Canada will allow some cannabis-infused products — edibles, beverages, topicals and extracts — to be sold in stores in December, according to the Associated Press. Health Canada issued regulatory details June 14, including packaging and labeling requirements. These will take effect Oct. 17, the CBC reported. Canada legalized recreational marijuana nationwide last October.
Health officials said companies wanting to sell products containing cannabis can apply starting July 15. These items will be evaluated for flavor, color, shape, smell and branding to make sure they aren’t designed to appeal to children. Proposed penalties for marketing such items to kids include five years in prison and $1 million Canadian dollars ($745,200) in fines, the CBC said.
Individually packaged products will be restricted to 10 milligrams of THC, the psychoactive substance in marijuana. Health officials said eating cannabis takes longer to have an effect than smoking it, and the feelings from consumption lasts a lot longer. Infused alcoholic beverages and cannabis products containing tobacco, nicotine or caffeine will not be allowed.
Although Big Food companies have been slow to move into the segment, things may speed up now that Canada is moving ahead with retail commerce and has timelines in place. Still, Bruce Linton, co-CEO of Canopy Growth, told Food Dive in February his company hadn’t heard from any large U.S. food manufacturers looking to do business — for example, in chewables and chocolates, where Canopy Growth has been developing infused products.
Canada could see major financial gains since its market for cannabis products is projected to be worth $2.7 billion annually, according to a Deloitte report the CBC cited earlier this month. Edibles could comprise more than half of that, the report said, and the total figure is in addition to the $6 billion Canadian domestic market for recreational and medical cannabis.
Manufacturers are likely finalizing applications for the items they want to sell and ramping up production. Some products are already here, such as Sproutly’s water-soluble cannabis extract, while others — potentially Coca-Cola beverages — may still be in the pipeline.
Several alcohol companies are involved in the space. Constellation Brands has invested $4 billion in cannabis company Canopy Growth, Diageo has talked with three Canadian cannabis producers about potential partnerships, and Molson Coors Canada has a joint venture going with HEXO, a Canadian medical cannabis firm. Since many of these would involve non-alcoholic infused drinks, they could be showing up at retail outlets in Canada by the end of this year.
The Associated Press reported Canadian cannabis license holders have to give 60 days notice to health officials that they intend to sell infused products, meaning the first day they can legally appear on shelves is Dec. 17. That timeline gives Health Canada a relatively small window within which to evaluate products and make sure they meet the new guidelines — and also make sure packaging is child proof.
Canada is way ahead of the U.S. in legalizing recreational marijuana and establishing corresponding regulations. The U.S. has a patchwork of 33 states and Washington, D.C., that allow medical or recreational use of cannabinoid compounds, while the Food and Drug Administration takes the position selling THC-infused food in interstate commerce is illegal. However, former FDA Commissioner Scott Gottlieb said in January the agency was looking at „potential regulatory pathways” to allow interstate commerce of cannabis compounds — including CBD, a non-psychoactive compound found in hemp — in foods and beverages.
The FDA held a 10-hour meeting May 31 to discuss the issue of CBD in products, and it revealed much confusion among retailers, manufacturers and consumers about how infused products will be regulated. Cultivation of hemp recently became legal in the United States through last year’s Farm Bill. There is speculation the rulemaking process could take the agency as much as two years, or three times as long as it took Canada. And these regulations only would be for products with a substance that is said to aid in relaxation and reduce inflammation, not one that produces a high.
Despite the slow pace of federal regulations, not all manufacturers are waiting on the sidelines when it comes to introducing these products in the U.S. In 2017, Heineken-owned Lagunitas Brewing debuted a non-psychoactive, cannabis-flavored IPA brewed with terpenes — organic compounds that give cannabis plants their flavors — and the company introduced a THC-based sparkling water last year.
U.S. manufacturers and regulators will undoubtedly be watching Canada’s retail edibles market during the next few months to see how things might turn out here. It’s likely some will use our neighbor to the north as a testing ground for infused products before they introduce or expand them in the U.S.
What isn’t likely is major food and beverage companies will sit by and watch lucrative partnerships take off in Canada without engaging in R&D that could bring the same level of success and profits in the United States.