Over the past eight months, we have watched the legalization of cannabis contribute positively to the Canadian economy and the growth of businesses across the country. Canada has embraced this timely opportunity to drive innovation and create jobs throughout the cannabis sphere; in new research projects, in novel production and processing systems, and in the development of unique products, it is clear that Canadian academic and industry leaders alike are eager to step up and lead the world in this space. However, Canada’s regulatory framework for legal cannabis is failing to keep pace with the rate of change in this budding industry.
From movie stars and sports celebrities to seniors and wellness practitioners, there is an undeniable interest in access to health products containing cannabidiol (CBD). CBD is a compound in cannabis that does not get you “high”, is recognized to be safe, and is associated with a number of therapeutic benefits.
In Canada alone, Forbes estimates the CBD market to generate $1 billion a year by 2023 – representing nearly 20% of Canada’s entire cannabis market. Canadians clearly want to use CBD to support their health and the Canadian industry wants to create safe products for this market. As the first G7 nation to legalize cannabis, Canada is uniquely positioned to satisfy the growing global demand for CBD health products. However, Health Canada’s current regulatory approach classifies CBD as a prescription drug, restricting its availability, limiting product innovation and discouraging Canadian companies from participating in the growing market for CBD in Canada and abroad.
Consumer interest and preference for CBD products used for health and wellness highlights a major gap in the current regulatory regime. Under the Cannabis Regulations, there is little room for CBD health products falling outside the scope of the recreational market. When the Government developed legislation to permit the sale of cannabis for recreational use, they overlooked the growing market for cannabis products used for health and wellness – specifically CBD products.
As of October 2018, there are two pathways Canadians can use to legally access CBD: from a government-authorized recreational store or through medical access with a doctor’s note. Given CBD’s favourable safety profile, many assumed the Government’s approach to cannabis would include a third pathway to access CBD: as a natural health product (NHP) under the Natural Health Product Regulations. In low doses, and when used by individuals to support their health, the rationale for classifying CBD as a recreational product or a prescription drug is groundless.
In Canada, regulations for NHPs require all products to be approved by Health Canada before they are allowed to be legally sold. NHP regulations outline requirements for safety, efficacy, quality, labelling, post-market monitoring and reporting of adverse events. Unlike recreational CBD products, NHPs are labelled with important information, such as dosage, warnings, contra-indications, and known adverse reactions. Canada’s regulatory regime for NHPs is one of the most stringent in the world. In contrast to recreational CBD products on the market, CBD-containing NHPs would allow Canadians to make an informed decision on what CBD products to choose and how to use them to support their health.
While consumer demand for CBD health products persists, so does an unregulated market for these products. With an extremely limited supply of recreational CBD products across the nation, and in the absence of the want or need to obtain a doctor’s note, Canadians are choosing to purchase unregulated CBD products in stores and online. Unregulated products carry a multitude of risks of their own, stemming from a lack of testing for the safety and quality of the product. Allowing Canadian NHP businesses to satisfy the market demand for CBD health products with safe and regulated NHPs containing CBD would protect consumers from the illegal market while capitalizing on an opportunity for economic growth and job creation in communities across Canada.
Health Canada needs to revisit their approach to CBD, and permit it as an ingredient in safe and high-quality NHPs regulated under the Natural Health Product Regulations. With regulations permitting the sale of CBD through NHPs, the CBD market could grow to nearly 30% of the total cannabis market and reach $1.5-2 billion a year by 2023. This growth will support the Canadian economy, bolster export potential, attract research investments, and support the creation of thousands of new jobs in the health and wellness industry.
Canada has a timely opportunity to set an example with a strong legislative framework that protects the health and safety of consumers while enabling innovation and economic growth, and the window of opportunity for Canada to lead the global CBD industry will soon expire. It’s time for the Federal Government to acknowledge the continuing demand for health products containing CBD, and introduce smart regulation of CBD that will support innovation, economic growth, export potential, and job creation across the country.
Daniel Demers serves as the Vice President of Government Relations and Regulatory Affairs for the Canadian Health Food Association. Over the past 25 years, he has worked closely with leaders in government and business, specializing in government relations and advocacy, public policy, as well as health and innovation.