by Health Canada to remove all references to the sale of cannabis oil the next time the licence is either amended or renewed.

Operational changes to the Notice of New Cannabis Product (NNCP)

As part of the transition, Health Canada has requested that federal licence holders resubmit the information about their existing cannabis oil products that are being reclassified as edible cannabis, cannabis extracts, or cannabis topicals, in the form of a NNCP via the Cannabis Tracking and Licensing System (CTLS). Licence holders are asked to provide the new class of cannabis for the products previously submitted to Health Canada (cannabis oil products) as well as a reference to the original NNCP ID number as this will permit Health Canada to cross-reference the new NNCP with the original submission. This will increase Health Canada’s efficiency in conducting product reviews and keeping its information up to date. The information should be sent to: hc.notice-cannabis-avis.sc@canada.ca. It’s important to note that submission of these new notices will not impact the initial 60-day timeline, meaning that the date of sale from the original NNCP will still be in effect.

Moving forward, licence holders should use the new classes of cannabis when submitting a NNCP. Furthermore, NNCPs for products identified as belonging to the “cannabis oil” class will not be accepted as valid notices, given that the 60-day notice period extends past the date on which the class of cannabis oil ceases to exist.

Section 75 of the Regulations Amending the Cannabis Regulations – dried and fresh cannabis – microbial and chemical contaminant limits

Dried cannabis and fresh cannabis that are cannabis products – or that are contained in a cannabis accessory that is a cannabis product – that have been produced to meet the microbial and contaminant limits according to subsection 94(1) of the version of the Cannabis Regulations that was in force prior to October 17, 2019 may no longer be sold by the holder of a licence under the Cannabis Act after October 16, 2020. As of October 17, 2020, these products must meet the requirements of subsection 93(3) of the Cannabis Regulations.

Section 76 of the Regulations Amending the Cannabis Regulations – Cannabis product packaging – more than one immediate container

After October 16, 2020, as per the Regulations, holders of a federal licence for cultivation (standard or micro) or a licence for processing (standard or micro) will no longer be permitted to sell dried cannabis, fresh cannabis, cannabis plants or cannabis plant seeds that are cannabis products – or that are contained in a cannabis accessory that is a cannabis product – with an outer container that contains more than one immediate container.

Section 77 of the Regulations Amending the Cannabis Regulations – Cannabis product labelling – Health Warning Messages

After October 16, 2020, as per the Regulations, holders of a federal licence for cultivation (standard or micro) or a licence for processing (standard or micro) will no longer be permitted to sell dried cannabis, fresh cannabis, cannabis plants or cannabis plant seeds that are cannabis products – or that are contained in a cannabis accessory that is a cannabis product – that are labelled with Health Warning Messages set out in the document entitled Cannabis Health Warning Messages, as it read immediately prior to October 17, 2019.

Section 78 of the Regulations Amending the Cannabis Regulations – Cannabis product labelling –statement on quantity of cannabis

After October 16, 2020, as per the Regulations, holders of a federal licence for cultivation (standard or micro) or a licence for processing (standard or micro) will no longer be permitted to sell fresh cannabis or cannabis plant seeds that are cannabis products – or that are contained in a cannabis accessory that is a cannabis product – unless they are labelled with a dried cannabis equivalency statement in accordance with paragraph 123(1)(g) of the Cannabis Regulations.

Section 79 of the Regulations Amending the Cannabis Regulations – Cannabis product labelling – dried and fresh cannabis

After October 16, 2020, as per the Regulations, holders of a federal licence for processing (standard or micro) will no longer be permitted to sell dried cannabis or fresh cannabis that are cannabis products – or that are contained in a cannabis accessory that is a cannabis product –  unless they are labelled in accordance with sections 124, 124.1, and 125 of the Cannabis Regulations. For example, this means that the concentrations of delta-9-tetrahydrocannabinol (THC) and cannabidiol (CBD) that are required to appear on the label of these cannabis products must be reported in milligrams per gram rather than as a percentage w/w.

Section 80 of the Regulations Amending the Cannabis Regulations – Cannabis product labelling – size restrictions on a brand element that is an image

After October 16, 2020, as per the Regulations, holders of a federal licence for cultivation (standard or micro) or a licence for processing (standard or micro) will no longer be permitted to sell dried cannabis, fresh cannabis, cannabis plants, or cannabis plant seeds that are cannabis products – or that are contained in a cannabis accessory that is a cannabis product – if they display a brand element that is an image which is larger than what is permitted by subparagraph 130(9)(d)(ii) of the Cannabis Regulations.

Ultimately, it remains the responsibility of parties engaging in activities related to cannabis, cannabis accessories and services related to cannabis, to understand and comply with the Cannabis Act and its regulations. The adjustment in approach by Health Canada does not prevent the Department from taking actions to address activities that may pose a risk to public health and safety. Furthermore, Health Canada reserves the ability to make further adjustments regarding these operational changes at any point. The priority will continue to be on the protection of public health and public safety, including the risk of cannabis being diverted to an illicit market or activity. Should any non-compliance with the Cannabis Act or Regulations be identified, Health Canada will not hesitate to take further compliance and enforcement action, if warranted.

How we can help you

At Cannabis License Experts, we provide you with the guidance to plan your cannabis business, acquire funding, navigate the legal requirements, and acquire the appropriate licence for your operations. As the Canadian cannabis industry develops, more and more licensed producers will be needed to meet the demands of consumers.

Cannabis License Experts offers support from day one of starting your cannabis business, including strategic planning, floor plan preparation, site audits, SOPs, Preventive Control Plans (PCPs) and more.

Our Edibles Compliance division can provide you with a solid plan for your edibles business to help get your products on store shelves.

Contact us today to discover how we can license and legalize your cannabis business to meet federal or provincial regulations.

Resources

https://www.canada.ca/en/health-canada/services/drugs-medication/cannabis/laws-regulations/regulations-support-cannabis-act.html

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