Regulations Amending Certain Regulations Concerning Cannabis Research and Testing and Cannabis Beverages: SOR/2022-251

Canada Gazette, Part II, Volume 156, Number 26

Registration
SOR/2022-251 December 2, 2022

FOOD AND DRUGS ACT
CANNABIS ACT

P.C. 2022-1260 December 2, 2022

Her Excellency the Governor General in Council, on the recommendation of the Minister of Health, makes the annexed Regulations Amending Certain Regulations Concerning Cannabis Research and Testing and Cannabis Beverages under

Regulations Amending Certain Regulations Concerning Cannabis Research and Testing and Cannabis Beverages

Cannabis Act

Cannabis Regulations

1 (1) Subsection 1(1) of the Cannabis Regulations footnote 1 is amended by adding the following in alphabetical order:

cannabis beverage
means edible cannabis that is intended to be consumed by drinking and has a concentration of 3% w/w or less of THC, taking into account the potential to convert THCA into THC. (boisson de cannabis)

(2) The portion of the definition drug in subsection 1(2) of the Regulations after subparagraph (b)(ii) is replaced by the following:It includes cannabis that is an active pharmaceutical ingredient as defined in subsection C.01A.001(1) of the Food and Drug Regulations. It also includes cannabis that is manufactured or sold for use in a clinical trial as defined in section C.05.001 of those Regulations that is not non-therapeutic research on cannabis. (drogue)

(3) Subsection 1(2) of the Regulations is amended by adding the following in alphabetical order:

fish
has the same meaning as in section 1 of the Safe Food for Canadians Regulations. (poisson)
marketing authorization,
except in paragraph 102(2)(a), has the same meaning as in subsection B.01.001(1) of the Food and Drug Regulations. (autorisation de mise en marché)
meat product
has the same meaning as in subsection B.01.001(1) of the Food and Drug Regulations. (produit de viande)
mineral nutrient
has the same meaning as in subsection D.02.001(1) of the Food and Drug Regulations except that it does not include sodium, potassium or chloride or compounds that include those elements. (minéral nutritif)
non-therapeutic research on cannabis
means research that involves the distribution of cannabis to human participants by the holder of a licence for research and that is not a clinical trial as defined in section C.05.001 of the Food and Drug Regulations for which the sale of cannabis is authorized in accordance with section C.05.006 of those Regulations. This definition does not include research
  • (a) related to the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or its symptoms, or the restoration or correction of organic functions, in human beings or animals;
  • (b) involving the distribution of cannabis that is
    • (i) represented for use in the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or its symptoms, or the restoration or correction of organic functions, in human beings or animals,
    • (ii) manufactured or sold by any person other than a licence holder referred to in paragraph 2(a) of the Cannabis Exemption (Food and Drugs Act) Regulations for use in the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or its symptoms, or in the restoration or correction of organic functions, in human beings or animals,
    • (iii) referred to in any of paragraphs 1(b) to (d) of the Cannabis Exemption (Food and Drugs Act) Regulations, or
    • (iv) referred to in paragraph 1(f) of the Cannabis Exemption (Food and Drugs Act) Regulations in respect of an experimental study as defined in subsection C.08.013(2) of the Food and Drug Regulations;
  • (c) involving the distribution of cannabis that contains any substance that is referred to in column 1 of Schedule 5 to the Act and that
    • (i) in the case of cannabis that is a cannabis product or that is contained in a cannabis accessory that is a cannabis product, does not meet the requirements set out in subsection 101.3(6) or section 102.2 or 102.3, and
    • (ii) in the case of any other cannabis, would not meet the requirements set out in subsection 101.3(6) or section 102.2 or 102.3 if it were a cannabis product or if it were contained in a cannabis accessory that is a cannabis product; or
  • (d) involving the participation of, or relating to, a young person. (recherche non thérapeutique sur le cannabis)
poultry product
has the same meaning as in subsection B.01.001(1) of the Food and Drug Regulations. (produit de volaille)
reference standard
means a standardized form of cannabis that is intended to be used as a measurement base when testing a substance to confirm its identity, concentration, quality or purity for a medical, laboratory, industrial, educational, law administration or enforcement, or research purpose. (étalon de référence)
vitamin,
except in subsection 101.3(3), has the same meaning as in subsection D.01.002(1) of the Food and Drug Regulations. (vitamine)
water activity,
except in section 102.5, means the ratio of the water vapour pressure of a meat product, poultry product or fish to the vapour pressure of pure water, at the same temperature and pressure. (activité de l’eau)

2 Section 4 of the Regulations is replaced by the following:

Authorized activities — federal or provincial laboratory

4 (1) Individuals who are involved in the testing of cannabis as a requirement of their duties at a laboratory that is operated by the Government of Canada or the government of a province are authorized to conduct the following activities:

Offer

(2) An individual who conducts an activity referred to in subparagraph (1)(a)(ii) or (iii) or paragraph (1)(b) is also authorized to offer to conduct that activity.

Use of an organic solvent

(3) An individual who conducts an activity referred to in subparagraph (1)(a)(ii) or paragraph (1)(b) is also authorized to alter or offer to alter the chemical or physical properties of cannabis by the use of an organic solvent when conducting that activity.

Authorized activities — accredited laboratory

(4) An individual who is involved in the testing of cannabis as a requirement of their duties at a laboratory that is designated as an accredited laboratory under section 2.1 of the Seeds Act is authorized to conduct the activities referred to in subparagraphs (1)(a)(i), (iii) and (iv), and to offer to conduct the activity referred to in subparagraph (1)(a)(iii), to the extent necessary to conduct the testing.

3 Section 5.2 of the Regulations is amended by adding the following after subsection (2):

Reference standard

(3) For the purposes of subsection 34(1) of the Act, the following persons are authorized to sell a reference standard that contains any substance that is referred to in column 1 of Schedule 5 to the Act:

4 The Regulations are amended by adding the following after section 5.3:

Reference standards — prohibition

5.4 A reference standard must not be used as an ingredient, be included in a cannabis product or be packaged and labelled for sale to a consumer at the retail level.

Reference standards appealing to young persons

5.5 For the purposes of section 31 of the Act, the following persons are authorized to sell a reference standard even if it has an appearance, shape or other sensory attribute or a function that there are reasonable grounds to believe could be appealing to young persons:

5 (1) The portion of paragraph 17(5)(b) of the Regulations before subparagraph (i) is replaced by the following:

(2) Subparagraph 17(5)(b)(ii) of the Regulations is replaced by the following:

(3) The portion of paragraph 17(5)(c) of the Regulations before subparagraph (i) is replaced by the following:

(4) Subparagraph 17(5)(c)(ii) of the Regulations is replaced by the following:

6 Subsection 19(4) of the Regulations is replaced by the following:

Non-application

(4) Subsections (1) to (3) do not apply in respect of a reference standard or a test kit.

7 (1) Subsections 22(1) to (3) of the Regulations are replaced by the following:

Authorized activities

22 (1) Subject to the other provisions of these Regulations, a holder of a licence for analytical testing is authorized to conduct those of the following activities that are authorized by the licence:

Offer

(2) A holder of a licence for analytical testing that is authorized to conduct the activity referred to in subparagraph (1)(a)(ii) or paragraph (1)(b) is also authorized to offer to conduct that activity.

Use of organic solvent

(3) A holder of a licence for analytical testing that is authorized to conduct the activity referred to in subparagraph (1)(a)(ii) or paragraph (1)(b) is also authorized to alter or offer to alter the chemical or physical properties of cannabis by the use of an organic solvent when conducting that activity.

(2) Section 22 of the Regulations is amended by adding the following after subsection (4):

Sale

(5) A holder of a licence for analytical testing whose licence authorizes the sale of cannabis is authorized to sell and distribute reference standards to any of the following:

8 Subsection 23(2) of the Regulations is replaced by the following:

Qualifications

(2) The head of laboratory must

9 (1) Subparagraphs 28(1)(b)(iii) to (v) of the Regulations are replaced by the following:

(2) Subparagraph 28(5)(b)(ii) of the Regulations is replaced by the following:

10 The Regulations are amended by adding the following after section 28:

Non-therapeutic Research on Cannabis

Requirements of Part 6

28.1 (1) The requirements of Part 6, other than those set out in subsection 102(6), apply to the following cannabis or cannabis accessory that is administered or distributed to a human participant in the conduct of non-therapeutic research on cannabis as if the cannabis or cannabis accessory were a cannabis product or will become one:

References to section 97

(2) For the purposes of subsection (1), any reference in Part 6 to subsection 97(1) or (2) should be read as a reference to paragraph (3)(a) or (b), respectively.

Variability limits

(3) Cannabis that is not a cannabis product — or that is contained in a cannabis accessory that is not a cannabis product — and that is administered or distributed by the holder of a licence for research to human participants in the conduct of non-therapeutic research on cannabis must not contain

Requirements — edible cannabis

(4) The holder of a licence for research that administers or distributes edible cannabis to human participants in the conduct of non-therapeutic research on cannabis must ensure that

Vitamins and mineral nutrients

(5) If the conditions set out in subparagraphs (4)(c)(i) to (iv) are met, the holder of a licence for research whose licence authorizes the production of cannabis may use a vitamin or mineral nutrient as an ingredient to produce edible cannabis that is administered or distributed to a human participant in the conduct of non-therapeutic research on cannabis and that is not a cannabis product or is contained in a cannabis accessory that is not a cannabis product.

Irradiated edible cannabis

28.2 The holder of a licence for research that administers or distributes irradiated edible cannabis to human participants in the conduct of non-therapeutic research on cannabis must ensure that the requirements set out in subsection 42(1) have been met in addition to the conditions set out in paragraph 28.1(4)(d).

Return of cannabis

28.3 (1) For the purposes of subparagraph 9(1)(a)(i) or (iii) of the Act, a human participant to whom cannabis was distributed in the conduct of non-therapeutic research on cannabis is authorized to return the cannabis to the holder of the licence for research from which the cannabis was received.

Parcel — requirements

(2) The participant who is returning cannabis under subsection (1) must, if they are sending or having delivered a total quantity of cannabis that exceeds the equivalent of 30 g of dried cannabis,

Record keeping — returned cannabis

28.4 A holder of a licence for research that receives cannabis from a human participant under section 28.3 must retain a document that contains the following information:

Destruction of returned cannabis

28.5 A holder of a licence for research must destroy any cannabis that has been returned to them by a human participant under section 28.3 no later than 90 days after the day on which the non-therapeutic research on cannabis ends.

11 Section 29 of the Regulations is amended by striking out “and” at the end of paragraph (j), by adding “and” at the end of paragraph (k) and by adding the following after paragraph (k):

12 Section 30 of the Regulations is amended by striking out “and” at the end of paragraph (c), by adding “and” at the end of paragraph (d) and by adding the following after paragraph (d):

13 Section 31 of the Regulations is amended by striking out “and” at the end of paragraph (d), by adding “and” at the end of paragraph (e) and by adding the following after paragraph (e):

14 Section 79.2 of the Regulations is replaced by the following:

Non-application — holder of licence for analytical testing or research

79.2 Sections 80 to 87.1 do not apply to

Non-application — reference standard

79.3 The requirements of this Part do not apply in respect of a reference standard and anything that will be used as an ingredient in the production of a reference standard.

15 Subsection 102(7) of the Regulations is repealed.

16 The Regulations are amended by adding the following after section 102.7:

Exemption — sale of cannabis beverage

102.8 (1) A person that is authorized to sell cannabis, other than the holder of a licence for processing, is exempt from the application of section 25 of the Act in respect of the sale of a cannabis beverage that is a cannabis product if

Exemption — distribution of cannabis beverage

(2) A licence holder that is authorized to distribute cannabis, other than the holder of a licence for processing, is exempt from the application of subsection 106(1) in respect of the distribution of a cannabis beverage that is a cannabis product if

17 Section 137 of the Regulations is replaced by the following:

Requirement — cannabis other than a cannabis product

137 Unless the requirements in section 138 have been met,

18 Paragraph 138(1)(a) of the Regulations is replaced by the following:

19 (1) Subsection 225(1) of the Regulations is amended by adding the following after paragraph (d):

(2) Subsection 225(1) of the Regulations is amended by striking out “and” at the end of paragraph (e) and by adding the following after that paragraph:

(3) The portion of subsection 225(1.1) of the Regulations before paragraph (b) is replaced by the following:

Exception to subparagraph (1)(d)(ii) or (d.1)(ii)

(1.1) The document is not required to contain the information referred to in subparagraph (1)(d)(ii) or (d.1)(ii), as the case may be, in respect of an ingredient if

(4) The portion of subsection 225(1.2) of the Regulations before paragraph (a) is replaced by the following:

Exception to subparagraph (1)(e)(i) or (e.1)(i)

(1.2) The document is not required to contain the information referred to in subparagraph (1)(e)(i) or (e.1)(i), as the case may be, in respect of an ingredient if

(5) Paragraph 225(1.2)(b) of the Regulations is replaced by the following:

(6) Section 225 of the Regulations is amended by adding the following after subsection (3):

Exception

(4) Despite subsection (3), in the case of cannabis that was distributed to human participants in the conduct of non-therapeutic research on cannabis, the holder of the licence for research that distributed the cannabis must retain the documents for at least two years after the day on which the research ends.

20 Paragraph 226(1)(f) of the Regulations is replaced by the following:

21 Subsection 229(3) of the Regulations is replaced by the following:

Retention period

(3) The document referred to in subsection (1) and the statement referred to in subsection (2) must be retained for at least two years after the day on which the cannabis is destroyed, except if they relate to cannabis destroyed under section 28.5, in which case they must be retained for at least two years after the day on which the non-therapeutic research on cannabis ends.

22 (1) Section 231 of the Regulations is amended by adding the following after subsection (1):

Non-therapeutic research on cannabis

(1.1) The holder of a licence for research must also retain a document demonstrating that each lot or batch of cannabis that the holder produced or received from another holder of a licence for research and that has been distributed to human participants in the conduct of non-therapeutic research on cannabis, and anything that was used as an ingredient, was produced, packaged, labelled, distributed, stored, sampled or tested in accordance with sections 28.1 and 28.2 and the provisions of Parts 5 and 6, if applicable.

