News Covid-19 Updates Industry Updates Legal Business Production
Health Canada policy change a step in right direction, experts say

Health Canada’s recent changes to its regulatory requirements will lighten some of the regulatory burden for licence holders in the cannabis sector, especially as companies continue to face the challenges brought on by COVID-19.

“I’m tremendously impressed with the way Health Canada has reduced the regulatory burden on licence holders,” said David Hyde, CEO of Hyde Advisory & Investments, a global cannabis advisory firm. “Overall, these changes provide licence holders with faster and more diverse pathways to revenue which is so crucial during the COVID-19 situation.”

On May 12, the federal department responsible for Canada’s cannabis industry regulations as well as the health policies to combat the COVID-19 pandemic sent an internal memo to the country’s licensed cannabis producers to announce a “reprioritization” of its resources. According to the memo, these regulatory changes come as a result of an audit of Health Canada’s review processes and the results from cannabis site inspections. With an “overall high rate of compliance,” Health Canada has decided to shift its resources to “high risk areas” and reduce regulatory burden for “low risk changes.”

Effective immediately, licensed producers (LPs) are no longer required to submit site plan changes – such as adding or changing new operations areas within an approved building that already appears on the LP’s licence – for review or approval by Health Canada.

The memo defines operation areas to include rooms dedicated to indoor growing, milling, drying, packaging, labelling, testing, etc. Outdoor grow areas do not apply to this amendment.

Only one new Notice of New Cannabis Products (NNCP) will now be required for dried or fresh cannabis, regardless of container size. However, the new notice must include all container sizes the licence holder intends to use for each product.

If a licence holder has already submitted their NNCP for a product that they sell to another licence holder, that notice will also apply to that product, rather than requiring a new notice, as was previously required.

With the cannabis sector facing numerous challenges amid the COVID-19 pandemic, Matt Maurer, vice-chair of the Cannabis Law Group at Torkin Manes LLP, said these regulatory changes would allow LPs to be more agile in applying proper health and safety initiatives for its workers.

“For example, if LPs want to utilize empty space within a licensed building to spread out existing operations to facilitate social distancing, it can now be done without having to receive Health Canada approval, which is a time consuming process in the best of times,” he said. “The change takes away a lot of delay and red tape that would have otherwise impeded the swift implementation of new changes that were prompted by the pandemic.”

Maurer commends Health Canada for its “cautious and deliberate” approach to relaxing its regulatory oversight and believes that as the department continues to see high rates of compliance, further relaxing is in store for the industry’s future.