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Cannabis Regulations Continue to Evolve

Canadian cannabis industry regulations continue to evolve and expand as reported by Health Canada in their new 2022-2023 Department Results Report.

The report highlights the work Health Canada has done over the past year including continuing to displace an illicit market, issuing over 420 new federal licenses, and assessing 41% of current license holders for 96% compliance rate.

With Health Protection and Promotion as a core responsibility, Health Canada works with partners to assess, manage, and communicate the health and safety risks and benefits associated with cannabis and other controlled substances. These risks are managed through rigorous regulatory frameworks and by communicating risks and benefits to Canadians so that they can make informed decisions.

Restrict Access

Health Canada continued to support the effective implementation of the Cannabis Act to protect public health and public safety—in particular, the health of young persons by restricting their access to cannabis—while providing adults of legal age with access to regulated products and reducing illegal activities involving cannabis.

Health Canada invested $145+ million in 314 projects that focused on substance use, prevention, harm reduction, and treatment as it relates to cannabis and other controlled substances. This included 13 projects across five provinces to support public education and awareness on the use of cannabis, tobacco, vaping, and alcohol products.

The Department invested $2.3 million in the Canadian Centre on Substance Use and Addiction for cannabis research to build evidence needed to inform policy.

Cannabis Usage in Youth

Health Canada continued to closely monitor cannabis usage rates through examining the results from the 2022 Canadian Cannabis Survey published in December 2022.

The survey found that the number of respondents reporting cannabis use in the previous 12 months remained higher among youth aged 16-19 years and young adults aged 20-24 years compared to individuals over 25 years old.

Since the coming into force of the Cannabis Act in 2018, the prevalence of past 12-month cannabis use in youth aged 16-19 years has remained relatively stable.

Displacing Illicit Market

Health Canada says, “A tightly regulated cannabis industry capable of delivering a sufficient supply of quality-controlled products continued to be in place in 2022-23” and they observed progress towards the displacement of the illegal cannabis market.

The proportion of household spending on cannabis in the legal market has grown from 9% in Q3 2018 to 71% in Q4 of 2022.

Expanding Industry

The federally regulated cannabis industry continued to expand and diversify. In 2022-23, Health Canada granted an additional 179 licences for the cultivation, processing, and sale of cannabis for medical purposes, 125 licences for research, analytical testing, and/or cannabis drug, and 120 for industrial hemp. The Department also granted 1,805 import and export permits.

Health Canada also continued to work to strengthen the integrity of the medical access framework.

Diverse and Competitive Industry

Health Canada says it, “continued to enable a diverse and competitive cannabis industry comprised of small and large businesses, with participation from Indigenous, Black, and other racialized communities.”

For instance, through a dedicated Indigenous Navigator Service, Health Canada issued an additional 13 licences for cultivating or processing cannabis to Indigenous-owned or affiliated applicants in 2022-23 for a total of 56 licensed Indigenous businesses. An additional six licences were awarded in 2022-23 to Indigenous-owned or affiliated applicants to cultivate or process industrial hemp, for a total of 27.

Law Enforcement and Compliance

Health Canada continued to promote, monitor, verify, and enforce compliance with cannabis legislative and regulatory requirements. The Department is responsible for regulatory oversight of the legal industry while law enforcement agencies are responsible for enforcing the criminal prohibitions associated with cannabis.

In 2022-23, Health Canada undertook over 779 compliance promotion activities (e.g., emails, webinars, calls, letters), reviewed a total of 23,417 notices of new cannabis products, undertook compliance promotion action for 8% (over 1,800 notices), investigated over 1,185 cannabis complaints, and made 142 referrals to law enforcement for possible enforcement action.

The Department also assessed 41% of current cannabis license holders. It inspected 377 cannabis license holders and found that industry complied with Health Canada regulations 96% of the time.

Update on Cannabis Act Review

The Department continued to closely monitor the impacts of cannabis legalization and regulation.

The Legislative Review of the Act was launched in September 2022. The review is led by an independent Expert Panel that will provide advice on progress made towards achieving the Act’s objectives. In October, the Expert Panel released a new report summarizing what they heard during their public consultations between December 2022 and June 2023.

The Minister of Health is required to table a report setting out the findings of the review in both Houses of Parliament by March 2024.

Tags: Cannabis Act (40), Cannabis Regulations (101), Health Canada (64), Health Canada regulations (12), regulatory burden (7)