ARCHIVED — Vol. 148, No. 7 — March 26, 2014

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Registration

SOR/2014-51 March 7, 2014

CONTROLLED DRUGS AND SUBSTANCES ACT

Regulations Amending Certain Regulations Relating to Marihuana for Medical Purposes

P.C. 2014-249 March 6, 2014

His Excellency the Governor General in Council, on the recommendation of the Minister of Health, pursuant to subsection 55(1) of the Controlled Drugs and Substances Act (see footnote a), makes the annexed Regulations Amending Certain Regulations Relating to Marihuana for Medical Purposes.

REGULATIONS AMENDING CERTAIN REGULATIONS RELATING TO MARIHUANA FOR MEDICAL PURPOSES

NARCOTIC CONTROL REGULATIONS

1. Subsection 31(4) of the Narcotic Control Regulations (see footnote 1) is replaced by the following:

(4) If authorized by the person in charge of the hospital, a pharmacist practising in a hospital may sell, provide or return dried marihuana in accordance with subsection 65(2.1) or (3.1) or section 65.3.

2. Subsection 65(1) of the Regulations is replaced by the following:

65. (1) No person in charge of a hospital shall permit a narcotic to be sold, provided or administered except in accordance with this section or section 65.3.

3. The portion of subsection 65.1(1) of the English version of the Regulations before paragraph (a) is replaced by the following:

65.1 (1) The person in charge of a hospital who permits dried marihuana to be sold or provided under subsection 65(2.1) to an out-patient or an individual responsible for that patient shall ensure that

MARIHUANA MEDICAL ACCESS REGULATIONS

4. Sections 65 and 66 of the Marihuana Medical Access Regulations (see footnote 2) are repealed.

MARIHUANA FOR MEDICAL PURPOSES REGULATIONS

5. Subsection 1(1) of the Marihuana for Medical Purposes Regulations (see footnote 3) is amended by adding the following in alphabetical order:

“pest control product”
« produit antiparasitaire »

“pest control product” has the same meaning as in subsection 2(1) of the Pest Control Products Act.

6. Subsection 6(2) of the Regulations is replaced by the following:

Definition of “additive”

(2) For the purpose of paragraph (1)(a), “additive” means anything other than dried marihuana but does not include any residue of a pest control product or its components or derivatives unless the amount of the residue exceeds any maximum residue limit specified for the product, component or derivative under section 9 or 10 of the Pest Control Products Act.

7. Section 54 of the Regulations is replaced by the following:

Pest control product

54. Marihuana must not be treated — before, during or after the drying process — with a pest control product unless the product is registered for use on marihuana under the Pest Control Products Act or is otherwise authorized for use under that Act.

8. (1) Paragraph 66(a) of the Regulations is replaced by the following:

  • (a) the name of that licensed producer and a telephone number and email address that can be used to contact them;

(2) Paragraph 66(d) of the English version of the Regulations is replaced by the following:

  • (d) the symbol “N” set out in the upper left quarter of the label in a colour contrasting with the rest of the label or in type not less than half the size of any other letters used on the label;

9. Subparagraph 92(b)(iv) of the French version of the Regulations is replaced by the following:

  • (iv) est ou a été associé à une personne physique qui est connue pour sa participation ou sa contribution — ou à l’égard de laquelle il y a des motifs raisonnables de soupçonner sa participation ou sa contribution — à des activités visées au sous-alinéa (i), ou est membre d’une organisation visée à l’un des sous-alinéas (ii) ou (iii);

10. The Regulations are amended by adding the following after section 259:

Destruction and Notice Obligations — Marihuana Obtained or Produced Under the Marihuana Medical Access Regulations

Applicable period

259.1 Sections 259.2 and 259.3 apply until September 30, 2014.

Obligation to destroy

259.2 (1) When an authorization to possess expires without being renewed or is revoked, the person who held the authorization must immediately destroy any marihuana that they are no longer authorized to possess as a result of the expiry or revocation.

Production licences

(2) When a personal-use production licence or a designated-person production licence expires without being renewed or is revoked, the person who held the licence must immediately

  • (a) discontinue production of marihuana that was authorized under the licence; and
  • (b) subject to subsection (3), destroy any marihuana that they are no longer authorized to possess as a result of the expiry or revocation.

Exception — designated-person production licence

(3) If a designated-person production licence expires without being renewed but the authorization to possess on the basis of which the licence was issued remains valid, the person who held the licence may, before destroying marihuana, immediately transport, transfer, give or deliver, directly to the holder of the authorization, not more than a quantity of dried marihuana that results in the holder of the authorization being in possession of the maximum quantity permitted under the authorization.

