Canadian Edibles Get a Green Light, Licensed Producers Rejoice

Seven months before the Cannabis Act was even introduced, executives of Organigram, a licensed cannabis producer based in New Brunswick, were so confident edibles would soon be introduced to the Canadian market that they signed a product development and distribution deal with an American company that has a line of cannabis oil extracts and edibles. The gamble paid off.

If approved, the amendment will ensure cannabis edibles and concentrates will be introduced to the Canadian market no later than 12 months after legalization.

The House Standing Committee on Health, which studies issues related to Health Canada, including bills and regulations, recently voted for an amendment to the Cannabis Act that, if approved by the House of Commons, will ensure cannabis edibles and concentrates will be introduced to the Canadian market no later than 12 months after recreational cannabis becomes legal next summer.

Ginette Petitpas Taylor, the federal health minister, said that timeline would be adhered to, so long as rules surrounding packaging, potency and health warnings were put into place within 12 months after legalization.

Licensed producers have joined the chorus of cannabis advocates applauding the move; it would be a boon to Canada’s cannabis industry. In Colorado, Washington and Oregon, U.S. states in which concentrates and edibles are legal for recreational use, they accounted for more than third of overall cannabis sales in the first quarter of 2016.

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The standing committee, which has heard from more than a hundred witnesses since it began studying the bill in August, approved the amendment after several witnesses told members that the move was necessary to address consumer demand for such products, to provide a healthy alternative to smoking cannabis and to help eradicate the black market—a stated goal of Prime Minister Justin Trudeau’s government.

“We heard from Public Health that limiting legalized cannabis to dried forms would encourage smoking, and there are significant public health consequences associated with smoking cannabis,” Committee member John Oliver, an MP in the governing Liberal Party, said when presenting the amendments. “We also heard from many consumer groups and users that they felt that having edibles was an important piece of them being able to properly utilize the drug.”

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“We knew through discussions with government officials that they were open to adding edibles and concentrates to the list of cannabis products that could be sold legally,” Organigram CEO Greg Engel told Leafly, explaining his company’s decision to enter into an agreement with TGS International, an affiliate of a Colorado-based cannabis company called the Green Solution, last year. “It was just a matter of timing.”

“Limiting legalized cannabis to dried forms would encourage smoking, and there are significant public health consequences associated with smoking cannabis.”
MP John Oliver

“These products are a huge part of the market in places where cannabis is legal for recreational use,” said Engel. “You can’t displace the black market until you make these products legal. The provinces have been learning more about the cannabis industry in the past year and they are looking forward to edibles and concentrates being on the market too, because they see how relevant these products are.”

The deal Organigram signed with TGS last year ensures the Canadian company gets exclusive licensing of more than 225 cannabis products in this country and consulting services related to an extraction facility. The company plans to build up that facility on recently acquired land “at the appropriate time.”

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Engel says Organigram would be able to introduce edibles and concentrates to the market within months of the government making them legal for recreational use. He adds that the company is now considering which products to introduce. “We know that pens and prefilled cartridges are [big sellers] in this category and that brownies and cookies are also popular. We could offer a broad range of these products,” he says, adding that beverages would be introduced “later down the road.”

Executives at Ontario-based MedReleaf, another licensed producer, are equally enthusiastic “I think the introduction of this amendment is fantastic. Legalization is driven by the desire to get rid of black market — and that market has a full product selection of edibles and concentrates,” Darren Karasiuk, the company’s vice president of strategy, told Leafly. “To compete with the black market and to achieve policy goals, you need to offer consumers what they want and could get on the black market. It’s an incredibly important step.”

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“We’re going to explore the landscape and make plans as the regulatory environment evolves,” Karasiuk said when asked about his company’s plans regarding edibles and concentrates. “We will look at all opportunities.”

The House of Commons will vote on the amendment during the third reading of the Cannabis Act, after which the proposed legislation goes to the Senate for final approval.