Health Committee on Sept. 11th, 2017

[Sébastien St. Louis, Member of Board of Directors, Cannabis Canada Association]

I'll defer to our executive director, Colette Rivet.

[Colette Rivet, Executive Director, Cannabis Canada Association]

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.

Thank you.

[The Chair, Liberal, Bill Casey]

Thank you.

Now we'll start our questioning. We have a first round of seven minutes.

We are going to start with Mr. Ayoub.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Thank you, Mr. Chair.

Good afternoon, everyone. Thank you for being here.

I find that seven minutes is very little time in which to ask all the possible questions. So I will focus on a few aspects.

Among the witnesses we are hearing from today, we have a lot of expertise and social conscience. They also have different approaches.

I will start by asking Mr. Tesarowski some questions about the approach his province has adopted.

As we understand it, you are not overjoyed at the prospect; perhaps you are even a little reluctant. Other witnesses do not have that approach at all. On the contrary, they want to know what to do and they are finding out how to collaborate as much as possible so that we can pass the legislation and draft the laws that will ensure public safety to the extent possible.

I very much appreciated what you said at the outset, particularly about public education and awareness. You mentioned young people and the increase in the use of cannabis. I would like to know what you are doing, what you have done, and why you have waited until recently to consult with your citizens and then to get your administration involved in finding concrete solutions. The plan to legalize cannabis did not appear yesterday. It has been on the table, and the subject of study, for a number of years. Now there is a deadline, in July 2018. I feel that it was possible to get ready, at very least. Why was this not done earlier? What obstacles do you feel could prevent you from meeting the deadline of July 1, 2018?

[Dale Tesarowski]

Let me begin by saying I had a little trouble with the 10-minute limit I had to begin with so I appreciate your seven-minute concern.

It's hard to engage your people until you know what you're talking about, and until the different responsibilities were set out in the legislation in April, I don't think any province was in a position to move forward with any kind of public engagement.

Having said that, in my own province we've had some changes at the top in terms of our provincial leadership, and we were unable to proceed with any public consultation until given permission to do so. Over and above that we also had a by-election that was smack dab in the middle of all of that, and it wasn't until the day after the by-election that we were able to proceed publicly with our survey.

Having said that, we are doing our darndest to catch up. We have had a series of task groups and working groups working very diligently over the last number of months certainly predating the introduction of the legislation. But the list of what we have to do is just vast, and it's a mammoth undertaking. Our province isn't alone in the issues we have to address. Each province and territory is addressing the same issue, and we are doing our best to meet the deadline.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Thank you for your answer.

I hope that you will be able to achieve the goal that, basically, the other provinces seem to be able to achieve.

Mr. Lucas, Mr. St. Louis and Ms. Rivet, I would like to hear what you have to say about the sale of cannabis for medicinal or recreational purposes. Where should we go to find, to sell or to buy these medications?

First of all, there is the medical question. This is a medicinal drug in one sense, but it is something quite different when it is consumed recreationally. Would it be be a solution, in terms of brand image and quality, to be able to get it at two different places?

If I understood what Mr. Lucas said correctly, you want no tax on medical cannabis and probably a tax on what is not medical.

How do you see that? In your view, what would the solutions be? Would having two different programs be one of them?

[Philippe Lucas]

I think that is a part of the solution. Medical cannabis is already distributed online and there is no doubt that it will also end up being provided in pharmacies. It is very appropriate for it to be available in pharmacies. I am not necessarily talking about cannabis buds or flowers. Cannabis extracts in the form of capsules and oil are certainly appropriately placed in pharmacies, and the distributors could be given specific training in the use of medical cannabis. I have no doubt that it will end up being available in pharmacies, and we agree with that.

Certainly, recreational cannabis is going to divide the markets. There really has to be a source of information for adults who wish to buy it, other than at the point of purchase.