Exception — March 31, 2014

(4) Despite subsections (1) to (3), when an authorization to possess, a personal-use production licence or a designated-person production licence expires on March 31, 2014, the holder of the authorization or licence must, by the end of that day,

  • (a) destroy any marihuana that they are not authorized to possess or produce, as the case may be, under these Regulations; and
  • (b) in the case of a licence, discontinue production of marihuana that was authorized under the licence.

Application of subsection (4)

(5) For greater certainty, for the purposes of subsection (4), every authorization or licence that is valid on March 31, 2014 expires on that day.

Obligation to send notice

259.3 (1) When an authorization to possess, a personal-use production licence or a designated-person production licence expires without being renewed or is revoked, the person who held the authorization or licence must send the Minister a notice, in writing, no later than 30 days after the day the authorization or licence expired or was revoked.

Content of notice

(2) The notice must include the following information:

  • (a) the person’s given name, surname and date of birth;
  • (b) in the case of an authorization to possess,
    • (i) the amount of dried marihuana, if any, that has been destroyed in accordance with subsection 259.2(1) or (4), and
    • (ii) the authorization number;
  • (c) in the case of a personal-use production licence, the amount of dried marihuana and the number of marihuana plants, if any, that have been destroyed in accordance with subsection 259.2(2) or (4); and
  • (d) in the case of a designated-person production licence,
    • (i) the amount of dried marihuana and the number of marihuana plants, if any, that have been destroyed in accordance with subsection 259.2(2) or (4), and
    • (ii) the given name and surname of the person who holds or held the authorization to possess on the basis of which the licence was issued.

Statement

(3) The notice must include a statement that

  • (a) in the case of an authorization to possess, other than the case described in paragraph (b), the person no longer possesses any dried marihuana that was obtained under the Marihuana Medical Access Regulations;
  • (b) in the case of an authorization to possess when the person remains the holder of a valid designated-person production licence, the person no longer possesses any dried marihuana that was obtained under the Marihuana Medical Access Regulations except dried marihuana that they are authorized to produce or possess under the licence;
  • (c) in the case of a personal-use production licence when the person remains the holder of a valid authorization to possess, the person
    • (i) has discontinued production of marihuana that was authorized under the licence, and
    • (ii) no longer possesses any dried marihuana or marihuana plants produced under the licence except dried marihuana that they are authorized to possess under the authorization; and
  • (d) in the case of any other personal-use production licence or a designated-person production licence, the person
    • (i) has discontinued production of marihuana that was authorized under the licence, and
    • (ii) no longer possesses any dried marihuana or marihuana plants produced under the licence.

Attestation

(4) The notice must be signed and dated by the person and must attest that it is correct and complete.

Application of this section

(5) For greater certainty, for the purposes of this section,

  • (a) every authorization or licence that is valid on March 31, 2014 expires on that day;
  • (b) a notice must be sent even if the person who held the authorization or licence has no marihuana that must be destroyed under section 259.2; and
  • (c) when a person is required to send a notice in relation to an authorization and one or more licences, or in relation to more than one licence, they may send a single notice that includes all of the required information and statements.

Non-compliance with this section

(6) If there is significant evidence of noncompliance with the obligations imposed by this section,

  • (a) the Minister is, for greater certainty, authorized to use his or her full authority under the Act to achieve compliance; and
  • (b) the Governor in Council is prepared to consider, on an urgent basis, on the recommendation of the Minister, amendments to these Regulations to deter such non-compliance.

11. Paragraph 263(2)(d) of the English version of the Regulations is replaced by the following:

  • (d) specifies that the notice is valid only if the licences referred to in paragraph (1)(a) are valid at the time of the sale or provision; and

12. Paragraph 266(2)(d) of the English version of the Regulations is replaced by the following:

  • (d) specifies that the notice is valid only if the licences referred to in paragraph (1)(a) are valid at the time of the sale or provision; and

COMING INTO FORCE

13. These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

The current Marihuana Medical Access Regulations (MMAR), which will be repealed on March 31, 2014, require participants in the Marihuana Medical Access Program (the Program) to cease production of (if applicable) and destroy marihuana in their possession when their authorization to possess (ATP) or licence to produce marihuana for medical purposes expires without being renewed, or is revoked. Within 10 days of the destruction, a Program participant must notify the Minister of Health, in writing, of the amount of marihuana that was destroyed. This notice is intended to confirm that an individual who is no longer authorized to possess or licensed to produce marihuana is not in violation of the Controlled Drugs and Substances Act (CDSA), which prohibits possession or activities with controlled substances, including marihuana for medical purposes, unless there is valid authorization to do so.

