Health Canada Cannabis Regulation Engagement

January 19, 2018

To: Cannabis Legalization and Regulation Secretariat, Health Canada

From: RavenQuest BioMed Incorporated

Subject: Health Canada Cannabis Regulation Engagement

Impending federal legislation pertaining to the legalization of regulated non-medicinal (recreational) cannabis represents an obvious economic opportunity for Canada, not least of which will be the expected reduction in organized crime activity. These significant benefits do come with a number of challenges which must be addressed.

Our organization makes this submission in the interest of helping the Health Canada implement a regulatory regime that aims to keep members of the public safe, healthy and aware while also creating the conditions necessary for optimal market efficiency.

Senior management within our organization brings a depth of knowledge which we believe can provide meaningful input on a number of relevant issues.

Specifically, our CEO, George Robinson, has been active as a highest-level advisor and consultant to multiple licensed cannabis producers since the MMPR (predecessor to the ACMPR) was introduced in 2013. He has been instrumental in helping a lengthy list of producers meet and/or maintain the rigorous standards of compliance set out by Health Canada, and is seen by many as a visionary with an in-depth understanding of the myriad aspects – facility design, product safety & efficacy, market acceptance/development, product evolution – of this burgeoning industry.

Bill Robinson, who heads our Government and Indigenous Relations efforts and recently retired as President and CEO of the Alberta Liquor and Gaming commission, brings a wealth of knowledge and expertise in liquor regulation in a province that mirrors British Columbia in its diverse population distribution across larger centers, mid-sized cities and remote, rural communities (we believe, for example, that retail distribution should be addressed according to community size and proximity to larger centres, as is seen with retail liquor in BC).

From our perspective a healthy, safe and economically beneficial introduction to legalized cannabis is in the interest of all stakeholders. With this in mind, many of our recommendations revolve around the principles of Education about safety issues surrounding cannabis use and Awareness about what constitutes responsible versus irresponsible enjoyment of the various products that will become available to the consuming public.

We see ourselves as contributors with something to add to, rather than take from, the consultation process. The following are our recommendations for each of the key issues identified by the ministry.

Licenses, Permits and Authorizations

With respect to these issues, we are in agreement with the model put forth by Health Canada. In particular, we see the introduction of the Micro-Cultivator license class as a prudent acknowledgement of the existing landscape, particularly in provinces such as British Columbia. Our suggestion is that the appropriate limit for production capacity for these facilities be 250 kg per year. In BC, several thousand otherwise-law abiding citizens have made a cottage industry producing small quantities of cannabis outside the legal boundary. While this practice does skirt the law, many of these individuals have never harmed another person and have clean criminal records who see cannabis cultivation as a lifestyle or a way to make a living. The introduction of the Micro-Cultivator invites these otherwise law-abiding citizens out of the shadows and allows them to become contributing members to a burgeoning and well-regulated industry. Micro-Cultivation will also serve to meet the expected huge demand for product as we move toward legalization. As an added benefit, the cannabis consumer tends to be choosey and often fickle in his or her preferences. This means the ultra large scale grow facilities at large LPs may or may not meet the vast variety of differing cultivars demanded by the public. Hence, a wide variety of Micro-Cultivators should work to fill gaps in market preferences (both medical and recreational), just as craft beer has done in the beverage industry. While the introduction of this new license class presents significantly more supply and competition for aspiring LPs such as RavenQuest, we still see this as a valuable and integral component of a healthy operating marketplace.

While Micro-Cultivation is a positive development, it doesn’t come without concerns for consideration. For example, there appears to be a disconnect between the prohibition of sale of dried flower by Micro- Cultivators and the permission of sale of processed product by Micro-Processors. It is our position that, to avoid the double standard and ensure the most efficient cannabis marketplace, we as a nation restrict the sale of any cannabis products directly to the public, and instead require these smaller facilities to sell to an LP for processing or distribution. This allows smaller operations to concentrate on their core competencies: presumably growing a pure and healthy product. More importantly, the many thousands of Micro-Cultivators/Processors in existence presents a serious and very real regulatory and compliance challenge with respect to product diversion into the illicit market. To solve this problem, we would highly recommend Micro-Cultivators as well as Micro-Processors both be required to maintain arrangements with larger LPs to allow for systemized monitoring and tracking of Micro cannabis sales and activity.

Analytical Testing

We are in agreement with the proposal to require analytical testing of product be done by independent third-party laboratories to prevent any appearance of conflict of interest and to maintain the efficacy of the testing methodologies, adding piece of mind to public perception of product safety.

Import and Export

We are in agreement that a permit be required for the import/export of cannabis products. We would also suggest that, as cannabis becomes recreationally legal in other jurisdictions (as we believe will happen), the Federal Government make preparations to develop the proper permitting channels for recreational import/export as it sees fit to do so.

Research

We are in agreement and encouraged that an authorization allowing for research on the cannabis plant is included. As cannabis is still widely little-understood, this will allow for better understanding of the plant, it’s genetic makeup, how best to express the plant, stabilize its expression and learn more about its medical benefits.

Security Clearances

It is our organization’s position that the provision of security clearances to new Micro-Cultivators and/or retail storefronts is pivotal to the success of crowding out the illicit market in Canada.

How can it be that organized criminals, responsible for chaotic violence, intimidation, threats, extortion and myriad other criminal activities be allowed to seamlessly transition one aspect of their many business lines into legitimacy? This must not be allowed, which is why the existing security clearance framework should continue.

With that said, we recognize that many small cannabis growers who operate currently outside the law are not immersed in organized crime in any meaningful fashion, and would welcome the opportunity to transition to a legitimate, tax-paying, regulated business model.

