Health Canada Announces New Changes to Cannabis Regulations

On December 9th, Health Canada announced that amendments to the Cannabis Act and its regulations concerning cannabis research and testing, and cannabis beverages which came into force as of December 2, 2022.

The Breakdown

• The regulatory amendments increase the public possession limit for cannabis beverages to 17.1 liters (578.2 fluid ounces), equivalent to 48 standard-sized 355-milliliter beverage cans.
• Analytical testing licence holders and federal and provincial government laboratories will now be allowed produce, distribute, and sell reference standards and test kits.
• Non-therapeutic research on cannabis involving human participants no longer needs to meet the requirements for clinical trials under the Food and Drug Regulations (FDR) and can be conducted solely under the Cannabis Regulations.
• The educational qualifications for the Head of Laboratory position for an analytical testing licence holder have been expanded to allow for a larger pool of qualified candidates to occupy this role.

Our Perspective

Changes to the beverage purchase limit is receiving the most attention, something the industry has been lobbying for since the rules were first announced, with previous regulations effectively restricting beverage purchases to approximately five standard-sized cans. However, the announcement has been met with a surprising amount of negativity, with many arguing that the change will not have a significant impact on cannabis beverage sales, as it does not provide a better value-proposition and value equation to the consumer. Regardless of whether it’s a product category that holds significant market share or that pressing of an issue, it’s certainly a positive step forward, particularly for consumers and producers that actively participate in this category. The more significant aspect of this announcement might actually be around analytical testing, with the new regulations helping to improve the quality of analytical data as well as providing labs with cost effective chemical standards at much lower prices in the form of validation kits and low-cost routine QA/QC material.

Pressure Being Placed on AGCO to Address “Unfair” Cannabis Data Sales Deals in Ontario

Industry stakeholders are pushing back against alleged “pay-to-play” schemes that effectively allow cannabis retailers to sell store-level data to licensed producers in exchange for shelf space which according to some, violates the Alcohol and Gaming Commission of Ontario (AGCO) rules around inducements, reports MJBiz Daily.

The Breakdown

• The issue grew in prominence earlier this year after the AGCO attempted to clarify its rules on inducements – or “slotting fees” – by issuing an update to the Registrar’s Standards for Cannabis Retail Stores.
• Despite this attempt by the AGCO to directly address inducements, there is still a lack of clarity, and the sales-data workaround falls into a quasi-legal gray area, given that brands and manufacturers aren’t paying directly for shelf space and not explicitly defining the amount of product that must be sold or displayed.
• These data deals, which typically are paid out by Licensed Producers as a monthly fee can reportedly amount to tens of thousands of dollars or more and are being used (often by large retail chains) as a second stream of income and allowing them to sell cannabis products at a loss.
• The AGCO confirmed that they have received complaints about the prohibited inducements, and that they are actively monitoring the situation, but will not say whether it has taken any specific action yet regarding the matter.

Our Perspective

The controversy surrounding these data deals is reaching a precipice, with strong reactions coming from both sides of the argument. There has even been a petition launched, with an accompanying video further explaining the issue in more detail. Although some may argue retailers renting out shelf space is common practice and should not be classified as anti-competitive, there does appear to be a lack of transparency regarding these deals that favor large retailers. The AGCO should draw a clear line on whether this activity is permitted or not.

Quebec Becomes First Province to Cover Cost of Psilocybin-Assisted Therapy

According to non-profit TheraPsil, a non-profit that facilitates legal psychedelic treatment, Quebec is the first province in Canada to cover the cost of psilocybin-assisted psychotherapy, reports The Growth Op.

The Breakdown

• Two doctors have successfully billed the province of Quebec after completing psilocybin-assisted psychotherapy treatment for a patient with legal access granted through Health Canada.
• TheraPsil is now working “diligently to achieve the same outcomes in other provinces”.

Our Perspective

This is a great step forward for patients that are seeking out psychedelic-assisted treatment, which is notoriously expensive and difficult to access. Considering medical cannabis is still struggling to receive insurance coverage, this indicates that psychedelics may not face the same challenges in the future, although there is clearly a lot of progress still to be made.