(2) Subsection 231(2) of the Regulations is amended by striking out “and” at the end of paragraph (d), by adding “and” at the end of paragraph (e) and by adding the following after paragraph (e):

23 Subsection 237(2) of the Regulations is replaced by the following:

Non-therapeutic research on cannabis

(1.1) A holder of a licence for research must also retain, in relation to any non-therapeutic research on cannabis that the holder conducts, the following documents:

Retention period — general rule

(2) A document referred to in subsection (1) that does not relate to non-therapeutic research on cannabis must be retained for at least two years after the day on which it is prepared.

Retention period — non-therapeutic research on cannabis

(3) Despite any other provision of these Regulations that specifies a retention period and except in the case of reports and records referred to in section 248.2, every document that the holder of a licence for research must retain under these Regulations in relation to non-therapeutic research on cannabis that the holder conducts or in relation to cannabis that is distributed in the conduct of such research must be retained for at least two years after the day on which the non-therapeutic research on cannabis ends.

24 Section 248 of the Regulations is replaced by the following:

Definitions of adverse reaction and serious adverse reaction

248 The following definitions apply in this section and sections 248.1 and 248.2.

adverse reaction
means a noxious and unintended response to cannabis or a cannabis accessory that contains cannabis. (réaction indésirable)
serious adverse reaction
means an adverse reaction that requires inpatient hospitalization or a prolongation of existing hospitalization, causes congenital malformation, results in persistent or significant disability or incapacity, is life-threatening or results in death. (réaction indésirable grave)

Cannabis products

248.1 (1) A holder of a licence that sells or distributes a cannabis product must

Retention period

(2) The holder must retain the reports for at least 25 years after the day on which they are prepared.

Non-application

(3) This section does not apply in respect of an adverse reaction to cannabis, or a cannabis accessory that contains cannabis, that is distributed to human participants in the conduct of non-therapeutic research on cannabis.

Non-therapeutic research on cannabis

248.2 (1) During the conduct of non-therapeutic research on cannabis, the holder of a licence for research that distributes cannabis, or a cannabis accessory that contains cannabis, to human participants must,

Serious adverse reaction not life threatening

(2) The holder of the licence must, within 15 days after becoming aware of a serious adverse reaction to the cannabis or cannabis accessory that is not life-threatening and does not result in death, provide the Minister with a detailed report containing all information in their possession that is associated with the use of the cannabis or cannabis accessory by the individual who experienced the serious adverse reaction, including the intended use of the cannabis or cannabis accessory, an assessment of the cause of the serious adverse reaction and a statement of what further action, if any, needs to be taken by the holder of the licence.

Record keeping

(3) The holder must retain a record of each adverse reaction and serious adverse reaction that occurs during the holder’s conduct of non-therapeutic research on cannabis and that the holder becomes aware of.

Retention period

(4) The holder must retain the reports and record for at least 15 years after the day on which they are prepared.

Food and Drugs Act

Cannabis Exemption (Food and Drugs Act) Regulations

25 The Cannabis Exemption (Food and Drugs Act) Regulations footnote 2 are amended by adding the following after section 2:

Non-therapeutic research on cannabis

3 Despite paragraph 1(f), cannabis is exempt from the application of the Food and Drugs Act if it is sold to be used for the purpose of non-therapeutic research on cannabis, as defined in subsection 1(2) of the Cannabis Regulations, that is conducted in accordance with those Regulations.

Transitional Provisions

Words and expressions

26 Words and expressions used in sections 27 and 28 have the same meaning as in the Cannabis Regulations.

Exemption — sale of cannabis beverage

27 (1) The holder of a licence for processing that is authorized to sell cannabis is exempt from the application of section 25 of the Act in respect of the sale of a cannabis beverage that is a cannabis product if

Exemption — distribution of cannabis beverage

(2) The holder of a licence for processing that is authorized to distribute cannabis is exempt from the application of subsection 106(1) of the Cannabis Regulations in respect of the distribution of a cannabis beverage that is a cannabis product if

Cessation of effect

(3) Subsections (1) and (2) cease to have effect on the day that, in the 12th month after the month in which these Regulations come into force, has the same calendar number as the day on which they come into force or, if that 12th month has no day with that number, the last day of that 12th month.

Prohibition — research with human participants

28 (1) The holder of a licence for research that is valid immediately before the day on which these Regulations come into force must not, despite subsection 28(4) of the Cannabis Regulations and any term or condition of their licence, conduct research with human participants after the second anniversary of the day on which these Regulations come into force unless, on or after the day on which these Regulations come into force, the licence holder is authorized to do so in one of the following circumstances:

Definition of research with human participants

(2) For the purposes of subsection (1), research with human participants means research that involves the distribution of cannabis to human participants and that is not a clinical trial as defined in section C.05.001 of the Food and Drug Regulations for which the sale of cannabis is authorized in accordance with section C.05.006 of those Regulations.

Coming into Force

29 These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations or the Order.)

Executive summary

Issues: The clinical trial framework under the Food and Drug Regulations regulates a variety of research, including most research on cannabis with human participants for non-therapeutic purposes. This includes studies to determine the psychological and physiological effects of cannabis. Researchers interested in carrying out such studies must receive authorization under the Cannabis Regulations and a No Objection Letter from Health Canada under the clinical trial framework of the Food and Drug Regulations. However, many researchers face difficulties in meeting the requirements of the clinical trial framework under the Food and Drug Regulations. These challenges have led to missed opportunities to advance knowledge about the use and effects of legal, regulated cannabis products available to adult consumers under the Cannabis Act. In turn, this knowledge gap limits Canadians’ ability to make informed decisions about their consumption of cannabis products and its associated risks.

Health Canada has also identified challenges to cannabis testing. In particular, only a subset of licence holders under the Cannabis Regulations are permitted to produce reference standards and manufacture or assemble test kits that are used to assess test methods and to test cannabis, which limits the availability of these critical products. Easy access to these products by the legal, regulated industry contributes to maintaining a quality-controlled supply of cannabis products. In addition, the educational requirements for the head of laboratory position, which is required for an analytical testing licence, are more stringent than for a similar role under the Cannabis Regulations, namely the qualified person in charge that supervises activities with respect to cannabis under a cannabis drug licence. Health Canada considers that candidates with different education levels, along with the required skills and knowledge, could fulfill the duties of the position.

Finally, Health Canada has identified an unintended consequence of the dried cannabis equivalency set for non-solids containing cannabis. The current equivalency, which is used to determine the public possession limit for non-dried forms of cannabis, has resulted in a possession limit that is more restrictive towards cannabis beverages relative to other forms of cannabis.

Description: The amendments define “non-therapeutic research on cannabis” and exempt such research from the clinical trial requirements under the Food and Drug Regulations, resulting in such research being conducted solely with a research licence issued under the Cannabis Regulations. The amendments also include appropriate health and safety requirements to protect the participants. In addition, they allow analytical testing licence holders and government laboratories to produce, distribute, and sell reference standards and manufacture and assemble test kits, thereby increasing access to cannabis testing materials. They also broaden the educational qualifications for the head of laboratory position, expanding the pool of eligible candidates to occupy this role. Finally, they increase the dried cannabis equivalency for cannabis beverages so that 1 g of dried cannabis is equal to 570 g of cannabis beverages. This, in turn, increases the public possession limit for cannabis beverages for an adult for non-medical purposes from 2 100 g (approximately 2.1 L) to 17 100 g (approximately 17.1 L). Existing controls in the Cannabis Regulations that address the risks of overconsumption and accidental consumption remain in place.

Rationale: The purpose of the Cannabis Act is to protect public health and public safety and, in particular, to enhance public awareness of the health risks associated with cannabis use, provide access to a quality-controlled supply of cannabis, and provide for the licit production of cannabis to reduce illicit activities in relation to cannabis, among other things. The amendments further support these objectives by facilitating non-therapeutic research on cannabis to increase the knowledge of cannabis and the potential risks of using cannabis products. The amendments also support providing access to a quality-controlled supply of cannabis by addressing the limited availability of cannabis testing materials and facilitating cannabis testing. Finally, amending the dried cannabis equivalency and therefore increasing the public possession limit for cannabis beverages addresses an unintended consequence of the current equivalency, which restricts the possession of cannabis beverages relative to other forms of cannabis (e.g. dried cannabis, cannabis extracts).

The amendments reduce the regulatory burden on stakeholders. However, due to costs resulting from the amendments pertaining to cannabis beverages as well as the need for existing research licence holders conducting “research with human participants” (as defined in the amendments) to obtain a new research licence or amend the terms and conditions on their existing research licence to authorize activities in relation to non-therapeutic research on cannabis by the second anniversary of the day on which the amendments come into force, the cannabis industry and existing research licence holders will incur some costs. The total net present value (PV) costs are $4,363,350 over 10 years. Under the small business lens, the amendments result in a net reduction in costs to small businesses and introduce efficiencies. Applying the one-for-one rule results in a net OUT of $1,326 ($2012) because analytical testing licence holders are no longer required to obtain a processing licence in order to manufacture and assemble cannabis test kits, and to produce, distribute and sell cannabis reference standards.

Issues

The Regulations Amending Certain Regulations Concerning Cannabis Research and Testing and Cannabis Beverages and the Order Amending Schedule 3 to the Cannabis Act (the amendments) will address four issues.

Non-therapeutic research on cannabis

Research on cannabis with human participants for non-therapeutic purposes is a diverse area of scientific investigation. It can include, for example, studies that examine the onset and duration of the effects of a cannabis product, studies that inform product development, and studies related to public health. In contrast, research on cannabis with human participants for therapeutic purposes focuses on research relating to the diagnosis, treatment, mitigation, or prevention of a disease or its symptoms, or on the restoration or correction of organic functions including for the purpose of developing drugs (in this case, drugs containing cannabis). Most therapeutic research on cannabis with human participants, and, currently, most research on cannabis with human participants for non-therapeutic purposes meets the definition of a “clinical trial” under the Food and Drug Regulations (FDR). Researchers interested in carrying out the majority of this type of research must secure authorization under the Cannabis Regulations (the Regulations) and receive a No Objection Letter (NOL) from Health Canada under the clinical trial framework under the FDR.footnote 3

Many researchers have had difficulty securing a NOL for research on cannabis with human participants for non-therapeutic purposes. For example, they face challenges in conducting research with cannabis products available in Canada’s legal, regulated market, since these products are manufactured to meet the regulatory requirements for quality control set out in the Regulations — Good Production Practices (GPP) — rather than the quality control requirements specified in the FDR — Good Manufacturing Practices (GMP).

Cannabis-related research could provide Canadians with more information on the risks and effects of cannabis, such as those associated with a certain quantity or use, thereby allowing them to make informed decisions about their consumption. The barriers to research using commercially available cannabis products may have the potential to affect the climate for cannabis research in Canada. These barriers may result in researchers not being able to use grants received for cannabis research, and in funding bodies deciding not to offer grants for cannabis research, which could create a risk of researchers choosing to pursue their work outside of Canada. Health Canada recognizes the need to fill the knowledge gaps for cannabis and the need to continue to support Canadians in making informed decisions.

Reference standards and test kits

Reference standards are used to calibrate analytical instruments and assess testing methods. Currently, only licensed processors are able to sell reference standards, which potentially limits their availability and variety. However, many analytical testing licence holders and government laboratories have the equipment and expertise to produce high-quality reference standards.

Cannabis test kits are used to test for the presence or quantity of cannabis (e.g. in a drug-testing device). The Regulations authorize the sale and distribution of registered test kits by any person; however, similar to cannabis reference standards, only licensed processors are able to manufacture or assemble them. Allowing analytical testing licence holders, as well as government laboratories, to carry out a broader range of activities with reference standards and test kits would improve the availability and variety of these products, and strengthen Canada’s cannabis testing system.

In addition, the current regulatory requirements for reference standards do not align with their risk profile and purpose. Reference standards are currently subject to certain requirements. These include GPP requirements under Part 5 of the Regulations, which are designed to ensure quality-controlled cannabis products intended for human consumption, as well as a prohibition under the Cannabis Act (the Act) on the sale of cannabis that has certain sensory attributes (i.e. cannabis that has an appearance, shape or function that there are reasonable grounds to believe could be appealing to young persons). These requirements are not necessary for reference standards, as they are not intended to be sold to consumers at the retail level and are not intended for consumption. Accordingly, the requirement to have a Quality Assurance Person (QAP) to ensure that GPP requirements are met is not necessary. Compliance costs to meet GPP requirements represent a significant expense for licence holders. Further, to support a broad range of cannabis products, reference standards with certain sensory attributes or contaminants may be necessary for testing purposes.

Head of laboratory

Under the Regulations, a holder of an analytical testing licence must employ a person to act as the “head of laboratory.” This person is responsible for all cannabis testing activities that take place at the analytical testing laboratory site. Among other qualifications, heads of laboratory must have a university degree in a relevant science field from a Canadian university or, if awarded by a foreign university, that is recognized by a Canadian university or professional association. These requirements are more stringent than those used for the qualified person in charge under the Regulations, which is comparable in roles and responsibilities to the head of laboratory, and may limit the pool of eligible head of laboratory candidates. Candidates with different education levels and qualifications and with the necessary skills and experience could fulfill the duties of the position.

Cannabis beverages

The Act sets a public possession limit for adults of 30 g of dried cannabis or its “equivalent” for other forms of cannabis for non-medical purposes. The public possession limit facilitates the investigation and enforcement of the illegal distribution and sale of cannabis. Schedule 3 to the Act sets the amounts of various classes of cannabis that are considered equivalent to 1 g of dried cannabis. “Cannabis beverages,” as defined in the amendments (i.e. edible cannabis that is meant to be consumed by drinking, and that has a concentration of 3% weight per weight [w/w] or less of tetrahydrocannabinol [THC]), are currently part of the “non-solids containing cannabis” class, where the equivalent amount to 1 g of dried cannabis is 70 g. This means that an adult is able to possess, in public, a maximum of 2 100 g (or approximately 2.1 L) of cannabis beverages for non-medical purposes. Effectively, this also means that consumers can only purchase this amount of cannabis beverages at a legal retail outlet (which is a public place), otherwise they would exceed their public possession limit. Therefore, some provinces and territories have enacted corresponding sales limits to prevent this from occurring.

