Canadian Weed Companies Ordered To Stop Selling Certain Cannabis Extracts, Could Cost Them Millions

Canadian cannabis companies have been required to stop selling certain ingestible cannabis products, which could cost the industry millions. 

What Happened

Health Canada, the Canadian federal agency for Public Health, deemed that certain products sold by some cannabis companies have been incorrectly labeled as extracts rather than edibles, reported MJBizDaily.

A letter signed by Anika Stella Chasse, acting director general of the Compliance Directorate in Health Canada’s Controlled Substances and Cannabis Branch, calls on Canadian cannabis companies to stop selling all of these products. However, the letter does not order them to remove the products from shelves.

“Upon further review of the products in question, Health Canada has assessed that this product is edible cannabis and, consequently, it contains a quantity of THC that exceeds the allowable limit of 10 mg per immediate container," according to the letter, which stresses the definition of extract, edible and food.

“Health Canada has determined that (the products in question) are consumed in the same manner as food, and therefore fit the definition of edible cannabis."

Shane Morris, who worked for Aurora Cannabis Inc. ACB and Hexo Corp. HEXO and founded Ottawa-based Morris & Associates Consulting commented: “For all ‘cannabis extracts.’ the THC quantity must not exceed 1,000 milligrams per immediate container. This is 100 times more THC per pack than what is permitted in an ‘edible’ class of cannabis product.”

What Licensed Cannabis Producers Need To Know

Licensed cannabis producers are being told to notify Health Canada months in advance of new products, and then follow the government's Notice of New Cannabis Product (NNCP) process. However, there is no guarantee the products will be approved.

The process is intended to provide companies with an opportunity to address compliance issues.

Morris estimates that in December 2022, the Ontario Cannabis Store sold roughly 942,000 Canadian dollars ($600,000) of these questionable extracts. 

“Assuming Ontario sells approx. 40% all cannabis in Canada, then on an annual basis this would mean the retail value of these products would be approximately CA$33.9 million per annum in the recreational market, not inducing medical or Quebec where these new products are not sold,” said Morris.

MJBizDaily noted that if Health Canada orders the withdrawal of these products from the Canadian market, the industry could lose tens of millions of dollars in sales per year.

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Photo: Courtesy Of Hermes Rivera On Unsplash