To give an example of one of the challenges faced right now, if we did a comparison with the beer industry, let's say we had a beer industry that only allowed white labelling of beer. The label would only say the alcohol level that would be in it. I would not presume to know what the members of this committee like to drink, but if you're someone who favours a smaller batch brewer or a higher quality beer, there would be absolutely zero incentive for that brewery to continue making high-quality product, because everything would become Old Milwaukee. The reason it would become Old Milwaukee is because there would be no reason for anyone to focus on quality if there were no way to differentiate the quality of one product from another.

I think it's very important that we realize that if we want to support smaller brewers, if we want to encourage quality products to be produced out there for Canadians, we need to be able to allow some limited branding to adults in order to encourage those distributors, those producers, to focus on a quality product. If it's purely white-labelled, people are going to be growing fields of very low-quality cannabis and that's all that's going to be available to Canadians in the coming months.

[The Chair, Liberal, Bill Casey]

Ms. Gladu.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Thank you, Chair; and thank you to all our witnesses who are here today.

Mr. Tesarowski, I agree with many of your comments about how rushed this legislation has been. I know Canadians knew that the federal government had this as a campaign promise, but I think they would have expected the federal government to say how it should be implemented and to fund it, so I took your comments there well. However, when I think about testimony we heard earlier today, I think it was Professor Ware who talked about how the expectation was that we were going to use the medical marijuana system because it's well quality-controlled and well distributed to implement this, so that would help address some of the timeliness. That doesn't seem to be true when we consider that Kathleen Wynne has just said she's going to create a cannabis council and an LCBO-type structure, which would be different again.

My problem with that is this: with the LCBO, I'm in a rural place, so 9 to 6 are the hours, and I can't see that competing with Hells Angels on price or availability. Mr. Tesarowski, could you and Ms. Rivet comment on that?

[Dale Tesarowski]

We haven't made any final decision on a retail model yet. That's one of the questions where we're seeking views from our citizens. Over and above that, though, it's not only our hours but availability in rural and northern communities. In a lot of those places, the only establishment in town is also the post office, the liquor store, the insurance seller, the drug store, the grocery store, as well the place you go to buy the parts for your car. It's a real challenge to be able to address that kind of market and still avoid the illegal market.

[Sébastien St. Louis]

On that, if I may, I think Cannabis Canada's primary goal in addressing you here today is to make ourselves available to solve some of these challenges. The group of licensed producers whom we at the table represent, the majority of the ones in the country, have served over 200,000 Canadian patients in the last four years. Those 200,000 Canadian patients have been served with zero diversion. They have been served in rural areas across the country. Some of the companies that comprise our membership offer a 24/7 support line to help those patients, and we are already proceeding to verification beyond what would be required under an adult-use model.

When we start with the adult-use model, we think address verification, diversion prevention, and age verification. We have those tools in place today. We have them to verify the prescription, for example, and the verification of the good standing of the doctor with his or her college in the respective province. Going to something such as age verification is something we can implement today, on day one. Where we're excited and continuing to engage with the various provinces, including, of course, Saskatchewan, is in seeing if we can provide that type of partnership. That will take a format depending on the will of the people in those provinces. We have the tools to implement on day one and we're looking forward to continuing that conversation.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Very good.

A question I have for Mr. Lucas has to do with possession limits. I think you said that, when it comes to people who are receiving medicinal marijuana, 78% of them are using less than three grams a day. Within Bill C-45 the limits for personal possession have been set at 30 grams, which would be 10 days of what I would consider fairly serious marijuana use. What do you think of those limits? Do you think those are reasonable for personal possession, or would you like to see those reduced?

[Philippe Lucas]

I think this is a fine starting point in the absence of available data on how much individuals might use. I think this would cover a few days of use for perhaps someone who is travelling and wanting access to product of a certain quality out of a certain outlet. I think 30 grams seems like a reasonable limit. I don't think we want to encourage people to be going into cannabis stores on a daily basis in order to pick up their product, any more than we would want people to pop into the beer store on a daily basis.