Stakeholder feedback and analysis conducted by Health Canada revealed that the dried cannabis equivalency set out in Schedule 3 (the equivalency) unintentionally restricts the possession and sale of cannabis beverages for adults, particularly those in standard-sized containers (e.g. 355 mL cans), more so than other forms of cannabis. Due to the equivalency factor set for the non-solids containing cannabis class and the relatively high weight of cannabis beverages compared to other forms of cannabis in that class, adults are limited to possessing five standard sized beverages (i.e. 5 × 355 mL cans) in public for non-medical purposes. Stakeholders have noted that the equivalency also creates a disincentive for adults to purchase beverages in the legal market, since they can purchase more of other products (e.g. 60 × 0.5 g pre-rolls of dried cannabis or 45 × 10 g cannabis chocolate bars). The equivalency and corresponding public possession limit for adults for non-medical purposes applicable to cannabis beverages were not intended to create a disincentive to the purchase of beverages compared to other products.

Background

The Act and the Regulations create a strict legal framework for the production, distribution, sale, import, export and possession of cannabis in Canada. The purpose of the Act is to protect public health and public safety and, in particular, to enhance public awareness of the health risks associated with cannabis use, provide access to a quality-controlled supply of cannabis, and provide for the licit production of cannabis to reduce illicit activities in relation to cannabis, among other things. In addition, the Act sets out a public possession limit for dried cannabis and an “equivalent amount” for other types of cannabis, including cannabis beverages, which helps to deter illegal activity in relation to cannabis through appropriate sanctions and enforcement measures.

In support of these objectives, the Regulations set out several licence classes that authorize various activities involving cannabis, including activities for the purposes of research and testing. The research licence class authorizes licence holders to perform certain activities with cannabis for the purpose of research. For example, the types of research that may be conducted with a research licence include in vitro studies (i.e. studies done in a test tube), in vivo animal studies (i.e. studies using a living organism), and clinical trials, among others. The analytical testing licence class enables activities involving cannabis for the purpose of testing. Analytical testing activities can involve testing for chemical contaminants, such as pesticides, microbial contaminants, cannabinoid content, dissolution or disintegration, sterility and stability. The Regulations also authorize employees of government laboratories, who are involved in the testing of cannabis, to carry out activities necessary to conduct such testing. Other licence classes may also allow holders to conduct in-house testing activities if authorized under their licence, subject to certain conditions.

Health Canada has identified opportunities to facilitate further non-therapeutic research involving humans and testing activities with cannabis, and an opportunity to adjust the equivalency and public possession limit for cannabis beverages so that they are more in line with other classes of cannabis.

Non-therapeutic research on cannabis

Many researchers are interested in conducting research on cannabis involving human participants for non-therapeutic purposes. This research broadly includes investigations in respect of cannabis for the purposes of increasing the knowledge on cannabis and its psychological and physiological effects; generating knowledge to inform public health and public safety measures, public education, and policy; and/or furthering research and development of cannabis products. Such research supports the objectives of the Act, which include enhancing public awareness of the health risks associated with using cannabis.

Specific forms of research on cannabis with human participants for non-therapeutic purposes that do not meet the definition of a clinical trial may be carried out solely with an authorization under the Regulations (i.e. a research licence). For example, this includes certain organoleptic research and research involving cannabis testing devices. Organoleptic research involves assessing the taste, touch, sight and smell of cannabis products with human participants in a controlled setting. Holders of a cannabis research licence who are authorized to conduct activities related to organoleptic research may be subject to additional terms and conditions on their licence, including submission of attestations. Research licence holders who are authorized to conduct activities related to cannabis device testing, which involves the verification, validation, or standardization of a device detecting cannabis, may also be subject to additional terms and conditions on their licence.

It should be noted that observational studies with cannabis may not require authorization under the Regulations, unless the study involves other activities regulated by the Act. Observational studies are studies where researchers simply observe an activity or event (e.g. observing the effects of cannabis among a group of individuals who purchased and consumed the cannabis themselves) without trying to change who is or is not exposed to the activity or event. Thus, observational studies do not involve the distribution of cannabis from a researcher to a participant.

While certain organoleptic research and research involving cannabis testing devices (such as the aforementioned studies) may be authorized under the Regulations without requiring additional authorization under the Food and Drugs Act (FDA) and its Regulations, most research on cannabis with human participants for non-therapeutic purposes met the definition of a clinical trial under the FDR. Research with cannabis sold to be used for the purpose of a clinical trial must receive authorization under the Regulations and a NOL, because the cannabis used for such a purpose is not exempted from the FDA under the Cannabis Exemption (Food and Drugs Act) Regulations.

Researchers interested in conducting this type of research face difficulties in securing a NOL. Many of these challenges stem from the requirement that drugs (including cannabis) used in a clinical trial be produced in accordance with the quality standards set out in the FDR, namely GMP. Additionally, the clinical trial framework requires product-specific pre-clinical and non-clinical data. Given the nature of the framework for cannabis, and since cannabis products are not required to have this type of data prior to sale on the retail market, this data is often unavailable.

Under the legal framework for cannabis, cannabis products must comply with the GPP quality standards set out in the Regulations, rather than the GMP requirements specified in the FDR. GPP and GMP serve similar purposes. They set out strict controls relating to sanitation, testing and quality assurance, among other activities. However, GPP requirements are unique to Canada’s cannabis framework and address the specific risks associated with cannabis and cannabis products. This difference, as well as other requirements of the clinical trial framework, creates challenges for researchers to obtain a NOL to carry out studies using the quality-controlled cannabis that is readily available on the legal, regulated market.

Reference standards and test kits

Reference standards play a vital role in assisting laboratories in accurately testing different characteristics of cannabis and validating the accuracy of their testing methods, which contribute to maintaining a quality-controlled supply of cannabis products. As defined in the Regulations, test kits contain cannabis; are designed to be used during the course of a chemical or analytical procedure to test for the presence or quantity of cannabis for a medical, laboratory, industrial, educational, law administration or enforcement, or research purpose; and are neither intended nor likely to be consumed or administered. Since both generally contain only small amounts of cannabis and are not intended for consumption or administration, they pose comparatively little risk of diversion or accidental consumption.

Many analytical testers and government laboratories have the equipment, capacity and expertise to produce, distribute and sell reference standards and manufacture and assemble test kits, but cannot do so without becoming licensed processors or without holding an exemption under the Act. Either pathway imposes a burden that is not commensurate with reference standards’ or test kits’ risk level. Note that once a test kit is registered, any individual can distribute or sell it, thus, authorization under the Regulations is required only for the manufacture and assembly of test kits.

Furthermore, Health Canada has determined that the GPP requirements governing cannabis products intended for retail sale, as well as a provision under the Act that prohibits the sale of cannabis that has a sensory attribute that there are reasonable grounds to believe could be appealing to young persons (e.g. candy flavouring), may not be appropriate for reference standards. For example, some reference standards are intended to contain certain flavours, contaminants, and/or pesticides so that they can be used to detect or quantify the presence of these materials in test samples. Additionally, reference standards require the oversight of the licence holder’s QAP, as currently only licensed processors are allowed to produce reference standards. On the other hand, test kits are already exempted from GPP requirements and from the prohibition under the Act on the sale of cannabis that has a sensory attribute that there are reasonable grounds to believe could be appealing to young persons.

Head of laboratory

The Regulations stipulate that the person in the head of laboratory position must have the necessary knowledge and experience, as well as a university degree in a science field related to the work. The degree must be from a Canadian university or, if awarded by a foreign university, be recognized by a Canadian university or professional association. These requirements were established to help ensure that heads of laboratory were sufficiently qualified to carry out the responsibilities of the position; namely, to be responsible for the required testing on cannabis — testing for phytocannabinoids, testing for contaminants, and dissolution and disintegration testing.footnote 4 However, Health Canada has heard concerns that the current provision may, as a result of its restrictions, be excluding candidates that would be able to fulfill the duties of the position, but do not have the required education.

The Regulations set out qualification requirements for a position with a similar role in the cannabis framework, namely the qualified person in charge (QPIC). The QPIC is responsible for supervising the activities with respect to cannabis that are authorized under the cannabis drug licence and for ensuring their compliance. A QPIC must have a diploma, certificate, or credential from a post-secondary educational institution in Canada in a field or occupation that is relevant to their duties, or the equivalent from a foreign educational institution. On the other hand, the head of laboratory requires a degree in a science field awarded by a Canadian university, or by a foreign university that is recognized by a Canadian university or professional association. It is not Health Canada’s intent for head of laboratory candidates to have less flexibility for post-secondary education requirements.

In addition, the Regulations place additional burden on candidates for the head of laboratory role who have foreign qualifications. For the QPIC position, Health Canada accepts equivalency assessments issued by organizations or institutions designated by Immigration, Refugees, and Citizenship Canada (IRCC), among others. However, only foreign credentials recognized by a Canadian professional association, or by a Canadian university, are acceptable equivalency assessments for the head of laboratory position. Only one university, the University of Toronto, has a foreign credential assessment service that is recognized by IRCC. Many candidates whose foreign credentials have been assessed as equivalent by an IRCC-designated organization or institution would need to obtain another assessment, causing undue burden. It is not Health Canada’s intent that head of laboratory candidates would have less flexibility for foreign equivalency assessments. Broader equivalency assessments would still be appropriate given the duties of the head of laboratory.

Cannabis beverages

The Act sets a public possession limit and distribution limit for cannabis, which helps to deter illegal activity in relation to cannabis through appropriate sanctions and enforcement measures.

Under the Act, adults are prohibited from possessing in public or distributing to another adult more than 30 g of dried cannabis or its “equivalent” in other forms of cannabis for non-medical purposes. The limit was implemented based on recommendations made in 2016 by the Task Force on Cannabis Legalization and Regulation (the Task Force). The Task Force heard from stakeholders in the law enforcement community who supported setting public possession limits, advising that in the event that cannabis became legal for adults to possess, a public possession limit would help facilitate the investigation and enforcement of the illegal distribution and sale of cannabis. Given the intent of this provision, the limit for adults only applies to how much cannabis they can possess in public. The Task Force also found that many other jurisdictions that had legalized cannabis for non-medical purposes had also established a public possession limit. The Task Force concluded that instituting a limit in Canada would be a reasonable measure to assist law enforcement.

Given the diversity of cannabis products produced and sold (e.g. creams, vape pens, capsules, beverages), the Task Force also recommended that Health Canada outline what 30 g of dried cannabis would be equivalent to in other forms of cannabis for law enforcement purposes. Schedule 3 to the Act outlines the amount of cannabis, by class, that is deemed, for the purposes of the Act, to be equivalent to 1 g of dried cannabis. Equivalent amounts have been set for six different broad classes, covering all types of cannabis. Health Canada’s approach to developing the equivalency amounts set in the Act aligns with the approach taken in other United States jurisdictions that had legalized cannabis for non-medical purposes at that time, such as Washington State and Oregon.

The Act sets 1 g of dried cannabis as equivalent to 70 g of “non-solids containing cannabis.” This allows an adult to possess 2 100 g of non-solids containing cannabis in public for non-medical purposes, which is roughly equal to 2 100 mL of liquid (given the density of water is roughly 1 g/mL). The non-solids containing cannabis class is defined in the Regulations as substances that are in non-solid form at a temperature of 22 ± 2°C and that have a concentration of 3% w/w or less of THC, taking into account the potential to convert tetrahydrocannabinolic acid (THCA) into THC. This class therefore contains a wide range of cannabis, such as cannabis beverages (e.g. sparkling waters, lemonades), lower-THC cannabis oils, and some cannabis topicals, such as creams. It should be noted that the Act outlines a separate class, “cannabis concentrates,” that contains all cannabis with a concentration of more than 3% w/w of THC. This class is subject to a lower equivalency, and therefore a lower possession limit, and will not be changed as part of the amendments.

Cannabis beverages available in the legal market are sold in many different product sizes. Based on sales data from 355 provincially/territorially authorized cannabis retail stores from March 2020 to December 2020, the most popular format is 355 mL containers, which is the standard size for many other beverages. In order for an adult consumer to respect the public possession limit, they are effectively limited to purchasing five standard sized beverages (i.e. 5 × 355 mL cans) for non-medical purposes, given that, as noted above, a retail outlet is considered a public space.

Health Canada is aware that some provinces and territories have created an equivalent sales limit in their respective legal frameworks. This is done so as not to put consumers at risk of breaking the law (i.e. not abiding by the public possession limit) as they leave an authorized retail store. Therefore, the public possession limit can limit how much a consumer can purchase per transaction.

While the public possession limit applies to and therefore affects the purchase of all cannabis products, data on consumer spending habits and retail prices of cannabis beverages illustrates that cannabis beverages face greater restrictions. According to data from the 2020 Canadian Cannabis Survey (CCS), consumers report spending on average $67 on cannabis for non-medical purposes per month, and report typically making purchases once per month.footnote 5 This average spending is comparable to the average transactional values reported by provincial wholesalers in Ontario, British Columbia, Quebec and Nova Scotia in fiscal year 2019–2020, where consumer spending per transaction ranged from $35 to $87 and averaged $56. However, for cannabis beverages, consumers could only purchase five 355 mL cans per transaction for non-medical purposes, which have an average market value of $30, a value that is well below average consumer spending habits. For all other cannabis products, a consumer could spend that average amount without exceeding the maximum quantity of cannabis defined by the public possession limit.

In addition to the restrictions on purchase, the current equivalency has the effect, in practice, of imposing stricter restrictions on total THC for cannabis beverages. Given that edible cannabis, such as beverages, has a limit of 10 mg of THC per immediate container, the maximum amount of THC an adult could possess in public for non-medical purposes in this form is 50 mg (5 cans × 10 mg of THC). Other forms of cannabis that are also subject to the 10 mg THC cap, such as solid edible cannabis products (e.g. gummies and chocolate bars), are not affected in the same manner since their dried cannabis equivalency allows for the possession of a greater number of these products. For example, an adult could possess or distribute 45 × 10 g chocolate bars containing a total of 450 mg of THC.

Objective

The amendments support the purposes of the Act by fostering a stronger research climate, facilitating cannabis testing, and addressing unintended restrictions on the legal purchase of cannabis beverages compared to other products that were a result of the dried cannabis equivalency.

