Experts: Canada must develop regulations on cannabis edibles, extracts quickly

By Tony C. Dreibus

Canadian officials must craft rules on infused products quickly to ensure patients buy from federally licensed cannabis companies instead of illegal dispensaries or the black market, industry experts said.

The Supreme Court of Canada last week struck down a provision in the country’s medical marijuana law that restricted cannabis production, possession and consumption to dried flower, calling it “arbitrary” and “not in accord with the principles of fundamental justice.”

The ruling is a victory for the MMJ industry, as it will open up a potentially huge market for edibles and extracts.

But the country’s licensed medical cannabis companies aren’t yet legally allowed to produce and sell such products – and it’s unclear when they’ll be able to do so.

The government will now have to develop regulations around infused products. Until it does, licensed companies can only process flower, and they are required to mail the dried product to patients who can smoke or vaporize it.

Jason Gratl – a Vancouver, British Columbia, lawyer who intervened in the Supreme Court case on behalf of the BC Civil Liberties Association – said it’s critically important for the government to move forward in drafting regulations for the legal sale of infused products as soon as possible.

With patients now able to possess edibles and extracts, illegal dispensaries and the black market might start selling infused products before licensed businesses get the go-ahead.

The fear is that patients might stick with these sources in the long run.

“If I were a conservative drug warrior, I would open the field to mail-order suppliers immediately, without delay, for fear of entrenching the gray market dispensaries” as suppliers of concentrates and edibles, Gratl said. “Failure to create a lawful supply of marijuana derivatives would invite failed prosecutions and undermine the current supply scheme from an economic point of view.”

Dispensaries are technically illegal, but many exist in the western part of the country, particularly in Vancouver.

Canada has licensed a total of 25 companies to either cultivate or sell dried cannabis. Six are only allowed to grow and two can only sell cannabis. The rest are allowed to both produce and dispense medical marijuana.

Two of licensed companies told Marijuana Business Daily that they’re already preparing for the eventual sale of infused products.

Greg Engel, the chief executive at Tilray, said his company plans to conduct research and development as soon as its lawyers are sure it’s legal to do so. The company is a subsidiary of Privateer Holdings, which also owns Marley’s Naturals, a producer of skin care products and flower made from strains favored by the namesake reggae legend.

Being part of a company that already makes cannabis-infused products gives Tilray a competitive advantage, he said. For now, however, the company is taking a wait-and-see approach.

“We’re getting these questions (about edibles) from patients all the time,” Engel said. “Physicians are looking for more precise forms to be developed, and a certain percentage of patients are not going to turn to dry forms to smoke or vaporize. We’re optimistic we’ll be in a position to do research and the initial development (once rules are outlined).”

Sebastien St-Louis – CEO and founder of Hydropothecary, which received its license earlier this month to sell cannabis to patients – said the ruling is good news for businesses that want to capitalize on the edibles and concentrates markets, which have become popular in the U.S.

“It’s pretty tremendous for the industry as a whole,” he said. “It shows things are moving in the right direction for patients and business owners.”

Executives at Hydropothecary will work with regulators to figure out how they can legally produce and sell edibles and other products made from concentrates. St-Louis said he expects regulations will be put in place “fairly quickly,” and that the company will be ready to go when that happens.

Still, he said, too much is still unknown to make any precise forecasts on when rules will be implemented or what they’ll look like.

“We have a pretty solid research team working on couple different technologies in that area,” St-Louis said. “Of course, before we can implement that, we need to make sure it’s OK with regulators. Once those are sorted out we’ll be able to announce more concretely what the next steps are.”

While the Supreme Court ruling is a step in the right direction, it’s just that – a step, said Kirk Tousaw, counsel for the respondent who was victorious in the case. The government needs to back off its hard-line stance and seeming disdain for medical cannabis and allow patients broader access, he said.

“It’s a mess because the government persists in maintaining general prohibition,” Tousaw said. “We have to fight for access to sick people, we have to fight for different forms of medicine – none of these battles should be happening in court. We need to get out of the stone age and put in place some reasonable regulations that benefit all Canadians.”

Tony C. Dreibus can be reached at [email protected]

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