Edibles legalization fuzzy

Photo: The Canadian Press

From the classic pot brownie to cannabis-infused cotton candy, there is no shortage of options for edibles at an illicit dispensary in downtown Toronto.

Among the people lining up to browse and buy, one 34-year-old IT worker chooses gummy bears for what he says is his first-ever edibles purchase. The Toronto man, who did not want to be named, said he preferred edibles over smoking cannabis because he can avoid the pungent smell and partake indoors.

"These are more convenient," he said, adding that among his friends who are cannabis users, half of them say edibles are their form of choice even though they aren't legal in Canada yet.

Cannabis companies, as well as food and beverage makers, are looking to tap this expected demand as they gear up to roll out their own pot-infused edibles when the next wave of the green rush is legalized later this year.

Canadians can legally purchase cannabis-infused goods and vapes once the government rolls out the final edible pot regulations, which Ottawa has said must be brought into force no later than Oct. 17, 2019.

However, like the rush towards the initial wave of legalization on Oct. 17 of last year, the process is fraught with obstacles and the parameters are unclear.

From obtaining specialized research licenses to potentially building new and separate manufacturing facilities and developing new products to comply with yet-to-be-finalized rules — there are numerous hoops to jump through before edibles can grace store shelves.

"It's a challenge," said Jeffrey Zietlow, vice-president of innovation at licensed producer CannTrust Holdings Inc. "Everyone is running for the October deadline, and we're trying to develop multiple products at the same time…. The more certainty you have, the easier it is to innovate products."

Health Canada published its proposed edible pot regulations in December and wrapped up its public consultation period on Feb. 20. The federal health agency is now reviewing the responses before finalizing the regulations.

Meanwhile, a flurry of companies from various sectors including cannabis, alcohol and consumer-packaged goods sectors have announced imminent plans for edibles.

Edibles spending was estimated at US$1 billion in the U.S. and Canada in 2017 and is forecast to grow to more than US$4.1 billion by 2022, according to a recent report from BDS Analytics.

Cannabinoid-infused products that will be legalized under the new regulations include inhalable extracts as well as solids, beverages and topicals, like lotions.

The latter forms are appealing to those who are not interested in inhaling products into their lungs, Zietlow said.

"Cannabis 2.0, the edibles category, you're now providing consumers products in form factors that they're used to consuming all the time and that they enjoy," he said. "And that makes it a lot easier for people to try a cannabis-based product."

While companies are full-steam ahead on development, many do not have the ability to have people try the products they are creating to see if they taste, and perhaps more importantly, feel good.

Under the previous licensing system enforced prior to Canada legalizing recreational cannabis on Oct. 17, companies conducted various forms of cannabis research under what was called a "dealers' licence."

With the new cannabis regulations, holders of a processor licence can engage in many of those same research and development activities, except administering cannabis to a test subject, Health Canada says. That requires a specific research licence for each specific project, said Health Canada spokeswoman Tammy Jarbeau.

As of March 11, 36 research licences have been issued under the Cannabis regulations and another 122 applications are at various stages of the review process, though not all of them are specific to palatability testing.

While Health Canada aims to process research licences within two to four months, application processing times vary and depend on a number of factors such as the complexity and completeness of the application.

Another complicating factor is manufacturing, as the proposed regulations require companies who are already making non-cannabis infused goods to establish a separate manufacturing facility for edibles.