The creation of a new pathway for “non-therapeutic research on cannabis,” as defined in the amendments, addresses challenges faced in the conduct of certain research on cannabis with human participants for non-therapeutic purposes and helps create a more robust research climate that will contribute to addressing knowledge gaps and increasing the understanding of cannabis. In order to protect the health and safety of participants, Health Canada will assess applications for research licences proposing to conduct non-therapeutic research on cannabis in accordance with the Act and the Regulations. Where appropriate, terms and conditions can be applied to research licences.

Reference standards and cannabis test kits contribute to maintaining a quality-controlled supply of cannabis products. Allowing a broader range of licence holders to produce and sell reference standards and manufacture and assemble test kits will make them more widely available, and will help enable cannabis testing activities. In addition, broadening the educational requirements for the head of laboratory position will allow for a larger pool of qualified candidates to occupy this role, while still ensuring that those individuals are able to fulfill the duties of the position.

Finally, the amendments to Schedule 3 to the Act change the equivalency of cannabis beverages to dried cannabis, therefore increasing the amount of cannabis beverages that may be possessed in public by an adult. This corrects an unintended consequence of the current equivalency, which restricted the possession and sale of beverages to a greater extent than other forms of cannabis. The increase to the limit on cannabis beverages makes it more in line with the limits that exist for other forms of cannabis.

Description

Non-therapeutic research on cannabis

The Cannabis Exemption (Food and Drugs Act) Regulations are amended to exempt non-therapeutic research on cannabis from the application of the FDA; such research remains solely regulated under the Cannabis Act and its Regulations. As compared to the previous framework, the amendments expand the type of non-therapeutic research with human participants that may be conducted exclusively under the Regulations and not as a clinical trial. The amendments allow a research licence holder under the Regulations to conduct activities in relation to non-therapeutic research on cannabis without the need to receive authorization under the FDR. Note that the amendments do not affect research licences authorizing activities in relation to in vitro and in vivo animal studies with cannabis, which do not require authorization under the FDR, or research that proceeds by way of a clinical trial, which still requires authorization under the FDR and the Cannabis Regulations. The amendments pertain specifically to research licences authorizing activities in relation to non-therapeutic research on cannabis.

The amendments also make a number of changes to the Regulations. In particular, they define non-therapeutic research on cannabis as research involving the distribution of cannabis to human participants by the holder of a licence for research and that is not a clinical trial. As defined under the Act, and for the purposes of non-therapeutic research on cannabis, distributing cannabis includes administering cannabis. In addition, the definition sets out types of research that are not considered as non-therapeutic research on cannabis. For example, the exceptions include research related to the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state or its symptoms or the restoration or correction of organic functions, in human beings or animals. The definition also excludes any research involving the participation of, or related to, young persons. For the purpose of the relevant provisions, “young person” is defined in the Act as an individual who is under 18 years of age.

In addition, the amendments modify the definition of a drug under the Regulations to add an exclusion with respect to cannabis manufactured or sold for use in non-therapeutic research on cannabis. The effect of this amendment is to exclude “drugs” as defined in the Regulations from being used in non-therapeutic research on cannabis.

Further, the amendments set out requirements to protect participants in non-therapeutic research on cannabis, building on existing health and safety protections in the Regulations. First, the amendments require that all cannabis distributed to participants comply with GPP requirements. They require that the cannabis used in the research be quality-controlled. This was already required for organoleptic research, under the terms and conditions of a cannabis research licence authorizing activities related to this research, and is required for all cannabis products sold to consumers, including those individuals accessing cannabis for medical purposes. Second, while these amendments allow non-therapeutic research on cannabis to be conducted with cannabis products as well as cannabis that is not a product (such as cannabis that a licence holder is developing into a cannabis product, regardless if this is eventually successful or not), all cannabis, including cannabis that is not a product, used in the research is required to comply with the requirements in Part 6 of the Regulations that apply to cannabis products in the legal, regulated market. For example, cannabis products must comply with chemical and microbial contaminant limits set out in the Regulations. Lastly, the amendments allow participants in non-therapeutic research on cannabis to return unused cannabis to the research licence holder that distributed the cannabis as part of the research. Research licence holders receiving the unused cannabis are required to destroy the returned cannabis and comply with applicable record-keeping, document retention period and destruction requirements. In addition, given the applicable record-keeping requirements under subsection 226(1) of the Regulations, information pertaining to the lot or batch number of the cannabis was amended to account for situations where this information was not available by adding the term “if applicable.”

The amendments also modify the Regulations such that edible cannabis produced by research licence holders for non-therapeutic research on cannabis may contain vitamin or mineral nutrients that are food additives, provided they meet the applicable requirements for food additives in the Regulations.

The amendments also supplement existing authorities in the Act and the Regulations by adding specific grounds to refuse to issue, renew or amend a licence for research that involves the distribution of cannabis to participants for the purpose of conducting non-therapeutic research on cannabis. This applies if there are reasonable grounds to believe that the use of cannabis in the research would present a risk of injury to the health of a research participant or another person that cannot reasonably be mitigated, or if there are reasonable grounds to believe that the objectives of the research would not be achieved. Similar grounds are also added to the circumstances for suspending or revoking a licence.

The amendments set out adverse reaction reporting requirements for research licence holders conducting non-therapeutic research on cannabis. They require research licence holders to record any adverse reactions, also known as side effects, that occur in the conduct of non-therapeutic research on cannabis. If the adverse reaction is life-threatening or fatal, the licence holder is required to notify Health Canada within 7 days and submit a report within 8 days thereafter. For all other serious adverse reactions, research licence holders are required to submit a report within 15 days. This requirement relies on existing definitions of “adverse reaction” and “serious adverse reaction” in the Regulations, and uses reporting timelines consistent with the clinical trial framework under the FDR. This reporting helps to protect participants by providing information to Health Canada, allowing the Department to identify and respond to emerging health and safety issues with cannabis. The record retention time for adverse reactions occurring under non-therapeutic research on cannabis is 15 years. This aligns with the retention period under the clinical trial framework. Due to the similar rationales for the need of retaining records related to adverse reactions and their uses under the clinical trial framework and non-therapeutic research on cannabis framework (e.g. to protect research participants from undue risk), 15 years was deemed sufficient as the record retention time compared to the original proposed time of 25 years. In addition, this decreases the cost and administrative burden on stakeholders conducting non-therapeutic research on cannabis. Note that the record retention period for adverse reactions associated with a cannabis product remains as at least 25 years after the day on which the reports are prepared. This is similar to the record retention period of marketed drugs under the FDR as the rationales for the need to retain such records are similar.

The amendments also set out record-keeping and retention requirements for non-therapeutic research on cannabis. In particular, they require licence holders to retain documents demonstrating that the cannabis distributed to participants in the conduct of non-therapeutic research on cannabis was produced, packaged, labelled, distributed, stored, sampled and tested in accordance with the applicable provisions of parts 5 (GPP) and 6 (Cannabis Products) of the Regulations. There are also requirements for licence holders to retain documents that list the ingredients of cannabis used in the research. This is similar to the requirements for products sold in the consumer market. Further, research licence holders conducting non-therapeutic research on cannabis need to retain most records related to the research for at least two years after completion of the research.

The amendments set a transition period of two years upon coming into force for existing research licence holders conducting “research with human participants,” as defined in the amendments. Note that the definition of “research with human participants” excludes clinical trials. Following the second anniversary of the day on which these amendments come into force, research licence holders conducting research with human participants will no longer be allowed to distribute cannabis to research participants as per subsection 28(4) of the Regulations or to conduct research with human participants unless they obtain a new research licence, or they amend the terms and conditions under their existing licence, to authorize activities in relation to non-therapeutic research on cannabis. Specifically, for research licences that contain a condition that all research conducted under the licence be reviewed and endorsed using the licence holder’s Research Project Administration Framework, the holder can apply to amend the terms and conditions on their existing licence to authorize non-therapeutic research on cannabis. The holders of a licence with the Research Project Administration Framework condition are typically an institution, such as a university or hospital. A research licence issued to an institution is referred to onwards as an institution-wide research licence. For other existing research licence holders conducting research with human participants, such as those conducting organoleptic research, they are required to obtain a new research licence authorizing activities in relation to non-therapeutic research on cannabis. Research licence holders conducting research under the clinical trial framework are not impacted by this transition period. Note that existing research licence holders conducting research with human participants may continue to conduct their research during the transition period. However, even if they are currently authorized to conduct organoleptic research, they may not conduct research evaluating chemesthetic and/or sensory-emotive responses to cannabis during the transition period unless they obtain a new research licence, or amend the terms and conditions under their existing licence, to authorize activities in relation to non-therapeutic research on cannabis. This is so because while research on chemesthetic and/or sensory-emotive responses to cannabis is non-therapeutic research on cannabis, it extends beyond the authorized activities under their existing research licence that authorizes organoleptic research.

Reference standards and test kits

The amendments make a series of changes to the Regulations to support testing activities with cannabis. They define a “reference standard” to mean a standardized form of cannabis that is intended to be used as a measurement base when testing a substance to confirm its identity, strength, quality or purity for a medical, laboratory, industrial, educational, law administration or enforcement, or research purpose. Reference standards cannot be used in cannabis products or packaged and labelled for sale to a consumer at the retail level. Test kits are already defined in the Regulations and remain unchanged.

The amendments exempt reference standards from certain requirements under the Regulations. They are exempt from GPP requirements, since they are not authorized for sale to consumers, and they are exempt from the requirements relating to QAP that apply to licensed processors. In addition, the amendments exempt reference standards from the provisions of the Act that prohibit the sale of cannabis that has a sensory attribute that there are reasonable grounds to believe it could be appealing to young persons, in order to allow reference standards to contain such cannabis for the purpose of testing. Note that these exemptions already exist for test kits and remain unchanged.

The amendments also authorize individuals working in government laboratories and analytical testing licence holders to produce, distribute, and sell reference standards, as well as to manufacture and assemble test kits. This enables them to conduct a broader range of activities with cannabis for their own testing purposes, and to sell and distribute reference standards to other licence holders or authorized persons for cannabis testing activities. Finally, there are minor amendments to allow research licence holders to sell cannabis plants and cannabis plant seeds to analytical testers and individuals working in government laboratories for research purposes. This enables further testing on cannabis plants and cannabis plant seeds by these parties.

Head of laboratory

The amendments amend the qualifications required for a person to become head of laboratory. They expand the eligible credentials to include a diploma, certificate or credential from a Canadian post-secondary educational institution in a field or occupation relevant to the duties of the head of laboratory position. They also expand the recognition of international credentials for this position. They permit accepting equivalency assessments issued by organizations or institutions designated by IRCC or recognized by a province.

Cannabis beverages

Finally, the amendments also increase the quantity of cannabis beverages equivalent to 1 g of dried cannabis, which have the effect of increasing the public possession limit for adults for cannabis beverages for non-medical purposes from 2 100 g (2.1 L) to 17 100 g (17.1 L) by amending Schedule 3 to the Act. Under subsection 151(2) of the Act, Schedule 3 can be amended by an Order in Council.

The amendments replace the non-solids containing cannabis class by two new classes of cannabis in Schedule 3. The first class encompasses cannabis beverages, including those that are commercially prepared or homemade. Cannabis beverages are defined as edible cannabis that is intended to be consumed by drinking and that has a concentration of 3% w/w or less of THC, taking into account the potential to convert THCA into THC. The second class encompasses non-solids containing cannabis other than cannabis beverages, such as cannabis oils and topicals. It is defined as substances that are in non-solid form at a temperature of 22 ± 2°C and that have a concentration of 3% w/w or less of THC, taking into account the potential to convert THCA into THC. The equivalency for the latter class remains at 70 g, which is the current dried cannabis equivalency set for the non-solids containing cannabis class. This amendment increases solely the equivalency for cannabis beverages to 570 g. As a result, the amount of cannabis beverages that an adult could possess for non-medical purposes in public is equivalent to 48 standard-sized beverage cans. Although there is no federal limit on purchase or sale, it effectively increases the amount of cannabis beverages an adult can purchase without being at risk of exceeding the federal public possession limit. Provinces and territories could choose whether to align their respective public possession or sale limits to this increased limit.footnote 6

Schedule 3 to the Act is also used to set out quantities of cannabis that can be possessed by certain persons covered under the Regulations pertaining to access to cannabis for medical purposes (Part 14 of the Regulations). Therefore, the amendment to Schedule 3 also impacts how many cannabis beverages they can possess in public. For example, a person who is authorized to access cannabis for medical purposes can be authorized to possess up to the equivalent of 150 g of dried cannabis for medical purposes in public, in addition to any other quantity authorized under the Act (i.e. the 30 g that adults may possess). By increasing the dried cannabis equivalency, they will be able to possess an amount of cannabis beverages that is more in line with what they can currently possess of other classes of cannabis, such as dried cannabis.

Although the amendment increases the amount of cannabis beverages an adult could possess in public, this amendment is not expected to have any public health impacts, such as creating inducements to use cannabis. Adult consumers can already possess and purchase much higher quantities of other cannabis products per transaction, such as 60 × 0.5 g pre-rolls of dried cannabis or 45 × 10 g cannabis chocolate bars, yet rarely do. It is also important to note that there are a number of aspects of the regulatory framework that focus on preventing the unique risks associated with the consumption of cannabis beverages, namely overconsumption and accidental consumption, which remain in place. For example, the limit of 10 mg of THC per immediate container and the requirement that containers be child-resistant remain. This amendment is also not expected to have an impact on the risks of illegal access to cannabis beverages by youth, because these amendments pertain to the legal, regulated retail market, which includes numerous controls and safeguards to prevent illegal access to cannabis. Finally, it should be noted that the federal framework does not set limits on how many cannabis beverages an adult can possess at home.

