Health Canada’s Updates on Cannabis Licensing and COVID-19

On March 24, 2020, Health Canada advised federal cannabis licence holders of its decision to temporarily adjust its approach to administering and enforcing the Cannabis Act & Regulations, due to COVID-19 and its shift to teleworking. Health Canada stated that temporary adjustments will be in place until May 1, 2020, at which time they will be re-evaluated. Furthermore, in their email to licence holders on March 24, Health Canada committed to answering the questions they have received from licence holders, to help manage the operational and logistical difficulties faced in light of COVID-19.

On March 30, Health Canada sent out a follow-up communication to federal cannabis licence holders, to share answers regarding the frequently asked questions mentioned above. The experts at CLE have summarized some of the key points from Health Canada’s email:

• Even in the current socio-political climate, licence holders are expected to continually comply with the Cannabis Act & Regulations. Non-compliance will be addressed through enforcement action, if needed. Specific focus points include quality control, testing, recalls, and security. Licence holders must have a risk mitigation plan in place so Good Production Practices (GPP), physical security & record-keeping regulatory requirements can be maintained. The risk mitigation plan should focus on specific security-cleared roles and regulatory duties.
• At the moment, Health Canada will focus mainly on licence amendments and security clearance applications that are deemed “high priority” (e.g., adding storage rooms to the licensed operations area, or changing personnel in operational roles.) High priority amendments or security clearance applications must be flagged to Health Canada with “COVID-19” in the email subject line, along with a clear explanation as to why the amendment or security clearance is critical to current operations.
• Health Canada will continue reviewing applications for new cannabis licences and security clearance applications during the COVID-19 pandemic. However, applicants may face some disruptions and delays. Health Canada will continue to review and assess evidence packages for fully built sites, and process associated security clearance applications.
• For the time being, sales inspections requiring on-site verifications will be postponed, thus delaying sales licence issuance. A limited number of on-site licensing inspections are still being carried out by Health Canada, and they may consider conducting additional inspections on a case-by-case basis”, as needed. Inspections will continue to be focused on activities representing the highest risk to public health and safety. Newly licensed processors can manufacture, package and label cannabis products to the final form, however, without a sales licence they are restricted to selling packaged product to another processor who can then sell to a distributor/retailer.
• Licence holders who are lacking security-cleared individuals in operational roles due to self-isolation/illness may temporarily designate a suitable non-security cleared alternate person, based on an “internal risk assessment”. You must notify Health Canada of the security-cleared substitute person, identifying their role and name. They must be capable of fulfilling the applicable regulatory duties, and have not had a cancelled or suspended security clearance. However, Health Canada approval is still required for adding a Quality Assurance Person (QAP) due to the technical requirements of this role. Any such applications would be a priority.
• Licence Holders may replace their Responsible Person with an alternate Responsible Person, if the latter is unable to fulfill their role. Licence holders do not require approval to change their Responsible Person. However, they must notify Health Canada within 5 days of making the change.
• For licence holders looking for options to address a lack of storage capacity, Health Canada has stated that licence amendments to add storage capacity will be prioritized. There are flexible options via the licence amendment process, but regulatory requirements must be met as always. For example, licence holders can store at another licence holder’s site, but strict rules must be followed. BEWARE – storage of cannabis off-site at an unlicensed facility is risking your licence!
• Licence holders are still responsible for ensuring their products meet the requirements before they are made available for sale (e.g., limits on microbial and chemical contaminants, mandatory pesticide testing, and prohibitions on certain ingredients). Testing must be conducted by a laboratory that holds a licence for analytical testing under the Cannabis Act. The laboratory must also be a distinct entity that functions and reports independently of the licence holder requesting the analysis.
• Licence holders are responsible for ensuring the safekeeping of cannabis when distributing it, including transporting it. However, the regulations are not prescriptive as to how licence holders fulfill this requirement. A security-cleared individual is not required to accompany the cannabis during distribution. It should be noted that a security-cleared individual is still required to be present with cannabis at an authorized off-site location (e.g. irradiation or destruction site). A non-security cleared alternate appointed to act in a security cleared role could carry out this duty, as stated above, which provides some flexibility to licence holders who are lacking security cleared individuals on-site. As always, record keeping requirements must be maintained.
• A cannabis production facility would not be considered a “dwelling house” for staff/employees who are required to temporarily stay overnight and continue working to maintain critical business operations, such as watering and maintaining cannabis plants. However, licence holders are still responsible for ensuring that all Good Production Practices and record keeping requirements are met at the site, and should consider any health and safety legislation or regulations that may be applicable to the workplace.
• For licence holders that are unable to package cannabis products on the intended packaging date, Health Canada will accept a printed packaging date that is 4 or less days before or after the actual packaging date. Records of actual packaging dates must be retained and made available to Health Canada upon request.
• Licence holders should make all efforts to submit a complete monthly cannabis tracking system report on schedule (e.g. by the 15^th of every month) however, there will be flexibility if reports need to be updated or revised at a later date. Furthermore, the deadline for the 2019 annual promotions reports has been extended to June 30, 2020.
• Certain activities that do not require physical possession of cannabis may be conducted off-site by licence holders. These activities include:
  – Investigating complaints by the Quality Assurance Person
  – Batch record approval by the QAP (provided this can be adequately assessed without physical possession of cannabis)
  – Answering phone calls
  – Registering medical patients
  – Helping individuals navigate a website and providing product information
  – Taking orders
  – Entering data and information to comply with monthly reporting requirements

Licence holders who are interested in supporting COVID-19 relief efforts by temporarily converting their facility to manufacture products needed for the response (e.g. hand sanitizers) should notify Health Canada (approval not required). Licence holders must summarize in an email the measures that have, or will be, put in place to prevent the contamination of cannabis or ingredients to be used in the cannabis products. As well, incompatible activities must be kept separate from each other.

Health Canada reserves the right to further adjust its COVID-19 policies 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. Even in these exceptional circumstances, licence holders are expected to continue to comply with the Cannabis Act and its regulations.

In light of the current situation, licence holders may want to review their SOPs and Preventive Control Plan to address new or elevated risks related to the COVID-19 pandemic. Further guidance is available on the Public Health Agency of Canada’s webpage.

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