Thank you, Mr. Chair, for inviting Cannabis Canada. We really appreciate the opportunity to share some of our perspectives as well.
I'll tell you a little bit about our association. We have over 20 members who are licensed producers, and they have been licensed by Health Canada. We have a patient committee that tries to help give feedback to our members. We also have a committee on regulations, which interacts with the office of medical cannabis on a regular basis to try to improve the regulations even more so we have more quality products. We also have a communications standards committee. We are just about to continue discussions with the secretariat. Hopefully we'll be able to assist them as well.
Since 2013, Canada's licensed producers, large and small, have been effective partners in the establishment of this strict, well-regulated system for the production and distribution of medical cannabis that is the envy of the world. It's for this reason that the Government of Canada is entrusting Canada's licensed producers to be the foundation of the production system for legalized, adult-use cannabis.
Licensed producers are eager to work in collaboration and compliance with the federal and provincial governments to quickly establish effective, low-risk distribution and retail models that are well regulated, highly secure, and tailored to the needs of each province. Bill C-45 must include measures that will allow the legal industry to compete with the black market, notably in relation to price, branding, and advertising, within well-regulated parameters to help eliminate confusion in the marketplace about legitimate sources and to guide Canadians in their use of a new and complex product. The medical cannabis system must also be protected for the benefit of Canadian patients.
Since 2013, as I said, we have been involved as trusted partners of the government, and we want to continue to do that with the provincial governments as well as the federal government. Licensed producers have proven that they can deliver state-of-the-art, sanitary, secure, and professionally operated production facilities; products packaged and labelled to protect children and to ensure that adults have information to make informed choices; a proven distribution and retail system that ensures that products reach their intended recipients with no diversion to the illegal market; and production and retail without impacts on the surrounding communities or collocation with alcohol.
Eliminating the black market is one of the government's main objectives in legalization. There are a number of factors that will impede the ability of the new legalized system to compete with the firmly entrenched black market. Governments need to be mindful not to impose pricing or taxes that will make it impossible for licensed producers to compete with the black market. The parliamentary budget officer of Canada pointed out in his November 2016 report that “The higher the premium for legal cannabis over the illicit price, the more Canadians will purchase cannabis on the illicit market”. Using the same research, the C.D. Howe Institute estimates that even a relatively modest dollar premium per gram would result in about 35% of the market remaining unregulated.
There's also the question of branding and advertising. Licensed producers need to be able to differentiate from and compete with the black market. Indeed, if governments are serious about undermining the black market and want to do it as quickly as possible, they need to ensure that legal businesses have the opportunity to distinguish their products from the illegal.
Moreover, consumers need information from a knowledgeable and experienced source about an unfamiliar product to help them have a safe and consistent experience. There are a wide variety of cannabis strains, with different potencies and effects, depending on their THC and CBD levels. The THC is the hallucinogenic part. You can have it very, very low, as we mentioned before, at .01 or .05. It also could be mainly CBD. There are characteristics such the odour and product form. For instance, now we not only have the dried flower, we vapourize it. We also have oil, and we have capsules. We're trying to find different product forms to help people ingest the product in a different format than smoking. It is important that the legal industry be able to properly communicate the features of each one to inform both consumer choice and safe and responsible use to reduce potential harm.
You'll also be aware that there's ample confusion in the marketplace about the legality of different sources of cannabis.
Canadians need to be able to easily distinguish between what is a legal product and what is not. They need to know where, how, and from whom to get legal, safe cannabis. Branding and advertising within agreed-upon parameters—for example, no targeting of children or youth—provide consumers with the signposting that they need to distinguish legitimate products and sources. This way, adult Canadians can better understand where they can safely purchase the highest quality product.
It would be unfortunate if Canadians continue to be exposed to messaging from illegal sources and silence from legal businesses. Without the ability to brand and advertise, the burgeoning legal industry will be handicapped in its efforts to dislodge the well-entrenched black market. Cannabis Canada Association hopes that the health committee will champion the need for responsible and strictly regulated branding and advertising of cannabis to adults.
Finally, given our mandate and commitment to Canadian patients, we would ask that the committee also lend its support to the preservation of the current medical cannabis system. With the advent of legalization, policy-makers need to ensure continued proper access for patients. As ruled by Canadian courts, without a medical system, Canadian patients may lose insurance coverage, public or private, making their prescribed medication inaccessible.
Important distinctions between medical and non-medical use of cannabis include the following: medical use continues to be overseen and prescribed by health care professionals; health care insurance plans can continue to include medical cannabis in coverage; patients, including young patients, have access to the strain, potency, and amount that manages their symptoms as per their physician's prescriptions; patients can access their medication in specified public places in all non-smoked forms including vaping; and medical cannabis is affordable, zero-rated for taxation, and accepted by drug formularies and public and private insurance.
In conclusion, Bill C-45 seeks to prevent young persons from accessing cannabis, to protect public health and public safety by establishing strict product safety and product quality requirements, and to deter criminal activity by imposing serious criminal penalties for those operating outside the legal framework. Cannabis Canada fully supports these objectives. Cannabis Canada has unparalleled expertise and practical experience in how to distribute safe, quality-controlled cannabis and ensure that only those who are eligible to access it do access it.
In the interest of advancing the government's objectives and dislodging the well-entrenched black market as rapidly as possible, Cannabis Canada Association respectfully recommends that Bill C-45 take into account the need to ensure that the legal industry is in a position to compete with the black market in terms of price; that a certain amount of branding and advertising within strictly regulated parameters is allowed, both in terms of the need to differentiate legal products and sellers from black market products and sellers and to guide Canadians in their use of a new and unfamiliar product; and that the current medical cannabis system is preserved, or, at least, the necessary protections for patients are put in place, including the right to vape their medication.
We want to continue to assist the governments, both federally and provincially, and continue to protect the public safety and our patients. We are committed to helping the government for the distribution or for the regulations, etc., and we will continue to work very hard alongside you. We do not want to lose your trust.