In addition to amending Schedule 3, there is a transitional provision to provide the cannabis industry with sufficient time to update the labels of affected cannabis products. The Regulations require that the label of any container in which edible cannabis products are packaged must include a public possession limit statement outlining the amount of dried cannabis that the product is equivalent to (based on the dried cannabis equivalency amounts in Schedule 3 to the Act). This provides a tool for consumers and law enforcement to determine whether an individual is compliant with the federal public possession limit. With the coming into force of the amendments to Schedule 3, the labels of cannabis beverages need to be updated with a new public possession limit statement. To reduce the impact of these changes on the industry, the amendments allow most licence holders and persons authorized to distribute or sell edible cannabis products (e.g. federally licensed sellers of cannabis for medical purposes, provincially and territorially authorized distributors and retailers) to distribute or sell cannabis beverages that have been packaged and labelled in accordance with the current requirements under the Act and Regulations. However, in the case of holders of a licence for processing, there is a transitional provision allowing them to distribute or sell cannabis beverages that have been packaged and labelled in accordance with the current requirements under the Act and Regulations for a period of 12 months. Following the 12-month transition period, all cannabis beverages distributed and sold by holders of a licence for processing are required to include a public possession limit statement that is reflective of this amendment. Other authorized persons (e.g. federally licensed sellers of cannabis for medical purposes, provincially and territorially authorized distributors and retailers) can continue to sell previously labelled and packaged products (in order to sell or distribute their existing inventory of these products).

This means that consumers may continue to see cannabis beverages with a public possession limit statement based on the current dried cannabis equivalency even though the equivalency will have been amended. While some consumers may have difficulty understanding how many cannabis beverages they can possess in public, it is unlikely that a consumer would be placed in a position of unknowingly possessing more cannabis beverages in public than they are permitted to, because cannabis beverages labelled in accordance with the current requirements will actually be equivalent to a lower amount of dried cannabis. In addition, all other packaging and labelling provisions continue to apply, including requirements to label the net volume of the product, which could be used by consumers to determine how much a product contributes to their public possession limit. Furthermore, through engagement with law enforcement in advance of the coming-into-force date, law enforcement is aware of the increased limit and are not expected to rely solely on the possession limit statement on cannabis beverages to assess compliance.

Health Canada has a proactive communication strategy regarding this change that includes having ongoing engagement with law enforcement and the public to ensure awareness, supporting provinces and territories in updates they choose to make to their respective sale limits and public possession limits, and promoting awareness of Health Canada’s online calculator to support law enforcement’s and consumers’ understanding of how much cannabis can be possessed.

Regulatory development

Consultation

Since the Act and the Regulations first came into force on October 17, 2018, stakeholders have indicated that the framework for cannabis research under Health Canada’s various regimes has resulted in challenges in conducting research on cannabis with human participants for non-therapeutic purposes. Health Canada has met and corresponded with the research community and cannabis industry on these issues since the legalization and regulation of cannabis for non-medical purposes.

Health Canada held several discussions with stakeholders on the issues addressed in this proposal. For example, in March 2020, officials took part in a teleconference with academic researchers to discuss their ongoing difficulties in securing authorization and/or a NOL for research on cannabis with human participants for non-therapeutic purposes.

On December 12, 2020, Health Canada published a Notice of Intent (NOI) in the Canada Gazette, Part I, for stakeholders to comment on the proposal to address cannabis research and testing. Health Canada received 236 submissions from a diverse group of stakeholders, including universities and researchers, cannabis licence holders, cannabis industry associations, public health stakeholders, health care associations, provinces and territories and individual Canadians.

Most respondents were supportive of the proposed amendments to create a framework for non-therapeutic research on cannabis under the Regulations, expand the production, distribution and sale of reference standards and test kits for certain licence holders and government laboratories, expand the qualifications for the head of laboratory, and change the dried cannabis equivalency to therefore increase the public possession limit for cannabis beverages. They indicated that these proposed amendments would help enable research and testing activities and permit the possession and sale of a greater number of cannabis beverages per transaction.

The feedback obtained through these consultations informed the development of the proposed amendments. On March 12, 2022, Health Canada published the proposed Regulations Amending Certain Regulations Concerning Cannabis Research and Testing and Cannabis Beverages and Order Amending Schedule 3 to the Cannabis Act in the Canada Gazette, Part I, launching a 45-day public consultation period to solicit public input and views on these amendments. A total of 83 submissions were received during the public consultation period. A wide variety of stakeholders provided comments, including researchers, public health organizations, provincial stakeholders, members of the general public, cannabis licence holders, and cannabis industry associations. Overall, the majority of the submissions were supportive of the proposed amendments.

Non-therapeutic research on cannabis

Submissions were received regarding the proposed amendments on non-therapeutic research on cannabis, the majority of which were supportive. In line with the proposal, many respondents indicated that the requirements to conduct non-therapeutic research on cannabis should be less stringent than those that apply to the clinical trial framework under the FDR, in order to better facilitate research. Notwithstanding this broad support, some feedback was received on record retention requirements. Two respondents requested that record retention requirements for adverse reactions be reduced to 15 years from the proposed 25 years, in order to align with the clinical trial record retention requirements under the FDR that were finalized in early 2022. This has been reflected in the amendments.

Some feedback was also received from industry stakeholders to revise the Regulations to allow for the publication of information on labels of cannabis products that resulted from evidence generated from non-therapeutic research on cannabis (e.g. time to onset of effects). Health Canada continues to follow the advice of the Task Force, which strongly supported strict labelling requirements to reduce attractiveness and appeal of cannabis products. The regulatory text has not been amended to address inclusion of information generated through non-therapeutic research on cannabis.

Other feedback received included requests to allow research on non-intoxicating cannabinoids, which are captured under the definition of “cannabis” under the Act, to be conducted outside of the Act, and to increase the age limit to over 25 years of age for the purposes of participating in non-therapeutic research on cannabis. Research on non-intoxicating cannabinoids will continue to be regulated under the Act and the Regulations as data is limited on cannabinoids that are considered as non-intoxicating and there are no plans at this time to amend the definition of “cannabis” in the Act and schedules 1 and 2 to the Act. Therefore, non-intoxicating cannabinoids remain subject to regulatory requirements pertaining to cannabis research. Health Canada also maintained the age limit at 18 years of age or older for participation in non-therapeutic research on cannabis to be consistent with the age limits for cannabis possession and distribution under the Act. Changing the age limit to over 25 years would preclude the collection of data on a large portion of the population that can legally purchase and possess cannabis. However, non-therapeutic research on cannabis remains subject to provincial and territorial laws, which may set higher age limits for cannabis possession and distribution than those indicated under the Act. Other minor comments were received and did not result in changes to the amendments.

During the public consultation, stakeholders emphasized the need for guidance pertaining to the application requirements to conduct non-therapeutic research on cannabis. To that end, Health Canada has set out in an administrative guide the application requirements and has accordingly updated the existing administrative guide for research licences, namely, the Cannabis Licensing Application: Research Licence. The updates are designed to better protect the health and safety of research participants and to better support the public health and public safety objectives of the Act.

Reference standards and test kits

Submissions were received regarding reference standards and test kits, the majority of which were supportive. Many respondents indicated that the proposed amendments would make test kits and reference standards easier to obtain. However, some respondents indicated to varying degrees that quality standards should be put into place for either test kits and reference standards, analytical testing methods, or both, in order to ensure they are comparable and consistent across laboratories and to address existing concerns with variability in analytical testing methods within the cannabis industry.

Health Canada continues its existing efforts to assess the issue of quality standards for reference standards and test kits and analytical testing methods. It has determined not to introduce amendments to set new quality standards for reference standards and test kits at this time, as other policy instruments, such as guidance, may be more appropriate.

Head of laboratory

Submissions were received regarding the qualifications for the head of laboratory position, the majority of which were supportive. Respondents were generally supportive of the proposed changes to the evaluation of foreign credentials. However, some respondents were concerned that the expanded qualifications from Canadian institutions may be insufficient, and could result in candidates who may not be able to adequately perform the duties of the position. Suggested changes included adding regulatory requirements for hands-on experience or skills assessments for the head of laboratory position, in order to ensure a candidate’s ability to sufficiently meet the requirements of the position. Of the submissions that were opposed to the proposed amendments, most were opposed to the changes out of concern that these would lead to decreased quality of testing.

Health Canada has determined that the requirements of a similar position, namely, the QPIC required for holders of a cannabis drug licence, are appropriate for the head of laboratory. Further, licence holders maintain the authority to evaluate the skill set of individual candidates who apply for the head of laboratory position, and they may impose criteria beyond those identified in the amendments (e.g. hands-on experience requirements). Further changes have therefore not been made to the amendments pertaining to head of laboratory.

Cannabis beverages

Several submissions were received regarding the proposed amendments to the dried cannabis equivalency for cannabis beverages, the majority of which were supportive. Respondents indicated that the proposed changes would be beneficial for the cannabis industry and consumers alike. Several stakeholders requested that Health Canada implement the beverages amendments as soon as possible in order to mitigate the negative consequences of the unintended restriction on cannabis beverages on both industry and consumers. Health Canada has accordingly prioritized the implementation of these amendments to the extent possible.

Some respondents also requested that the restrictions on the public possession limit for cannabis beverages be further reduced. The purpose of the proposed amendments to cannabis beverages was to address the unintended consequences of the current dried cannabis equivalency, which had resulted in a disproportionate restriction on the public possession limit for cannabis beverages. Health Canada has deemed the new equivalency to be appropriate to address the unintended consequence and, as such, has not pursued further changes.

Some respondents requested allowing multipacks of cannabis beverages to be sold with more than 10 mg of THC in total for the multi-pack (e.g. 6 cans of cannabis beverages each containing 2 mg of THC, a total of 12 mg of THC). Given that consumers can purchase multiple cannabis beverages that are packaged individually, and that the total THC of all the cannabis beverages could be more than 10 mg, no changes were made in relation to multipacks.

On the other hand, some stakeholders suggested that the proposed increase to the dried cannabis equivalency and corresponding changes to the public possession limit for cannabis beverages be made more conservative in order to better support public health objectives. As the suggested change to amend the dried cannabis equivalency to a lesser amount would not address the disproportionate restriction on the possession of cannabis beverages, Health Canada has not made further changes to the dried cannabis equivalency amount for cannabis beverages.

Some respondents also suggested alternatives for determining the public possession limits (e.g. based on standard THC dosing and product size/volume). The suggested changes to revise how the public possession limit is determined is beyond the scope of the amendments.

It is worth noting that while a few respondents opposed the proposed changes to cannabis beverages, most of these respondents advocated for the removal of the public possession limits altogether. Public possession limits were developed in the interests of public safety. The Task Force determined that they are a reasonable precaution to protect against illegal trafficking of cannabis, and serve as a tool to aid law enforcement in addressing illegal activities. Health Canada will therefore continue to implement public possession limits. The Government of Canada continues to provide informational resources and to engage in public education efforts to support the public in understanding the legal cannabis system, how to reduce risks associated with cannabis use, and the potential impacts of cannabis use.

Other changes since prepublication

Through internal and external consultations, Health Canada identified a few issues, which have been addressed accordingly in the amendments.

A barrier was identified preventing the return of unused cannabis to research licence holders by research participants in non-therapeutic research on cannabis at off-site locations from the licensed research site (e.g. research involving participants self-administering cannabis in their homes). Since the Act prohibits an individual from distributing cannabis to an organization and from distributing more than the equivalent of 30 g of dried cannabis, a gap resulted related to the handling of unused cannabis after it has been distributed to research participants. If the research licence holder was an organization (i.e. not an individual), participants would have been unable to return cannabis to the research licence holder that distributed the cannabis as part of the research, if they wanted to, in the event that they withdrew from the research and were unable to destroy the unused cannabis themselves, or in the event that the research licence holder requested the return of the cannabis. This gap has been addressed through the amendments.

The amendments also correct an unintended oversight in the proposed amendments regarding the permitted ingredients in edible cannabis that is produced by research licence holders conducting non-therapeutic research on cannabis. The amendments now reflect that edible cannabis produced by research licence holders for non-therapeutic research on cannabis may contain vitamin or mineral nutrients that are food additives provided that they meet the applicable requirements for food additives in the Regulations, as was intended by Health Canada.

The amendments also permit the sale of reference standards that have a sensory attribute that there are reasonable grounds to believe it could be appealing to young persons. This was identified as a gap in the proposed amendments. Given that one of the objectives of these amendments is to facilitate cannabis research and testing, Health Canada determined it was necessary to allow for the sale of these types of reference standards for testing purposes.

Lastly, Health Canada identified that a transition period was needed for existing research licence holders conducting research with human participants (e.g. organoleptic research). The transition period will sufficiently balance the needs of researchers by allowing them to complete their in-progress research, while providing sufficient time to obtain a new research licence, or to amend the terms and conditions on their existing licence, to authorize activities in relation to non-therapeutic research on cannabis. The absence of a transition period following the coming into force of the amendments would have resulted in research licence holders conducting research with human participants being subject to different frameworks based only on when their licence was issued, even though they would be conducting the same type of research. Without a transition period, existing research licence holders conducting research with human participants could do so until their licences expire, which, in some cases, are as late as 2027.

Modern treaty obligations and Indigenous engagement and consultation

These amendments impact federal cannabis licence holders (e.g. licensed processors, researchers, and analytical testers) and government laboratories. The amendments also impact anyone participating in cannabis-based research and testing activities, and consumers of cannabis beverages, which could affect all Canadians, including Indigenous peoples.

Health Canada has not specifically engaged with Indigenous peoples on the amendments. However, as part of its consultations with Canadians during the Canada Gazette, Part I, consultation period, the Department sought feedback and comments to ensure that the amendments are informed by, and responsive to, the cannabis industry, cannabis researchers and other relevant stakeholders, which include Indigenous-affiliated licence holders. To support engagement, participation and feedback from Indigenous peoples on the proposed amendments, Health Canada also published a notice in the First Nations Gazette and informed Indigenous organizations, associations and representative entities of the public consultation directly through a notification email. A similar approach to engagement will occur for these amendments.

These amendments do not trigger a duty to consult with Indigenous peoples, but engagement and outreach activities will continue to, where possible, further inform the collective understanding of the impact of the Act and the Regulations on Indigenous peoples and their communities’ public health and public health objectives when it comes to addressing the risks and harms associated with cannabis.

These regulatory amendments are not expected to impact on the rights of Indigenous peoples recognized and affirmed under section 25 of the Constitution Act, 1982 and are not expected to impact modern treaties with the Indigenous peoples of Canada.