The evidence suggests that, when it comes to the recreational use of cannabis, it will be quite different patterns of use than with medical use. With medical, when we're talking about chronic pain and mental health conditions, these are chronic conditions and they usually end up seeing chronic use. In fact, with medical cannabis patients in the survey I just shared, 74% of patients use daily. With recreational use I would expect it to be more toward weekends, and in fact I would expect that use to be lower than what we're actually seeing right now with medical use. You can reduce use considerably by encouraging vaporisation and also the use of extracts, which are much longer lasting. Extracts and edibles would further reduce that use.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Excellent. I have one more question.

When it comes to the bill, and talking about being able to promote cannabis, I see a real difference among people who are engaged in the medical marijuana industry, which is growing globally. Tilray has moved into my community with a facility that exports to five countries. I would think that, with a product, you do need to promote and brand and be free to do that on your web page and in other countries. It looks quite restrictive in Bill C-45, that this would not be allowed for medical marijuana producers. I can understand why we don't want to encourage that recreationally to make it look sexy or wonderful for younger people, but could you comment on whether you think that's limiting?

[Philippe Lucas]

Sure. We are currently limited, as with all prescription drugs in Canada, in terms of our branding. In fact, that branding is much more restrictive than we see for alcohol and tobacco as it stands right now—no advertising. You won't see a magazine ad or otherwise promoting Tilray or any of the licensed producers in Canada.

We do feel that it's important, however, for patients to be able to make informed choices, and for us to be able to reach out with public-health-centred campaigns and provide information, particularly for the recreational users who might be coming into this system not knowing how to safely use products, whether it be the difference between smoking or vaporisation or edibles, and for us to be able to encourage people to stay away from smoking where possible. I think it's very important that we're able to get some of that messaging across.

I just want to share one concept that's very important for us to consider in this. We are talking a lot about reducing the harms of cannabis, which is absolutely appropriate, because that's one of the concerns as we move toward legalization. But as an academic researcher, if you're doing research on humans, you have a joint responsibility—and they're equal responsibilities in developing a new drug or introducing a new product—you have to reduce the harms to the end users, and you have to maximize the benefits.

I think this committee has the chance to do both: not only reduce the harms associated with cannabis as it's introduced and legalized and reduce the impacts of prohibition, of course, but also maximize the benefits of this adult access. I shared some of the benefits in the reduction of alcohol use that we've seen in the U.S. states as well, and also, of course, the reduction of opioid use.

[The Chair, Liberal, Bill Casey]

Thank you.

Go ahead, Mr. Davies.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you to all of the witnesses for being here and sharing your experience with us.

Madame Rivet, I'd like to start with you. You gave some very interesting testimony on the branding and advertising provisions of this bill, which are contained in clause 26. Would it be your view that the provisions as they stand now are too narrow?

[Sébastien St. Louis]

Mr. Chairman, I'll take that one.

We do need to learn more about the specific regulations that will be overlapped between provincial and federal. In terms of combatting the black market, it is critical, as my colleague raised previously, that the legal supply, licensed producers, and the legal distribution are able to differentiate from what's currently available in the black market. We often forget, and I would invite members of this committee to remind themselves, that even walking here through Ottawa we see multiple illegal storefronts with fully branded products—vapable, edible, and basically however you want to take your illegal cannabis. You can walk in the door of any one of these stores and you can currently purchase that, and it's completely uncontrolled.

I think where this committee needs to spend a bit of time is balancing that demand to combat the black market, while allowing safe, responsible advertising from the licensed producers who have been trusted partners under the medical regime.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you for that, I think you've expressed the problem with the issue well. I've been told from many producers that, as you've said, we need product differentiation, enough information, not only to distinguish the product from the illegal market, but from within the legal market where there will be different products that will be produced by different producers with different characteristics. Then there's the need for sufficient information on the packaging so that the customer actually knows what it is they're taking and knows what it's for, and finally, as you said, to compete effectively with the illicit market where there will be no rules whatsoever on how they brand.

