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Legal forms of edible cannabis, cannabis extracts and cannabis topicals may be lawfully produced and sold in Canada as of October 17, 2019. A limited selection of new products is expected to appear gradually, in physical or online stores, no earlier than mid-December.
Final regulations were rolled out June 14 and will come into effect October 17. New regulations will give authorized distributors and retailers access to three new classes of cannabis products, including:
- cannabis edibles (e.g. candy, baked goods, beverages)
- cannabis extracts
- cannabis topicals (ointments, oils, makeup)
Opportunities for restaurants and other food businesses
When dried cannabis became legal for recreational use in October 2018, the federal government continued to consult with the public on rules for cannabis edibles and other next-generation cannabis products.
Since then, food businesses across the country have speculated about the potential opportunities that the legalization of edible cannabis products would open up for the restaurant and food service industry — with good reason.
According to a recent report released by Deloitte, the market for next-generation cannabis products (“cannabis 2.0”) is forecast to be worth approximately $2.7 billion annually, with 50 percent of users reporting that they plan to consume cookies, brownies or chocolate at least once every three months.
Prior to the announcement of the new regulations, new revenue streams or opportunities for restaurants and food service businesses were expected to include:
- sales from cannabis-infused foods and beverages developed and sold from within the establishment
- sales from pre-packaged cannabis-infused products produced by other manufacturers
- opportunities to establish licensed lounges or clubs for cannabis consumption with dining or snack options
- tourism revenue from visitors from outside of Canada who want to experience the legalized cannabis landscape
- retail sales
Following the announcement, the food service industry may need to adjust its expectations. Read on to find out what’s allowed — and what’s not.
Regulations and restrictions on edible cannabis products
Cannabis edibles are considered cannabis under the law and will be strictly regulated under the Cannabis Act and its regulations. These regulations address the public health and safety risks associated with edible cannabis, including food-borne illness and cross-contamination.
According to Tammy Jarbeau, a spokesperson for Health Canada, strict new manufacturing controls will be put in place for the production and handling of edible cannabis, including a requirement for producers to develop and implement a written Preventive Control Plan.
“These new control measures are, in large part, drawn from and align with requirements that apply to food under the Safe Food for Canadians Regulations,” Jarbeau tells CIFS.
“Edible cannabis products and the ingredients used to produce them [will] also be subject to controls designed to address the risks of food-borne illness and contamination, including a prohibition on the sale of products requiring refrigeration or freezing and a prohibition on the use of raw meat, poultry and fish as ingredients.”
In addition to the ban on refrigerated or frozen edible cannabis products, or products that contain raw animal products, the following products are prohibited:
- cannabis-infused alcoholic beverages
- cannabis products containing tobacco or nicotine
- cannabis products containing caffeine
- cannabis products that could appeal to children (e.g. those that resemble popular food items or that are packaged to look like candy)
- vaping products with scents that could appeal to children
Health Canada will also uphold strict rules with regards to packaging and labelling to prevent companies from making the products appealing to young people or children. For example:
- products must be clearly labelled with a cannabis symbol
- products must contain a health warning listing the product's THC and CBD content
- very limited use of logos and colours is permitted
- products must be in child-resistant packaging
Peel-back labels will be allowed.
New regulations related to where, how and to whom cannabis edibles are produced or sold are expected to frustrate many in the cannabis industry who believe the rules are already too harsh. For example:
- Restaurants will not be allowed to serve food containing cannabis.
- The manufacture of all cannabis products in the same building as food products is prohibited.
- Edible cannabis products must be produced under sanitary conditions in facilities that meet specific physical security requirements.
- Only those with the appropriate licence from Health Canada under the Cannabis Act will be authorized to manufacture edible cannabis products for sale.
- Federal licence holders are not authorized to sell cannabis products for non-medical purposes directly to the public.
- Retailers / restaurants / commercial kitchens who wish to sell edible cannabis products for non-medical purposes must acquire the appropriate provincial or territorial authorization.
Bill Blair, Minister of Border Security and Organized Crime Reduction, who is also responsible for executing the government’s cannabis policy, has dismissed these complaints, stating that the government’s first priority is to ensure the health and safety of Canadians, as well as to protect young people and disrupt the illegal cannabis market.
“It's not the government's intention to promote the use of this drug, but rather to make it legally available in a well-regulated manner to reduce the social and health harms often associated with cannabis use,” Blair said in an interview with BNN Bloomberg.
“I believe there are legitimate concerns about how do we protect Canadians from cross-contamination,” he continued. “We are now looking at requiring manufacturers to have separate facilities, but that does not mean it can't be in the same general proximity in a larger building, for example.”
Enforcement and penalties for non-compliance
The Cannabis Act contains a number of enforcement tools that may be used in determining the appropriate actions to take to prevent or address non-compliance with the Act or its regulations.
According to Jarbeau, enforcement decisions will be based on a review of the situation and all relevant information, including the health or safety risk and the compliance history of the individual or corporation involved.
“Tools and measures range from compliance promotion and awareness activities, which are intended to educate and prevent non-compliance, up to measures intended to correct non-compliance or address a public health or safety risk,” says Jarbeau. “[These measures may include] the issuance of a warning letter, suspension or cancellation of a federal licence, the issuance of a ministerial order, or the issuance of administrative monetary penalties (up to $1 million).”
“Contravention of the regulations is an offence that is subject to the penalty set out in section 44 of the Act. For example, a person who contravenes the regulations by using a prohibited ingredient in a cannabis product or by selling a prohibited product may be found guilty of an indictable offence and fined up to $5 million, or imprisoned for a term of up to three years, or both.”
More information on Health Canada’s approach to compliance and enforcement of the Cannabis Act can be found in the Compliance and Enforcement Policy for the Cannabis Act.
Get more information
Find out what the industry needs to know about cannabis, or apply for a licence to grow, process or sell legal cannabis at www.canada.ca.