Instrument choice

Non-therapeutic research on cannabis

Health Canada considered a variety of non-regulatory actions. For example, the Department investigated the possibility of allowing GPP-compliant cannabis to be used in clinical trials if the cannabis met additional requirements (e.g. further testing) similar to those for GMP. Licence holders interested in carrying out such research would have been subject to additional terms and conditions on their cannabis research licence. However, Health Canada determined that this approach risked compromising mutual international GMP recognition agreements and undermined the integrity of the clinical trial framework. As an interim measure, the Department published guidance for stakeholders, which was revised on May 31, 2021, that noted that Health Canada intended to allow some flexibility with respect to the data required for clinical trial applications involving therapeutic or non-therapeutic research on cannabis. Despite this interim measure, Health Canada determined that additional policies to further reduce the regulatory burden for researchers conducting non-therapeutic research on cannabis under the FDR would weaken the integrity of the clinical trial framework, and risk compromising Canada’s standing regarding international agreements and standards on clinical trials. Regulatory amendments, in contrast, would allow researchers to use commercially available cannabis products and support the objectives of the Act. Note that the interim measures with respect to non-therapeutic research on cannabis will cease to apply once the amendments come into force.

Health Canada also considered using terms and conditions on a licence to impose requirements pertaining to non-therapeutic research on cannabis, rather than proposing regulatory amendments. As provided for by the Act, the Minister may make a licence subject to terms and conditions. This approach was used for certain organoleptic research, where terms and conditions governing adverse reaction reporting, quality controls and other elements were applied to the research licence. Health Canada considered the pros and cons of relying on terms and conditions on a licence, taking into account the complexity of the regime, stakeholder feedback, and other considerations. Health Canada determined that the best approach was proposing regulatory amendments and applying additional terms and conditions on a licence as needed, to protect the health and safety of research participants.

Reference standards and test kits

Health Canada considered the option of issuing exemptions under section 140 of the Act, which would allow interested analytical testers and government laboratories to produce, distribute and sell reference standards and manufacture and assemble test kits. However, this option would increase the regulatory burden for licence holders and government laboratories, would lack transparency and would not address the burden caused by requiring reference standards to be compliant with GPP requirements. The amendments are a more comprehensive approach to address the current challenges with reference standards and test kits.

Head of laboratory

As educational qualifications are specified in the Regulations, regulatory amendments are the only appropriate instrument.

Cannabis beverages

An Order in Council is required to amend Schedule 3 to the Act to remove one class of cannabis and create two new classes of cannabis, pursuant to subsection 151(2) of the Act. Therefore an Order in Council is the only appropriate instrument.

Health Canada considered changing the equivalency for the entire non-solids containing cannabis class. However, this would have raised the public possession limit for all other cannabis in this class, including certain liquid cannabis oils and cannabis topicals. Based on the feedback Health Canada received from stakeholders and from additional analysis, it was determined that this issue is specific to the equivalency for cannabis beverages. Health Canada decided to focus the amendments in a manner that would address the unique and unintended restrictions the dried cannabis equivalency currently poses on cannabis beverages.

Regulatory analysis

The costs and benefits of the amendments have been assessed in accordance with the Treasury Board Secretariat Canadian Cost-Benefit Analysis Guide: Regulatory Proposals. The cost-benefit analysis attempts to evaluate and monetize the economic and social impacts of the regulatory changes (the regulatory scenario) relative to a world in which these changes did not occur (the baseline scenario). Monetized values are reported in present values (PV) over 2023–2032, discounted at 7% and expressed in 2021 dollars unless otherwise noted.

Benefits and costs

The amendments are necessary so that the Government of Canada can continue to fully and effectively implement the Act. This includes meeting the objectives of enhancing public awareness of the health risks associated with cannabis use by continuing to enable research on cannabis, as well as providing access to a quality-controlled supply of cannabis by facilitating cannabis testing. Based on stakeholder consultations and Health Canada subject matter experts’ opinions, it is expected that the amendments result in total costs of $4,363,350 (PV) over 10 years for the cannabis industry and the Government of Canada.

The costs calculated here represent an increase in costs from the prepublication of these amendments, which estimated them to be $3,046,514 in 2020 dollars. The increase in costs results from an additional amendment added after prepublication and the change in the number of distinct cannabis beverages on the market. The new transitional provision introduces the requirement for existing research licence holders conducting research with human participants to obtain a research licence, or to amend the terms and conditions of their existing research licence, to authorize activities in relation to non-therapeutic research on cannabis by the second anniversary of the day on which these amendments come into force. This requirement has resulted in an additional cost to the cannabis industry associated with completing research licence applications whether for a new licence or an amendment. This in turn has contributed to the need for an additional full-time equivalent (FTE) to receive and review research licence applications under the new framework, which has increased the costs to the Government of Canada. Finally, the number of distinct cannabis beverages on the market that would be impacted by the amendments has greatly increased, from 46 at the time of prepublication to 166 products as of June 2022. This has led to an increase in costs associated with updating their dried cannabis equivalency on labels and updating their retail point-of-sale systems.

Baseline versus regulatory scenario

The cost-benefit analysis evaluates incremental changes for cannabis researchers, analytical testing licence holders, the cannabis beverage industry, the public and the government. The amendments and their impacts have been examined so that costs and benefits can be compared in both the baseline and regulatory scenarios. Table 1 presents the baseline scenario and the regulatory scenario requirements, as well as incremental changes due to the amendments.

Table 1: Baseline versus regulatory scenario
Amendments  Baseline scenario  Regulatory scenario  Changes due to the amendments 
Non-therapeutic research on cannabis This type of research is regulated under both the FDA and the Act.

This type of research is regulated under the Act.

Existing research licence holders conducting research with human participants will no longer be allowed to do so after the second anniversary of the day on which these amendments come into force, unless they obtain a research licence authorizing, or the terms and conditions on their existing licence are amended to authorize, activities in relation to non-therapeutic research on cannabis.
  • Enables non-therapeutic research on cannabis with GPP-compliant cannabis.
  • Government of Canada requires four full-time employees to review research applications, enforce the Regulations, and ensure compliance.
  • Research licence holders currently conducting research with human participants will need to obtain a new research licence, or amend the terms and conditions on their existing licence, in order to conduct activities in relation to non-therapeutic research on cannabis.
Reference standards and test kits Analytical testing licence holders and government laboratories are required to obtain an exemption under the Act or become a licensed processor to produce, distribute and sell cannabis reference standards and manufacture and assemble test kits.

Amendments allow analytical testing licence holders to produce, distribute and sell cannabis reference standards and manufacture and assemble test kits under their existing authorizations, if authorized under their licence.

Government laboratories will be able to produce, distribute, and sell cannabis reference standards and manufacture and assemble test kits.
  • Avoids transactional fees associated with applying for a processing licence.
  • Avoids costs associated with acquiring GPP compliance.
  • Avoids administrative burden associated with applying for a processing licence, replaced by the less stringent and less expensive process of applying for an amendment to their current analytical testing licence.
  • Enables the sale of cannabis reference standards and test kits among analytical testing licence holders.
  • Helps to enable access to a quality-controlled supply of cannabis products.
Head of laboratory Health Canada recognizes university degrees in a relevant science field. The degree must be from a Canadian university or from a foreign university recognized by a Canadian university or professional association. Health Canada expands the educational credentials, and accepts equivalency assessments issued by organizations or institutions designated by IRCC or recognized by a province.
  • Avoids cost of potential re-assessment of degrees.
  • Provides analytical testing licence holders access to a larger pool of qualified candidates.
Cannabis beverages 1 g of dried cannabis is equivalent to 70 g of non-solids containing cannabis. Therefore, an adult could possess 2 100 g (or approximately 2.1 L) of cannabis beverages for non-medical purposes in public. 1 g of dried cannabis is equivalent to 570 g of cannabis beverages, and 70 g of non-solids containing cannabis other than cannabis beverages. As such, an adult can possess 17 100 g (approximately 17.1 L) of cannabis beverages for non-medical purposes in public, and 2 100 g of non-solids containing cannabis other than cannabis beverages for non-medical purposes.
  • Facilitates sale of cannabis beverages for the legal market.
  • Allows adult consumers to purchase a greater amount of cannabis beverages without being at risk of exceeding the federal public possession limit.
  • Cannabis industry is impacted by paying to update the labelling of the beverages, point of sale systems and e-commerce systems to accommodate the new public possession limit.
  • Government of Canada incurs implementation costs, such as engaging in additional communication and outreach activities.
Costs

Compliance with the requirements results in incremental costs to the cannabis industry totalling $272,420 (PV) over the period of 2023 to 2032. This cost results from the amendments pertaining to cannabis beverages as well as the need for existing research licence holders conducting research with human participants to obtain a research licence, or to amend the terms and conditions on their existing research licence, to authorize activities in relation to non-therapeutic research on cannabis by the second anniversary of the day on which these amendments come into force. In addition, it is expected that the amendments result in total costs of $4,090,931 for the Government of Canada, over the same period. The majority of these costs result from receiving and reviewing research licence applications, enforcing the Regulations and ensuring compliance.

Non-therapeutic research on cannabis

Under the baseline scenario, most non-therapeutic research on cannabis met the definition of a clinical trial and needed to comply with requirements under the FDA as well as the Act. The requirements under the FDA and the FDR (e.g. GMP requirements) posed barriers for the researchers who wanted to use commercially available cannabis products, which comply with the GPP requirements under the Regulations, in their research. Due to the amendments, non-therapeutic research on cannabis is solely regulated under the Act and the Regulations and stakeholders are still required to obtain an authorization under the Act before conducting this type of research. However, they are no longer required to obtain an authorization relating to clinical trials under the FDA and the FDR. In addition, the amendments better reflect the differences between the cannabis used and the risks from non-therapeutic research on cannabis compared to the clinical trial framework under the FDA and its Regulations. For example, unlike the FDA, the amendments do not require product-specific pre-clinical data in every circumstance, or extensive chemistry and manufacturing data. As a result, it is expected that the amendments would reduce the regulatory burden in comparison to the previous framework where such research would require the authorizations under the FDR and the Regulations, and there would not be incremental costs to these stakeholders.

To ensure the safety of participants in these studies, the amendments require researchers to report serious adverse reactions associated with cannabis distributed during the course of the research. Despite these amendments, this will not lead to incremental costs, as the adverse reaction reporting requirements are consistent to those under the FDR (baseline scenario) over the 10-year analytical framework. Consequently, it is not expected that the amendments result in incremental costs to stakeholders.

To further protect public health and public safety, the amendments allow for participants in non-therapeutic research on cannabis to return their unused cannabis to the research licence holder that distributed the cannabis as part of the research. Research licence holders must destroy this cannabis and keep records of the cannabis they obtain from other persons and its destruction for at least two years after the completion of their study. However, this does not result in an incremental cost to stakeholders, as similar record-keeping requirements are already in place; the amendments only expand the authority of allowing certain individuals to distribute cannabis to research licence holders.

Research licence holders who are currently conducting research with human participants will be required to obtain a research licence, or to amend the terms and conditions of their existing research licence, to authorize activities in relation to non-therapeutic research on cannabis by the second anniversary of the day on which these amendments come into force. Assuming that this window will end on January 1, 2025, a total of 88 research licences will be impacted, as these licences would have expired after January 1, 2025, in the baseline scenario. Of these research licences, 80 are held by individuals or certain organizations while 8 of them are institution-wide research licences. It is assumed that existing research licence holders will apply for at least one research licence application for activities in relation to non-therapeutic research on cannabis to continue their ongoing research. Institution-wide research licence holders will, on average, apply for two separate amendments to their research licences to be authorized for activities in relation to non-therapeutic research on cannabis. This gives a total of 96 applications that will need to be completed by the industry. Health Canada expects that existing research licence holders would likely already have most of the information needed for an application under the new framework in order to conduct their current research with human participants. Therefore, Health Canada expects that those who reapply likely have most of the required application information at their disposal. Thus, it is expected that it will take less time for existing licence holders to complete the applications compared to a new applicant. Applications for a research licence to conduct activities in relation to non-therapeutic research on cannabis by new applicants takes, on average, 45 hours to complete, while the application for existing licence holders, whether for a new research licence or amendment to their existing licence, are expected to take 30 hours. These 30 hours will be divided between a Biologist or Related Scientist (75%) with an hourly wage rate of $46.38 (including overhead) and a Senior Researcher (25%) with an hourly wage rate of $65.76 (including overhead). The application processes for existing licence holders is expected to take place in 2024. The resulting costs to industry stakeholders from this amendment are $137,868 (PV), occurring in 2024.

Health Canada incurs incremental costs to receive and review research licence applications, enforce the amended Regulations, and ensure compliance. It is expected that four full-time employees are needed to complete these tasks. The associated costs to the Government are estimated to be $4,089,141 (PV) over the 10-year analytical framework (2023–2032). Health Canada will administer the amended Regulations with existing funds.

Cannabis beverages

The Regulations require the label of any container in which certain cannabis products are packaged, including edible cannabis, to include a public possession limit statement that outlines the amount of dried cannabis that the product is equivalent to (based on the dried cannabis equivalency amounts in Schedule 3 to the Act). As a result of the amendments, licensed processors are required to update labels of cannabis beverages in accordance with the amendments to Schedule 3 to the Act. Based on point-of-sale data collected from 835 provincially and territorially authorized cannabis retail stores across Canada between June 2021 and June 2022, it is estimated that 166 unique cannabis beverages are impacted by the amendments to Schedule 3. Since updating the equivalency on the product label only requires minor changes, it is expected that updating each product label requires two hours of additional work for a food labelling specialist (at $33.25 per hour, including overhead), resulting in a one-time cost in 2023 of approximately $11,039 (PV) over 10 years. In order to reduce the impacts of these amendments on the industry, a 12-month transition period is provided. During this period, licensed processors are permitted to deplete stocks of existing products. Any cannabis beverages packaged and labelled in accordance with the previous provisions in the Regulations, prior to the end of the 12-month transition period, may continue to be sold indefinitely by authorized retailers and licence holders authorized to sell cannabis products. Therefore, assuming that licensed processors sell or distribute their existing stock of cannabis beverages within one year, it is not expected that the amendments would require them to relabel their existing products or replace their existing label stock.

