Hotly anticipated draft regulations to allow legal sales of cannabis edibles and concentrates in Canada are expected to be released before Christmas, according to sources, paving the way for a new wave of businesses and entrepreneurs aiming to capitalize on the country’s recreational marijuana industry.
Edibles sales will begin next year, opening a potentially huge new market for a variety of products, including infused beverages, as well as concentrates.
Marijuana Business Daily has learned that the draft regulations for edibles and concentrate products will soon be published in the Canada Gazette, the government’s official newspaper.
The Gazette – published every Saturday – is where new and proposed regulations are first posted.
A public consultation process will follow to allow industry executives, the general public and local government officials to weigh in on the draft rules.
“We have until Oct. 17, 2019, but with the expectation of the election next October, it would mean we would have to have CG2, which is the final version of the regulations, out well before the election,” a source said, requesting anonymity.
“Christmas is coming early.”
The final version of the regulations could be published in the Gazette around July, leaving time for the rules to take effect before Oct. 17, 2019.
Canada legalized recreational marijuana products such as flower and oil on Oct. 17, 2018, while the Cannabis Act mandates that the legal sale of edibles containing cannabis and cannabis concentrates be permitted no later than one year after the law comes into force.
Edibles and concentrates are a huge part of cannabis markets in U.S. states with adult-use laws on the books.
Colorado saw sales of edibles and concentrates rise from 26.3% of the market in 2014 to almost 40% in 2017, according to a report by the Marijuana Policy Group for the Colorado Department of Revenue.
Canadian marijuana companies are already spending heavily to prepare for the legalization of edibles and concentrates.
Many companies are in talks with existing food and beverage manufacturers that want to extend brand clout into the cannabis space, said Lisa Campbell, CEO of Toronto-based Lifford Cannabis Solutions.
“The entire cannabis industry is eagerly awaiting Health Canada’s proposed regulations for edibles,” she said. “Many questions still remain about what categories of edibles will be approved, but beverages seem to be a preferred category as they are shelf stable and provincial distributors are already familiar with distribution.”
Lifford is working with companies such as Ontario licensed producers WeedMD and TerrAscend Canada, as well as Token Naturals in Alberta, to bring “premium infused products” to market across Canada as soon as Health Canada permits edibles and beverages.
Token Naturals, focusing on extraction and product development, is preparing by developing extracted products.
“This new share of the market is going to spark innovation and investment and bring new customers to the space,” said Keenan Pascal, co-founder and CEO.
“Token is building partnerships with food and drink manufacturers that are interested in the cannabis space. We are working with partners to design technical formulas for products and strategies to bring these infused products to market.”
What to watch for
The regulations will provide a legal framework for businesses and entrepreneurs looking to capitalize on the new market for edibles and concentrates.
Deepak Anand, vice president of Toronto consultancy Cannabis Compliance, said there are five issues he will be looking for clarity on:
- The need for transparency (in ingredients) and traceability
- How variations in nutrient and non-nutrient components of foods pose challenges in product development and validation for analytical testing
- Appropriate dosing amounts and serving size boundaries
- Packaging to avoid appeal to children; and the need for tamperproof food packaging
- Labeling requirements
He added that ingestion and product breakdown labeling would appeal to consumers.
“Different types of edibles – butter, infused drink or cookies – have different processing times after ingestion for breakdown,” he said. “The breakdown pathway and the time it takes the body to process would likely need to be considered, because oral doses are processed by the digestive system and the liver before entering the bloodstream.”