Canada’s Competition Bureau Recommends Increasing THC Limits For Edibles

As reported by CBC, in an effort to bolster the burgeoning Canadian cannabis sector and diminish the impact of the illicit market, the country's competition watchdog has suggested that the federal government review and potentially relax the stringent requirements for cannabis packaging and increase the permissible levels of psychoactive components in edible products, all the while ensuring public safety.

The Competition Bureau recently presented these key suggestions to Health Canada in a publicly released report.

The report comes at a crucial time, as Health Canada is in the process of revising the Cannabis Act, the legislative framework which has regulated the legal cannabis market in Canada since 2018. Updated changes are anticipated in the coming year, and the Competition Bureau was entrusted with providing suggestions for the industry's improvement.

Since its highly publicized and valued introduction, the cannabis industry has had a challenging journey, marked by issues in production, management, marketing, and demand.

Despite having more than a thousand licensed companies in Canada currently authorized to produce or sell cannabis, several have faltered and only a handful have managed to turn a profit. In the meantime, the illicit market has found a way to meet customer demands which are not being fulfilled by the legal industry due to restrictive regulations.

To address these issues and stimulate the industry, the bureau has proposed three primary recommendations:

• First, it suggests that Health Canada reconsider the quantity of tetrahydrocannabinol (THC) – the psychoactive element in cannabis – allowed in an edible cannabis serving. Under current rules, the limit is set at 10 milligrams per serving, but many illicit market products offer significantly stronger concentrations.
• The bureau's second proposal is to relax restrictions on cannabis advertising, packaging, and labeling to let legal sellers more effectively educate consumers about product distinctions. The existing rules mandate that cannabis products be sold in primarily generic packaging, even limiting the color palette in some instances.
• The bureau's third and final suggestion is to reassess the licensing process and related regulatory compliance expenses to ensure minimal impact on competition.

Niel Marotta, CEO of Indiva, a London, Ontario-based cannabis company, expressed his full agreement with the recommendations. He emphasized the importance of potency limit revision, citing the current limit as a significant factor driving consumers towards the illicit market.

The industry has generally welcomed these recommendations, although it's understood that the final revisions implemented by the government may not fully align with the industry's aspirations, given the necessity to strike a balance between encouraging existing users to switch to the legal market and discouraging new consumers from starting.