In addition, Health Canada is aware that retailers (online and in store) have systems that enable them to calculate the equivalent amount of cannabis purchased in dried cannabis. These systems help to ensure that consumers do not purchase more cannabis than the public possession limit permits. The equivalencies and limits for affected cannabis products need to be updated in cannabis sales systems according to the amendments to Schedule 3. Both e-commerce (for online sales) and point of sale (for in store sales) are designed to easily incorporate these changes. Based on stakeholder consultation, approximately 46 different companies will need to update the equivalency ratio of the 166 affected cannabis beverages in their systems. Incorporating the changes to the equivalencies and public possession limits into the sale systems would require a maximum of 0.5 hours of additional work per product per system for a sale system analyst (at $32.35 per hour, including overhead), resulting in a one-time cost in 2022 of approximately $123,512 (PV).

Finally, Health Canada incurs some costs in order to communicate with stakeholders about the amendments to Schedule 3 to the Act. Implementation costs include updating relevant Health Canada web pages and social media channels, issuing a letter and guidance documents to licensed sellers of cannabis for medical purposes, licensed processors, and law enforcement authorities and conducting outreach activities with the provinces and territories. It is expected that these activities require 25 hours of additional work for a senior policy analyst in 2023 (at $71.57 per hour, including overhead), resulting in a one-time cost of approximately $1,789 (PV).

Benefits

Since the amendments are expected to be a low cost, the benefits are discussed qualitatively. The amendments are necessary so that the Department can continue to fully and effectively implement the Act. This includes meeting the objectives of enhancing public awareness of the health risks associated with cannabis use by continuing to enable research with cannabis, and providing access to a quality-controlled supply of cannabis by facilitating cannabis testing.

Non-therapeutic research on cannabis

The amendments remove non-therapeutic research on cannabis from the application of the FDA; such research remains regulated under the Act and its Regulations. This helps to create a more robust research climate that would contribute to addressing the current knowledge gaps and increasing the understanding of cannabis. The evidence and data gathered would provide information to help inform consumer decision-making and further increase public awareness of the potential health risks associated with consuming cannabis. In addition, the evidence and data gathered would inform Health Canada, the provinces and territories, and stakeholders in the public health sector in producing better public education materials and enabling better public health decision-making and public health measures. Specifically, these amendments allow researchers to investigate cannabis and its effects from a non-therapeutic perspective and allow more research in the context of cannabis product development. The results from the product development studies would likely feed into licence holders’ business decisions regarding the release of new cannabis products and allow consumers to have better information about the effects of cannabis, thereby better protecting public health and safety. Further, adverse reaction reporting requirements generally similar to those that already applied to sponsors of a clinical trial under the FDR apply to licence holders conducting non-therapeutic research on cannabis, helping to protect participants.

Reference standards and test kits

Without the amendments, analytical testing licence holders and government laboratories would continue to need to apply for an exemption under the Act or apply for a processing licence in order to produce, distribute and sell reference standards and manufacture and assemble test kits. The amendments allow analytical testing licence holders to undertake those activities without going through those processes and instead apply for an amendment on their current licences and allow government laboratories to produce, distribute and sell reference standards and manufacture and assemble test kits as part of their authorized activities. They benefit from avoiding the costs associated with getting a processing licence. For example, they no longer need to pay for the application and additional security clearance fees. Further, they no longer need to meet the associated GPP and QAP requirements for the processing licence.

As of August 2022, there are 149 analytical testing licence holders.footnote 7 It is expected that the demand from the cannabis industry for reference standards and test kits could be met by approximately 13 analytical testing licence holders engaging in the production and sale of reference standards and manufacture and assembly of test kits. These 13 analytical testing licence holders no longer need to spend time obtaining a processing licence to undertake these activities but instead are able to apply for an amendment to produce, distribute and sell reference standards and manufacture and assemble test kits on their existing licence. Hence, they benefit from administrative cost savings, which are discussed in the “one-for-one rule” section below. As a result of more licence holders producing, distributing and selling reference standards and manufacturing and assembling test kits, these materials, which are necessary to conduct cannabis testing and integral to maintaining access to a quality-controlled supply of cannabis, will be more widely available in the market.

Head of laboratory

The amendments to expand the acceptable qualifications for a person to become a head of laboratory benefit analytical testing licence holders by giving them access to a larger pool of qualified candidates. Moreover, candidates whose foreign credentials have already been recognized by a designated organization or institution by IRCC are no longer required to obtain another assessment, which results in cost savings.

Cannabis beverages

Amending the dried cannabis equivalency for cannabis beverages, specifically, amending Schedule 3 to the Act, corrects an unintended consequence of the current dried cannabis equivalency, which restricts public possession and sale of cannabis beverages to a greater extent than other forms of cannabis. Increasing the amount of cannabis beverages that an adult can possess in public benefits adults who consume cannabis beverages as well as businesses that produce cannabis beverages, as there may be an increase in demand.

Cost-benefit statement

The total costs will be $4,363,350 (PV) over 10 years. The benefits associated with these amendments are described qualitatively.

Table 2: Monetized costs (in thousands)
Impacted stakeholder Description of cost Base year (2023) Other relevant years (2024) Final year (2032) Total (present value) Annualized value
Government Four full-time employees to receive and review research licence applications, enforce the amended Regulations, and ensure compliance $544.1 $544.1 $544.1 $4089.1 $582.2
Government Implementation and communication of the updated equivalencies and public possession limits for cannabis beverages $1.8 $0.0 $0.0 $1.8 $0.3
Industry Updating cannabis beverage labelling $11.0 $0.0 $0.0 $11.0 $1.6
Industry Updating the cannabis equivalencies and public possession limits in retail sales systems $123.5 $0.0 $0.0 $123.5 $17.6
Industry Existing research licence holders obtaining a new research licence or amending the terms and conditions to their existing research licence under the new framework for
non-therapeutic research on cannabis by the second anniversary of the day on which the amendments come into force		 $0.0 $147.5 $0.0 $137.9 $19.6
All stakeholders Total costs $680.5 $691.6 $544.1 $4363.4 $621.2
Qualitative benefits

Positive impacts

Small business lens

Analysis under the small business lensfootnote 8 concluded that the amendments impact small businesses. These amendments are expected to have a net reduction in costs to small businesses due to expanding authorized activities under existing analytical testing licences and changes to the requirements for the head of laboratory position. Since the amendments are relieving in nature, no flexible approaches were considered; however, proactive steps will be taken to further reduce the cost imposed on small businesses.

Small businesses benefit from the amendments allowing analytical testing licence holders to produce, distribute and sell reference standards and manufacture and assemble test kits. Of the 149 analytical testing licence holders as of August 2022,footnote 7 78 are considered small businesses. Ten of these small businesses are expected to engage in the production and sale of reference standards and the manufacture and assembly of test kits. These ten small businesses benefit from avoiding the costs associated with getting a processing licence, including the administrative costs discussed in the “one-for-one rule” section. Moreover, other small analytical testing licence holders benefit from these products becoming more widely available for them to purchase.

The amendments to expand the acceptable qualifications for a person to become a head of laboratory benefit small business analytical testing licence holders by enlarging the pool of eligible candidates. Candidates whose foreign credentials that are already recognized by an IRCC designated organization or institution are no longer required to obtain another assessment, which results in cost savings.

The amendments to Schedule 3 to the Act allow adult consumers to purchase more cannabis beverages, thereby benefiting small businesses that produce them. Specifically, these small businesses may benefit from an increase in demand for cannabis beverages. Based on data from Health Canada’s Cannabis Tracking System, a national inventory tracking system administered by Health Canada, 9 of the 18 affected holders of a licence for processing are small businesses. These small businesses produce 34 of the 166 impacted products. However, in some cases, small businesses may have a limited ability to accrue benefits from the amendments. Small businesses operating under a micro-processing licence may only possess up to the equivalent of 600 kg of dried cannabis in a calendar year, with the table setting out this equivalency being found in section 21 of the Regulations. This equivalency is not being changed and remains at 1 g of dried cannabis being equivalent to 10 g of non-solids containing cannabis. As a result, micro-processing licence holders may have a limited ability to expand production of cannabis beverages regardless of the increase in demand. However, micro-processing licence holders may produce specialty cannabis products, and so they may still benefit from an increase in demand if they set a higher price for their products and customers are willing to pay for it.

These amendments also result in some costs to small businesses. Holders of a licence for processing are required to update product labels as a result of the amendments to Schedule 3 to the Act. This means that the aforementioned 9 small businesses will incur costs to update the labels of 34 impacted products. Cannabis retailers have systems that enable them to ensure that consumers do not purchase more cannabis than the public possession limit. While not a regulatory requirement, to continue ensuring that consumers do not purchase more than the public possession limit, the equivalencies and limits for affected cannabis products need to be updated in cannabis sales systems according to the amendments to Schedule 3. Based on stakeholder consultations, approximately 12 companies that need to update cannabis retail point-of-sale and e-commerce systems are small businesses. It is expected that incorporating the amended equivalencies and limits into these systems result in some costs to small businesses.

An additional source of costs to small businesses comes from the need for research licence holders currently conducting research with human participants to obtain a research licence, or to amend the terms and conditions on their existing licence, to authorize activities in relation to non-therapeutic research on cannabis by the second anniversary of the day on which these amendments come into force. Of the 88 impacted research licences, 39 are owned by small businesses. These consist of 37 research licences held by individuals and organizations and 2 research licences held by institutions. Given the assumptions outlined in the cost section, small businesses would need to submit 41 research licence applications, whether for a new research licence application or amendment, in 2024, incurring an associated cost.

In considering the impact of these amendments on small businesses, cannabis beverage producers are being provided with a 12-month transition period to sell and use existing products and labels. As a result, small businesses are not expected to pay any additional costs to relabel existing products or replace their existing label stock. Additionally, research licence holders conducting research with human participants are being provided until the second anniversary of the day on which the amendments come into force to obtain a research licence, or to amend the terms and conditions on their existing licence, to authorize activities in relation to non-therapeutic research on cannabis. This transition period reduces the number of small businesses that will need to obtain a research licence or amend their existing research licence immediately upon the coming into force of the amendments. This transition period also reduces the disruption to ongoing research projects that were valid immediately before the amendments came into force when compared to the situation with no transition period.

One-for-one rule

The one-for-one rule applies since there is an incremental change in the administrative burden on business. The amendments are considered a burden out under the rule. No regulatory titles are repealed or introduced. The net change in annualized administrative activities is a saving of $1,326 (expressed in and discounted to $2012, calculated over 2023–2032, and discounted 7% as required by the Red Tape Reduction Regulations).footnote 9

By authorizing analytical testing licence holders to produce, distribute and sell reference standards and manufacture and assemble test kits by applying for an amendment to their existing authorizations, these businesses no longer need to go through the process of obtaining a processing licence. This is expected to result in administrative cost savings for the businesses that will undertake these activities. As of August 2022, 137 analytical testing licence holders are considered to be businesses. As mentioned above, it is expected that the cannabis industry’s demand for reference standards and test kits could be met by 13 analytical testing licence holders engaging in these activities. Licence holders producing reference standards and test kits would be made up of approximately 3 medium and large businesses and 10 small businesses. Health Canada estimates that the processing licence application process that will be foregone by these 13 businesses would have taken, on average, 162.9 hours to complete. The time involved in this process would be divided between senior personnel (25%) with a cost of labour of $61.80 per hour (including overhead, $2012) and the holder of a licence for processing’s designated QAP (75%) with a cost of labour of $37.50 per hour (including overhead, $2012). Health Canada estimates that the licence holders would also have been required to renew their licence every three years. This is expected to take, on average, 22.5 hours to complete. The division of labour would be the same as the initial application. These cost savings are partially offset by the need for analytical testing licence holders to apply for an amendment to their licences to undertake these activities. Applying for this amendment is expected to take these 13 businesses, on average, 8 hours to complete. This work is split between the head of laboratory (25%) at a cost of labour of $56.25 per hour (including overhead, $2012) and the licence’s Responsible Person (75%) with a cost of labour of $37.50 per hour (including overhead, $2012). The net annualized administrative cost savings to analytical testing licence holders resulting from these amendments is $7,572.

The need for research licence holders conducting research with human participants to obtain a research licence, or to amend the terms and conditions on their existing licence, to authorize activities in relation to non-therapeutic research on cannabis by the second anniversary of the day on which the amendments come into force creates additional administrative burden. Assuming the transition period will end on January 1, 2025, 82 businesses would be impacted. These businesses can be further subdivided into 77 research licences held by individuals or certain organizations and 5 institution-wide research licence holders. Given the assumptions that individual licence holders will submit one research application while institution-wide licence holders will submit two on average, businesses are expected to complete 87 research licence applications due to the amendments. An application for a new licence or an amendment is estimated to take impacted stakeholders approximately 30 hours to complete resulting in 2 610 additional hours of administrative work for impacted businesses. The work is expected to be divided between a Biologist or Related Scientist (75%) with a cost of labour of $40 per hour (including overhead, $2012) and a Senior Researcher (25%) with a cost of labour of $56.25 per hour (including overhead, $2012). The applications are assumed to take place in 2024.

Since some of the impacted research licence holders would have applied for a renewal under the baseline scenario, some of the increase in administrative burden will be offset. Research licence holders who are also holders of a licence for processing are most likely to engage in ongoing research that would seek renewal beyond five years, as they are likely to conduct organoleptic research on products before they come to market, for example. Currently, 50 research licences that are of the maximum duration are held by businesses who are also holders of a licence for processing. Thirty of these licences are assumed to have been renewed under the baseline scenario. To reflect that these licences have different expiry dates (and thus would have been renewed at different times), it is assumed that 10 businesses would have renewed in 2025, 10 in 2026 and 10 in 2027. A licence renewal under the current framework is expected to take, on average, 8 hours with the split of work being the same as the initial application.

This means that there is a $6,246 increase in the annualized administrative costs for research licence holders conducting research with human participants resulting from the requirement for them to submit an application for a new research licence, or to amend the terms and conditions on their existing research licence, to be authorized to conduct activities in relation to non-therapeutic research on cannabis within the transition period.

Thus, the entire regulatory proposal provides $1,326 ($7,572 – $6,246) in annualized administrative cost savings.

