Helen Long is president of the Canadian Health Food Association
One of the core objectives of cannabis legalization was to eliminate the illegal market. According to Statistics Canada, only 29 per cent of Canadians reported purchasing their cannabis from a legal source in the third quarter of 2019. Based on that statistic, the legal cannabis system clearly needs improvement before it can claim to have delivered on that key objective.
While no one expected nationwide legalization to eradicate the illicit market within one year, reducing illicit sales and increasing the purchase of legal products should remain a top priority in year two. If our government and industry leaders work together, Canada can demonstrate to the world how carefully designed regulations for a previously prohibited commodity can safeguard public health, offset illegal sales, enable innovation and grow the economy through a brand new industry.
The prevailing “grey” market is a consequence of several factors, including limited product offerings, non-competitive pricing, barriers to retail access, and inconsistent product quality. One particular cannabis ingredient, cannabidiol (CBD), consistently makes headlines for its significant contribution to illegal sales and consumer confusion. CBD, often revered for its therapeutic properties, has been incorporated into health and wellness products across the globe. These products are readily available online and are growing in popularity amongst Canadians. Unfortunately, in most cases, the CBD products Canadians buy online are unregulated and of unknown quality, safety and efficacy.
The government’s decision to apply the same level of oversight to all phytocannabinoids – compounds in cannabis plants – regardless of their nature, source or safety profile plays a prominent role in the prevalence of unregulated CBD in the Canadian marketplace. In October 2018, policymakers created two distinct pathways to access cannabis: medical and recreational, all the while overlooking consumers’ growing interest in using CBD to support their wellbeing. As a result, there is no legal pathway to bring CBD health and wellness products to the Canadian marketplace.
What is the solution? To start, cannabis products should be regulated based on the product’s intended use, the ingredient(s) in the product and the product’s risk to the end user. CBD, for example, is a cannabis ingredient that is non-intoxicating (i.e. no high), non-addictive, and well tolerated with a good safety profile according to the World Health Organization. It naturally occurs in all cannabis plants, including hemp. Hemp, by definition, contains negligible levels of tetrahydrocannabinol (THC). In other words, CBD alone has little potential for recreational use and poses a relatively low risk to the average consumer. In Canada, we regulate natural substances like CBD as natural health products (NHPs) when the product is intended for optimal health. A risk-based approach would allow CBD – sourced from an establishment licensed to process cannabis or hemp – to be brought to market as a health product by applying the Natural Health Products Regulations (NHPR).
This approach aligns with the Final Report of the Task Force on Cannabis Legalization and Regulation, which states, “With respect to CBD and other compounds derived from hemp or other sources, each substance should be reviewed and regulated depending on its risks.” A risk-based approach would build on the existing cannabis regulations to give Canadians broader, more appropriate access to cannabis products, including CBD. Recreational and medical access would remain intact, while existing health product regulations are leveraged to separate the sale of lower-risk health products from products used recreationally. For policymakers, the benefits of this approach clearly work towards their mandate for cannabis legalization: promoting public health and reducing the popularity of the gray market.
The benefits of this model would extend beyond simply meeting the objectives of legalization. Regulating each substance based on risk, and aligning market access and regulatory oversight to each product’s intended use, would enable the growth of an innovative and globally competitive Canadian industry. New avenues for licensed processors to sell their derivatives would promote further growth within cannabis and hemp industries, while the ability to provide consumers with innovative health products would spark growth in the natural health industry. This approach would stimulate research investments into the therapeutic uses of cannabis constituents, including CBD, and it would also inspire greater innovation, creation of intellectual property, and collaboration between industries. Finally, it would give Canadian consumers access to safe products from Canadian companies that they can have confidence in.
As the global cannabis market matures, Canada will inevitably lose its first mover advantage if we don’t adapt quickly and make changes to the existing regime. Reaching our full potential through an integrated cannabis regime will require cooperation from all relevant industries, academic communities and policymakers. It’s time for our government to remodel our cannabis regime with innovation, economic growth, scientific research and the health of Canadians in mind. Our opportunity to lead hasn’t been lost yet, but the clock is ticking.