Making Amend(ment)s

By David Halpert

While the NewYear is typically a time for making resolutions, lately the talk has been about making amendments with respect to the cannabis industry, specifically the Health Canada amendments to The Cannabis Act and its regulations concerning cannabis research and testing, and cannabis beverages that were approved and are now in force as of early December.

These amendments include (among others):

» An increase in the public possession limit for cannabis beverages to a level that is similar to other forms of cannabis, such as solid edible cannabis products (e.g. gummies or chocolate). Adults in Canada are now able to possess up to17.1 litres (equal to 48 cans of 355 ml each) of cannabis beverages in public for non-medical purposes, which is up from approximately 2.1 litres (equal to five cans of 355 ml each);

» Changes to how Health Canada regulates non-therapeutic cannabis research with human participants, helping make the process of conducting this research easier, while still maintaining appropriate public health and safety controls;

» Allowing analytical testing licence holders and federal and provincial government laboratories to produce, distribute and sell reference standards and test kits, to increase access to cannabis testing materials and thereby support access to a quality-controlled supply of cannabis; and

» Broaden the educational qualifications for the Head of Laboratory, a position that is required for an analytical testing licence and is responsible for all cannabis testing activities that occur at the licensed site.

Health Canada also notes that while there is no federal limit on the amount of cannabis that can be purchased or sold at a retail location, some provinces and territories have set purchase limits in their jurisdictions.

While these changes are certainly a welcome step in the right direction (at least at the federal level), there’s still a long road ahead when it comes to a more equitable industry as a whole. If we were to look at the current mandates of the Cannabis Council of Canada you’d notice its following aims:

» The setting of the excise tax rate at “the greater of $1/gram or 10% of the sale price of the product.”

» The creation of a Health Canada Annual regulatory fee at a rate of 2.3% of revenues.

» An Excise Tax Framework that holds licensed processors responsible for the collection and payment of excise duties.

» The setting of excessive provincial cannabis distributor mark-up rates (e.g. the Ontario Cannabis Store’s rate of 20-30% of the final sale price of cannabis products, depending on the product category), a regulatory regime that impedes the success of the public health and safety objectives of legalization

If we look at the consequences, these shortcomings as a whole have resulted in amenic profits for Canadian producers and processors, governments experiencing a 225% increase in defaults and arrears of cannabis excise duty payments, and half of all companies granted protection under the Companies’ Creditors Arrangement Act (CCAA) being Health Canada Licence Holders in 2022 as well as an estimated 3,000,000 individual Canadians who invested in cannabis companies, which have lost more than $131 billion. Let’s hope 2023 will be a step in the right direction.

/ CEO, Straight Dope Media Inc.

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