Regulatory cooperation and alignment

Non-therapeutic research on cannabis, reference standards and test kits, and head of laboratory

Cannabis continues to be illegal for non-medical use in the vast majority of countries. Despite this restriction, many foreign jurisdictions, including the United States, allow research with cannabis.

As a result of the amendments, Canada may be perceived as being less aligned with international standards provided by the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH), of which Canada is a member. This is because international standards require that research substances, including cannabis, used in a clinical trial be compliant with GMP, not GPP. Further, these international standards, unlike the regime in these amendments, do not recognize a distinction between research on cannabis for therapeutic and non-therapeutic purposes. As a result of the amendments, more cannabis produced in Canada is available for use in non-therapeutic research on cannabis, as Canadian researchers are allowed to use GPP-compliant cannabis rather than solely GMP-compliant cannabis. It should also be noted that cannabis clinical trials that are authorized under the FDA will still align with ICH requirements, as those clinical trials are still required to use GMP-compliant cannabis.

The Act provides for the oversight and licensing of a legal cannabis supply chain of which federal and provincial/territorial governments share responsibilities. The federal Minister of Health is responsible for licensing the production of cannabis (cultivation and processing), among other activities, while provincial and territorial governments can authorize the distribution and retail sale of cannabis in their respective jurisdictions. Research involving cannabis with humans requires authorizations from Health Canada; however, researchers may also have to comply with other provincial and territorial requirements related to research.

Cannabis beverages

Many foreign jurisdictions that have legalized cannabis for non-medical use have set a public possession limit for dried cannabis, which is similar to Canada’s 30 g limit. In addition to the limit on dried cannabis, they also set equivalency amounts for other forms of cannabis. However, each jurisdiction has taken its own approach to developing the equivalency of a quantity, many of which differ from Canada’s (e.g. some have set limits based on THC). Given the existing differences in approaches among jurisdictions, the amendments to Schedule 3 to the Act do not affect alignment with the rules for cannabis possession in other jurisdictions. Moreover, international drug control treaties prohibit the import or export of cannabis, with exceptions for medical and scientific purposes. Individuals are generally not permitted to carry cannabis across borders and thus do not need to be aware of, or will not be affected by, the various public possession limits set by different countries.

Some provinces and territories have instituted corresponding public possession and sale limits on cannabis within their regulatory frameworks to align with the federal public possession limit. Most provinces and territories cross-reference Schedule 3 to the Act and, thus, the update to their public possession and sale limits are automatic once the amendments come into force. Provinces and territories were made aware of the amendments to the dried cannabis equivalency for cannabis beverages and Health Canada continues to work closely with those who wish to align their regulations with the federal limit.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus (GBA+)

Non-therapeutic research on cannabis

The amendments to enable non-therapeutic research on cannabis are intended to allow more cannabis-based research involving human participants with appropriate public health and safety controls. Historically, clinical trials and similar research have been conducted on white males, primarily due to their position of privilege and accessibility in society. However, with increasing evidence to suggest that certain demographic traits (e.g. sex, ethnicity, socioeconomic status) play a significant role in affecting disease determinants, there is a need to diversify the representation of research subjects.footnote 10,footnote 11,footnote 12 The underrepresentation of minority population participants in clinical trials and similar research is problematic because these research studies are essential in informing and advancing health care innovation, delivery, intervention, and outcomes.footnote 13

With respect to cannabis, Canadian surveys generally suggest there are differences in the prevalence of cannabis use according to age (with youth and young adults having higher rates of use than adults over the age of 25) and sex (with males having higher rates of use compared to their female counterparts). Furthermore, there is preliminary evidence to suggest that sex-based differences as to the effects of cannabis are due to differences in gonadal hormone levels, muscle mass, fat tissue distribution and other pharmacokinetic and pharmacodynamic factors.footnote 14,footnote 15 While there is a lack of robust research in the area, some studies suggest that there are a number of differences in effects of cannabis intoxication (e.g. duration of effect) between males and females.footnote 16 This further emphasizes the need for more research on the effects of cannabis on various subpopulations.

Head of laboratory

Similar to the historical realities discussed with respect to clinical trials and similar research, white males have also been historically more likely to attain a higher education credential (e.g. post-secondary education) in Canada. While diversification has increased in higher education institutions in Canada, there is evidence to suggest that racial/ethnic minorities, Indigenous peoples, individuals from lower socioeconomic groups, rural/remote areas, etc., continue to be underrepresented in higher education institutions, mainly due to financial and accessibility constraints.footnote 17 For example, university attainment for Indigenous populations is significantly lower (i.e. 14% of the off-reserve Indigenous population in 2020) compared to the total population (34%).footnote 18 Similarly, in 2016, of individuals that held a university certificate, diploma or degree at the bachelor level or above, only 31% were a visible minority.footnote 19 Socioeconomic class is also an indicator on whether one is likely to pursue post-secondary education. In 2014, 79% of 19-year-old Canadians from families in the top after-tax income quintile were enrolled in post-secondary programs, compared to only 45% of their peers in the bottom income quintile.footnote 20

In Canada, the attainment of a post-secondary degree is associated with employment rate, with university graduates having a higher employment rate compared to graduates with a post-secondary certificate or diploma.footnote 21 For example, among Canadians over the age of 25 in 2019, the employment rate for those with another form of post-secondary certificate or diploma (e.g. college diploma) was 69%, compared to 74% for university graduates.footnote 21 Amendments to the head of laboratory qualifications under the Regulations allow those who have a post-secondary diploma from a college or CEGEP in a relevant field for the work of the head of laboratory to be eligible for the position. This change may lead to a more diverse range of candidates becoming eligible for the head of laboratory position.

Cannabis beverages

The amendments increase the dried cannabis equivalency for cannabis beverages, therefore increasing the amount of cannabis beverages that an adult can possess in public to be more in line with the amount they can possess of cannabis in other forms. These amendments may result in changes in consumer preferences, leading to cannabis beverages becoming a more popular cannabis product; however, there is no evidence to support that this change to equivalency and the corresponding impact on consumer preferences would occur. Despite the effect on the public possession limit for cannabis beverages, all other public health controls on edible cannabis products (including cannabis beverages) remain unchanged, including the maximum limit of 10 mg of THC per immediate container.

The amendments to cannabis beverages may have a larger impact on young adults (20–24 years old). According to the 2021 CCS, among respondents who reported using cannabis in the last 12 months, the use of cannabis beverages was highest among 20–24-year-olds (22.3%) compared to those aged 25 and older (14.7%), and youth (16–19 years old) [10.7%].footnote 22 Further, according to the 2021 CCS, there was no significant difference in use of cannabis beverages between males and females (15.0% males vs. 16.1% females).footnote 22 However, according to the 2018–2019 Canadian Student Tobacco, Alcohol, and Drugs Survey (CSTADS), there was a difference among grade 7–12 students who reported using cannabis in the previous year. Males were significantly more likely to consume cannabis beverages (17%) than females (13%).footnote 23 While those under the age of 18 generally cannot buy cannabis beverages from a legal retailer, CSTADS provided a source of data showing that there may be significant differences in cannabis beverage use between males and females. In addition, young adults (20–24 years old) tended to consume greater quantities of cannabis beverages during a typical day use than those 25 years and older (25+).footnote 22 Among past 12-month consumers of cannabis beverages, the average amount consumed on a typical day by 20–24-year-olds when they consume cannabis beverages was 448.5 mL, compared to older consumers (25+), where the average amount consumed on a typical day was 331.6 mL.footnote 22

Contact: A detailed gender-based analysis plus report is available upon request. If interested, please send an email to cannabis.consultation@hc-sc.gc.ca.

Implementation, compliance and enforcement, and service standards

Implementation

Non-therapeutic research on cannabis

The amendments related to non-therapeutic research on cannabis come into force on the day the amended Regulations are registered. After the coming into force, parties interested in conducting this type of research can submit an application for a research licence authorizing activities in relation to non-therapeutic research on cannabis under the Regulations. The option to apply for a clinical trial authorization from Health Canada to conduct research on cannabis with human participants for non-therapeutic purposes under the FDR still remains. For example, researchers may want to use the results from the non-therapeutic research on cannabis to support their clinical trial application. Further, those already conducting clinical trials with cannabis do not have to seek further authorization under the Regulations. Such research continues to be regulated under the FDR and the Regulations, and relevant sections of the Regulations (e.g. production and record retention) continue to apply.

A two-year transitional provision is provided to allow existing research licence holders conducting research with human participants to complete their research following the coming into force of the amendments. After this transition period, such activities will no longer be allowed under the existing research licence, at which point researchers wishing to continue conducting their research will be required to obtain a research licence, or to amend the terms and conditions on their existing research licence, to authorize activities in relation to non-therapeutic research on cannabis. To assist researchers in the application process, Health Canada has published an updated administrative guide, namely, the Cannabis Licensing Application: Research Licence. This transitional provision does not impact research licences issued for research being conducted under the clinical trial framework, and these continue to be valid until their expiry or cancellation.

With the coming into force of the amendments, Health Canada will assess applications for research licences proposing to conduct activities in relation to non-therapeutic research on cannabis in accordance with the Act and the Regulations. The application requirements set out in the administrative guide could depend on various factors, including the type of cannabis being studied, the design of the proposed research and/or the overall level of risk to the participants. The Department will also assess changes relating to research licences, such as amendment requests, in accordance with the Act and the Regulations. Where appropriate, for example, to protect the health and safety of participants and to aid in monitoring compliance, terms and conditions can be applied to research licences.

Reference standards and test kits

The amendments allowing analytical testing licence holders and government laboratories to produce, distribute and sell reference standards and manufacture and assemble test kits come into force on the day the amended Regulations are registered. After the coming into force, parties other than government laboratories interested in producing, distributing or selling reference standards, or manufacturing and assembling test kits are encouraged to apply for an analytical testing licence. Current analytical testing licence holders need to amend their licence to be authorized for these activities. Individuals working in government laboratories are automatically allowed to conduct these activities.

Head of laboratory

The amendments to the qualification of the head of laboratory come into force on the day the amended Regulations are registered.

Cannabis beverages

The amendments to the equivalency for cannabis beverages come into force on the day the amended Regulations are registered. However, a 12-month transitional provision is included to provide licensed processors within the cannabis industry with sufficient time to update the labels of affected cannabis products, as described in the “Description” section above.

Communications and guidance

In addition to the current publication in the Canada Gazette, Part II, Health Canada will notify stakeholders via email and publication in the First Nations Gazette, and through the Consultation and Stakeholder Information Management System of the amendments.

Health Canada is committed to continuing to provide industry, the provinces and territories and other stakeholders with relevant and timely information. Guidance documents and compliance promotion and outreach activities (including notices) aimed at informing licence holders, government laboratories, researchers, importers/exporters, distributors and retailers of cannabis will take place to increase awareness of the measures set out in the amendments and to assist parties in achieving compliance. Additionally, Health Canada continues to engage with law enforcement authorities to ensure they are aware of changes to the public possession limit for cannabis beverages.

Consistency with other regulatory frameworks

The amendments have been developed taking into consideration existing regulatory frameworks such as the FDR and the Natural Health Products Regulations. Health Canada continues to evaluate opportunities to align with requirements under other frameworks, as appropriate.

Compliance and enforcement

The amendments for non-therapeutic research on cannabis include additional authorities to protect the health and safety of research participants. They are consistent with Health Canada’s broader approach to compliance and enforcement for cannabis, which includes compliance promotion, compliance monitoring and enforcement actions.

In alignment with Health Canada’s compliance and enforcement policy framework for the Act, and informed by the circumstances of each case, Health Canada takes a risk-based approach to its enforcement actions and chooses the most appropriate tool to achieve compliance and mitigate risks as circumstances warrant. The amendments provide Health Canada with the authority to suspend or revoke a research licence, where there are reasonable grounds to believe that the use of cannabis in the research presents a risk of injury to the health of a participant or other person that cannot reasonably be mitigated, or if the objectives of the research that are set out in the licence application will not be achieved.

Other regulatory amendments, such as those related to reference standards and test kits, head of laboratory, and the equivalency for cannabis beverages, do not impact Health Canada’s existing compliance and enforcement powers or policy.

Health Canada continues to provide oversight to verify that regulated parties are aware of and adhere to the amendments. Health Canada will take timely actions, where appropriate, to address risks to public health and/or public safety and non-compliance with the applicable requirements. Health Canada’s national compliance and enforcement approach continues to apply, including promoting and verifying compliance with the Act and the Regulations through inspections and other means, and working toward preventing non-compliance. These measures range from activities intended to educate and prevent non-compliance through compliance promotion to measures intended to bring a regulated party back into compliance or address a risk to public health or public safety. Furthermore, the enforcement measures under the Act and the Regulations continue to be available to Health Canada.

Depending on the circumstances, compliance and enforcement measures may include, but are not limited to, warnings, amending licences issued under the Act, suspending or revoking licences issued under the Act, issuing administrative monetary penalties of up to $1 million and issuing ministerial orders. In certain circumstances, Health Canada may also disclose relevant information obtained under the Act, for example, when it considers that the disclosure is necessary to protect public health or public safety.

To support its compliance objectives, Health Canada’s Controlled Substances and Cannabis Branch and the Regulatory Operations and Enforcement Branch, which are responsible for inspections, will continue their regular enforcement and compliance activities. Health Canada will also continue to collaborate with other partners, including law enforcement and the provinces and territories.

Service standards

Health Canada’s service standards for research licences vary depending on the type of licence required. The service standard for a research licence application is 42 business days, whether for a new licence or renewal, and 30 business days for an amendment. For an institution-wide research licence, the service standard is 180 business days for a new licence, 30 business days for an amendment, and 60 business days for a renewal. Service standards may vary depending on the level of risk posed by the research and the type of licence application submitted (e.g. new licence, an amendment, etc.) and will be set out in guidance.

The amendments do not affect service standards for other types of licences (e.g. processing or analytical testing), or any service standards regarding government laboratories.

Contact

John Clare
Director General
Strategic Policy Directorate
Controlled Substances and Cannabis Branch
Health Canada
Address locator: 0302I
Ottawa, Ontario
K1A 0K9
Email: cannabis.consultation@hc-sc.gc.ca