Canadian Government Executive - Volume 26 - Issue 05

Regulations January/February 2021 // Canadian Government Executive / 17 associated health claims made yet. Why can producers not label CBD products as “helps you sleep”? There’s a good answer. Marketed products that make a health claim require Health Canada approval and issuance of a Drug Identification Number (DIN). To acquire a DIN, clinical trial research must be done on the product to support this claim through safety and efficacy data. The application and review process are extensive and can be fairly onerous. Still, pharma is an industry that is no stranger to scrupulous record-keep- ing and rigorous quality practices. How- ever, companies producing and selling cannabis products with approved health claims have been slow to roll out in the cannabis sector. Why is this? Despite the different licences they might consider ap- plying for, such as a cannabis processing licence or cannabis drug licence, which are both compatible licence types that can be held at one facility, there is an ongo- ing confusion about which licence applies based on a company’s specific activities. These range from what they can produce and sell, how they label and market, and which businesses that they can buy from and sell to — and they all present serious challenges. One of the most, if not the most, sig- nificant challenges for a pharmaceutical company entering the cannabis indus- try remains to be the cannabis licensing process. From an activation energy per- spective, it takes a fair amount of inertia to overcome the momentum required to change direction to accommodate the challenges in adapting to cannabis- specific regulations in an industry that has been relatively well established for decades. Imagine telling a pharma facil- ity to install a cannabis cage in a level 9 vault because Health Canada requires cannabis to be physically segregated from non-cannabis products. Compounds that have an illicit street value of 10x can- nabis have less nuanced storage require- ments. Moving into the cannabis space means making improvements to already robust physical security measures, sepa- rating areas that are designed to be used for cannabis, limiting employee access to those who are directly manipulating the cannabis, and creating extensive se- curity clearances that go all the way up the corporate flagpole. As many pharma companies have a base in the U.S., several officers and directors would be required to seek these clearances. In a landscape in which cannabis is not federally ille- gal, such as the US, there are few in the pharma space that are comfortable with the potential risk. Achievements and Improvements Health Canada has attempted to incite a strong legal cannabis regime by including individuals from the unregulated cannabis market in the regulated commercial pro- duction system. For example, those who have previous cannabis-related offenses in their background may be allowed to ob- tain security clearance and bring forward their practical knowledge and experience to benefit the legal industry. Health Canada has also made allow- ances for “sick genetics” to transition to the legal regulated market. “Sick genetics” is a term often used by master growers to describe the elaborate process of selective breeding of cultivars of cannabis for the expression of desired physical or chemical traits. These traits have led to plant genet- ics that are typically characterized by high levels of THC and the ability to thrive un- der their unique growing conditions. During the application process, appli- cants can submit a one-time Declaration of Starting Material. This declaration pro- vides a channel of preferred phenotypes of cannabis bred over decades to enter Health Canada’s regulated channels. It contains a list of the type of starting mate- rial, such as plants and seeds, as well as the quantity. The advantage is clearly that the new licence holder does not have to declare a source. Once these new plants and seeds are declared and brought in, they will be part of the federally regulated channels and can be sold to other licence holders. Cannabis legalization has achieved the goal of increasing consumer access to quality products and accurate information about the levels of THC and CBD being consumed. These details were not avail- able before, and they make for a healthier and safer way to enjoy cannabis. The regulatory allowance of various product formats has also been positive for the industry, and instrumental in curbing the illicit market. Encouraging alternative methods of cannabis consumption can al- low more consumers to learn about the rich character of the cannabis market and understand the different ways legal can- nabis can be enjoyed in a safe manner. While there is still work to be done in demystifying legal cannabis regulations to the regulated parties and broader com- munity, discussing and agreeing upon the areas where the regulatory landscape can be improved, and implementing change, will allow the industry to begin keeping pace with consumer demand. Lucas McCann is the Co-Founder and Chief Scientific Officer of CannDelta, a regulatory and scientific cannabis and psychedelics consulting company based in Toronto, Ontario.