The Countdown is On: Health Canada Releases First Look at Product Packaging, Labelling Requirements

Article by Christelle Gedeon and Barbara Miller Fasken Toronto

As the countdown to the legalization of recreational cannabis in Canada begins, provinces and would-be producers alike have been busy speculating on the potential product packaging and labelling parameters under the proposed Cannabis Act regulations. On Monday, March 19, 2018, Health Canada answered this speculation with a plethora of product labelling requirements as part of its report summarizing the results of the consultation process. Health Canada’s stated purpose for releasing this report was to help producers, provinces, territories and others prepare for the coming into force of the Cannabis Act. At the moment, most if not all existing holders of medical cannabis production licences have already established their marketing and branding strategies for the recreational cannabis market. The information summarized in this report may, at the very least, require some adjustment to branding strategies and, in the worst of cases, require new marketing or branding strategies altogether.

Overall, the report affirms Health Canada's proposed regulatory framework, namely in respect of the following elements:

1. Licenses and permits

Respondents expressed support for the proposed licensing system and the corresponding regulatory requirements for each category of license, including micro-cultivation and micro-processing licenses to help facilitate the participation of small-scale producers in the cannabis industry.

2. Continued access to cannabis for medical purposes

Respondents supported the preservation of a distinct system (under the Access to Cannabis for Medical Purposes Regulations) that would continue to enable individuals who have the support of their healthcare practitioner to access cannabis for medical purposes.

3. Security clearance requirements

45% of respondents agreed with the proposed security clearance requirements, while 35% disagreed and were split as to whether the proposal was either too burdensome for the industry or too relaxed. However, a strong majority of respondents agreed that individuals with histories of non-violent, lower-risk criminal activity should be able to obtain security clearance and participate in the legal cannabis industry, something Health Canada has stated it will consider in preparing the draft regulations.

4. Cannabis product regulations

A strong majority of respondents were supportive of the government's proposal not to restrict the type of product forms that the cannabis industry would be able to manufacture and sell within permitted product classes, including dried cannabis, cannabis oil, and cannabis plants and seeds. Many respondents also urged the government to permit the sale of a range of product forms, including cannabis edibles and concentrates, immediately upon the Cannabis Act coming into force, citing the need for the legal cannabis industry to be able to offer the same diversity of products as are currently available through the illegal market. Nevertheless, the Health Canada report stated that necessary regulations addressing edibles and other cannabis concentrates will be put in place within one year following the coming into force of the Cannabis Act in order to allow time for the development of specific regulations to address the unique risks posed by these product classes.

5. Product packaging and labelling requirements

What is most striking about Health Canada’s summary is the government's response to industry stakeholders, who were nearly unanimous in stating that, in order to prepare products that are compliant with the packaging and labelling rules in time for the coming into force of the legislation, they would need certainty as soon as possible as to what the regulations would require.

Among other labeling and packaging recommendations, Health Canada has set out the following requirements for the product branding elements:

only one other brand element (in addition to the brand name) may be displayed. This element could include, for example, a slogan or logo. If it is a text element, the font must be no larger than the font of the health warning message, and must be a single, uniform colour. If the brand element is a graphic, image or logo, it must be no larger than the standardized cannabis symbol;
it will be prohibited to display any other image or graphic;
label and package backgrounds must be a single, uniform colour (inside and outside);
it will be prohibited to use any fluorescent or metallic colours;
colours must contrast with the colours of the standardized cannabis symbol and the background of the health warning messages;
labels and packaging may not have any coating (e.g. may not be glossy), embossing (raised or recessed relief images), texture, foil, cut-outs or peel‑away labels;
any over-wrap must be clear; and
it will be prohibited to include any insert in a package.

Moreover, the federal government has furthered its public health-driven approach by setting standards regarding placement of information, health warning messages, the introduction of a standardized cannabis symbol, and detailed labelling requirements for fresh cannabis, dried cannabis and cannabis oils.

Nearly half of the report is directed towards the branding and labelling of recreational cannabis products. This is likely a welcome relief to provincial retailers, who until now were unsure of which products they would be permitted to stock. For current holders of medical cannabis production licenses, the additional requirements may be somewhat of a proverbial "wet blanket", in that they seem to remove any leeway for attractive packaging, and incorporate the labelling requirements imposed on both tobacco products and medical cannabis all at once. Given the number of producers who have already initiated their recreational branding strategies hoping to cash in on goodwill once recreational cannabis is legal, it will be interesting to observe the extent to which Health Canada’s summary will cause a rush to rebrand before the Cannabis Act comes into force.