It is our opinion that these individuals be granted security clearance after careful consideration of their background, character, and business plan.

It should be noted that, with reference to our above stated position on Micro-Processors being allowed to sell end product, we think this presents potential problems with those Micro-Cultivators who may have sold into the illicit market prior to entering the legal market, and very difficult to monitor.

Again, this further validates the need to require all Micro-Cultivators as well as Micro-Processors to sell their dried flow as well as processed product directly to an LP, for ease of tracking and to reduce the risk of diversion of product.

Cannabis Tracking System

For many of the reasons discussed above, we endorse the implementation of a nationwide cannabis tracking system.

Product Standards

We believe Canada is on the right track with respect to ensuring a regulated, safe, product is available for consumers.

Examples through legalized states in the USA have demonstrated poor public safety results such as the accidental consumption of extremely high-TCH edibles by children. The goal, first and foremost, should be to ensure that cannabis products are created with the following in mind:

  • Safety
  • Consistency
  • Predictability
  • Directed at the adult market

We agree with Canada’s approach to testing for contaminants and levels of THC/CBD. We also agree that the mixing of THC with other inebriants (such as alcohol or tobacco)’ should be prohibited from a product perspective and discourage from a public awareness perspective.

On strength of product, we are in agreement and cannot overstate the importance of stable and known dosing quantities for cannabis product. We endorse the position that, for ingestible products, a single unit would not contain more than 10 milligrams of THC, and that cannabis oil be limited at 30 milligrams per milliliter THC concentration.

Packaging and Labelling

It is simply not constructive or viable from a health and safety standpoint to allow for packaging or branding that appeals to children, so we are in complete agreement with the language to that effect.

From listing the contents, lot number, weight, packaging date, expiry date, recommended storage conditions, THC/CBD content by dose, child resistant packaging, health warning labelling as well as the bold statement KEEP OUT OF REACH OF CHILDEREN, these all make sense to our organization.

We also endorse the idea of a standardized THC symbol on all product packaging.

Our position on the use of brand elements is that, given the entirety of the requirements listed above, cannabis organizations would be in full compliance with providing the consumer ultimate transparency. With this in mind, we feel that, should branding be of a sophisticated, adult nature – not aimed at children– there should be limited or no restriction on the approach each company takes with respect to branding – as is the case in the similar alcohol industry. Branding should be done in a socially responsible, adult-targeted fashion, but it also represents an organization’s key opportunity to differentiate. This kind of competitiveness fuels a healthy industry, as is seen in other similar marketplaces. We do not see the harm in robust branding allowances, within the context of the non-child-
targeted branding discussed above.

It also bears noting that responsible branding, done properly, will be a key differentiator from illicit product. The federal government’s stated goal is to compete with, and ultimately crowd out, the illicit market. We see responsible branding as a key weapon in the coming competition with illicit providers,

Cannabis for Medical Purposes

We are in agreement with the framework as it exists currently and with the proposed change to allow for the transfer of patient registration from one LP to the next.

With respect to access and distribution of medical cannabis, we believe a disconnect currently exists which is best described using the points below:

  • Currently, medical cannabis may only be legally obtained via mail order
  • Black market retail operations, calling themselves “dispensaries”, most notably in larger centres such as Vancouver and Toronto, are conspicuously selling cannabis outside the laws of Canada
  • RCMP veteran gang investigators have testified during panel discussions that, while organized crime is rarely seen carrying cannabis into many dispensaries of this type, they are often witnessed carrying suitcases full of cash out of these same dispensaries
  • This indicates that at least some of the existing “grey market” dispensaries are sourcing
    unregulated, untested and potentially dangerous cannabis from organized crime, and simultaneously selling the product under the guise of medicine (through the use of the word “dispensary”) to an unsuspecting public

We would highly recommend the regulatory framework take a serious look at individual dispensaries before determining they be granted a “grandfathered” license to dispense cannabis for medical purposes, given that at least a portion of these seem to have a connection to organized crime. If the goal of the Federal government is to crowd out organized crime, it would seem that rewarding bad behavior with a grandfathered license to dispense defeats the purpose of C-45.

While enforcement of impaired driving laws are under provincial purview, we would like to reiterate our support for the 2-5 nanogram guidelines for driving under the influence of THC, but would add an additional comment.

Because THC acts differently inside the body – ie. It can be present long after any psychoactive effects have worn off – we suggest that what is inside the body isn’t as reliable as how the body actually behaves. Current tests for impairment exist, even as smartphone applications, which are non-invasive. These include tests for reaction time, simple cognitive exercises etc. It is early days as to the efficacy of these tests, but these should be explored as an alternative to the more invasive and potentially constitutionally problematic saliva or blood tests. In this particular case, it is possible the simple solution is in fact the better one. We encourage Health Canada to explore this avenue.

As an addendum, we strongly submit that 20 percent or more of the cultivation, processing and sales on Indigenous Peoples’ sovereign lands should be established without provincial interference. We would support provincial licensing inspection and audit but not determination of whether Indigenous Peoples can sell on their sovereign land.

To reiterate, our end game is a healthy, safe and educated public. Without this foundation, we cannot, as a society, reasonably enjoy the health, lifestyle and economic benefits of the proposed legislation. It is for this reason that our organization places an emphasis upon the need for Education & Awareness and stands ready to act as leaders on initiatives relating to these tenets. We wish to thank Health Canada for the opportunity to contribute as we work together toward a smooth transition to legalization. We will continue to do our part as responsible and good-acting corporate citizens, and would welcome the opportunity to continue this dialogue should you wish to reach out.