I'm going to turn to Mr. Lucas.

Do you have any feelings on that? I'm looking specifically for your views on what is currently in Bill C-45, contained in section 26, because it is a very narrow set of restrictions on the labelling and advertising right now. Again, I'd like your advice on whether you think it's too narrow.

[Philippe Lucas]

I worry that it might be, and once again it's with the idea of maximizing the benefits of the step that we're taking here in Canada. I understand the cautionary approach, we're the first western nation to be moving towards this, but the evidence that we have out of the U.S., the evidence that we have out of other jurisdictions including Portugal that have decriminalized, evidence out of Holland that's had coffee shops for a long time, is that we keep considering this as an add-on to alcohol and tobacco and we're using a similar lens: should we regulate like alcohol and tobacco? I need to remind committee members that this is not either.

If we look at any of the research, not one side of the research versus another, any of the research that's looked at the public health impacts in terms of health care utility, public safety impacts, cannabis compared to alcohol or tobacco, let alone the illicit substances, shows it to be a much, much safer substance. That doesn't mean we should be championing its use. It does mean that we shouldn't be disadvantaging it when it comes to access compared to alcohol or tobacco.

We think that Ontario has taken some interesting first steps to start getting cannabis and be ready for July 2018, but we're talking about 60 shops perhaps at the onset. There are over 600 outlets in Ontario where you can purchase alcohol. I'm obviously not counting every restaurant and bar also, which would put it in the tens of thousands—

[Don Davies, NDP, Vancouver Kingsway, BC]

I don't want to get on distribution yet, I want to stay on branding and labelling.

You raised the issue of whether this should be regulated more like tobacco, or alcohol, or maybe neither. Some have advised me that they think cannabis should be regulated in terms of advertising and labelling more like alcohol because tobacco is a uniform substance whereas cannabis, like wine for instance, has different characteristics. The CBD and the THC levels, particularly combined with toluenes make it almost.... There's a panoply of different effects and types and this is important information both for customers to differentiate and to compete with the illicit market.

I am reminded that this legislation says that you can't set out a depiction of a person, character, or animal, whether real or fictional. I'm thinking, you walk into a liquor store and you can have the Wayne Gretzky winery, and I'm thinking of the way people differentiate between wines, which is also a product that you keep away from children. There are a lot of restrictions around what can be said on it, and I'm wondering if that's a more appropriate analogy for us than a plain package of tobacco.

[Philippe Lucas]

I think that you're absolutely right. What we're supportive of are bans on lifestyle branding. We don't want to celebrate cannabis use. We don't want to see anyone being depicted taking any risks, doing anything overly athletic, etc., so that kind of lifestyle branding we would not support at all. But we think that where only adults can congregate such as the equivalent of liquor outlets, the equivalent of bars or consumption sites, we feel that there should be some ability to be able to speak to those adults, to be able to share messaging on different products and product effects, and that can be done through brands as well.

[Don Davies, NDP, Vancouver Kingsway, BC]

I want to turn a bit to products. I'm a little confused. In the medicinal cannabis world right now, are patients using non-smokable products in any way? Are they using creams, patches, sublingual tablets, oral sprays, capsules? Is that common, and if so to what extent?

[Philippe Lucas]

Yes, about 50% of patients out there in Canada right now are using primarily non-smoke methods of ingestion. About 31% use vaporizers. That's the most common form of use right now. That's closely followed though by edibles, which make up just under 20%. I don't want you to picture cookies or anything; edibles are drops, extracts, oral ingestion—

[Don Davies, NDP, Vancouver Kingsway, BC]

Is there a danger of having two different, parallel systems here? Under Bill C-45, in the recreational world, none of those are legal.