On March 31, 2014, the MMAR will be repealed, and all authorizations to possess and licences to produce under the MMAR will expire. The Marihuana for Medical Purposes Regulations (MMPR), which were published in the Canada Gazette, Part II, on June 19, 2013, do not contain an obligation to notify Health Canada of the destruction of marihuana obtained under the MMAR. As of November 2013, there were over 30 000 licences to produce marihuana under the MMAR issued by Health Canada. By extending the notification requirements under the MMPR, Health Canada improves its capacity to monitor compliance and take the necessary compliance and enforcement actions respecting the participants who do not comply with the requirements to destroy marihuana and notify the Minister.

In addition, under section 66 of the MMPR, licensed producers are required to state their “site address” on the label on the immediate container for dried marihuana. Some licensed producers have pointed out that this requirement forces them to disclose the location of their operations to clients and members of the general public which, they believe, exposes their facilities to increased security risks. While the requirement to state the address of the licensed producer on the label is consistent with labelling practices for other controlled substances, such as morphine, these substances are typically dispensed from a pharmacy and show the address of the retailer (i.e. the pharmacy) and not that of the manufacturer or wholesale distributor. Despite the fact that licensed producers have similar security requirements as those licensed to produce other narcotics, there is concern that the illegal widespread use of marihuana for recreational purposes may increase the risk that a licensed producer would be the target of crime if the production location is more generally disclosed. The Regulations Amending Certain Regulations Relating to Marihuana for Medical Purposes (the Amending Regulations) remove the obligation for licensed producers to state their site address on the label and allow licensed producers discretion in determining how their location information is disseminated.

In addition, section 54 of the MMPR restricts the use of pest control products on marihuana only to products that were “registered” under the Pest Control Products Act (PCPA). Under the PCPA, products undergo a premarket approval process to minimize the associated risks. Pest control products must be either registered or otherwise authorized in accordance with the Act. The Amending Regulations harmonize the regulation of the use of pest control products on marihuana for medical purposes with the regulation of pest control products generally in the PCPA. All pest control products that are available for use on marihuana must be in compliance with the PCPA.

Finally, grammatical errors and inconsistencies in language regarding certain provisions in the MMPR and the Narcotic Control Regulations (NCR) relating to marihuana have been corrected.

Background

The MMPR, which were published in the Canada Gazette, Part II, on June 19, 2013, implement three key changes to the production and supply of marihuana for medical purposes in Canada:

  • the production and distribution of quality-controlled, dried marihuana for medical purposes by fully regulated and inspected licensed producers;
  • the end to Health Canada’s role in processing applications for authorizations to possess, licences for personal-use and designated-person production, and supplying marihuana for medical purposes under the Program by March 31, 2014; and
  • the repeal of the MMAR and the elimination of personal-use and designated-person production licences of marihuana on March 31, 2014.

The MMAR will be repealed on March 31, 2014, and the Program will end. On that date, all valid licences and authorizations issued under the MMAR will expire. The expiration of all authorizations and licences under the MMAR requires that all marihuana (including plants) in the possession of Program participants be destroyed. While the MMAR are still in force, marihuana that is destroyed must be reported to the Minister of Health within 10 days of destruction. When the MMAR are repealed, this provision will also be repealed, and, in the absence of these amendments, Health Canada’s ability to monitor compliance with the requirement for Program participants to destroy marihuana and notify the Minister of Health would be limited. Though ongoing compliance promotion activities, including reminder letters and Web notices, may be useful in encouraging destruction of unauthorized marihuana, the effectiveness of these activities may be limited by the lack of information about the extent of non-compliance to determine where enforcement may be appropriate.

Moreover, some law enforcement agencies and other stakeholders, such as municipalities and provinces, have expressed concern about the accountability of the large number of licence holders obligated to destroy their marihuana on March 31, 2014. Some law enforcement agencies, in particular, have an interest in the transition from the MMAR to the MMPR.

Health Canada may refer cases of non-compliance to law enforcement. This is consistent with other compliance actions taken by Health Canada. For example, over the past two years, from January 1, 2012, to December 2013, Health Canada issued 81 warning letters and referred five cases of non-compliance with other regulations under the CDSA to the Royal Canadian Mounted Police (RCMP).

Program participants have been kept informed of the repeal date of the MMAR and the end of personal-use and designated-person production licences. The date of the repeal of the MMAR was made public for comment during the publication of the MMPR in the Canada Gazette, Part I, on December 15, 2012. (see footnote 4) At that time, comments received from Program participants generally opposed the elimination of personal production. However, other comments were also received from stakeholders who expressed support for the repeal. Health Canada provided responses to these comments in the final Regulatory Impact Analysis Statement published on June 19, 2013. (see footnote 5) Since then, Health Canada has also publicized the changes under the MMPR on its Web site as part of its overall communication to stakeholders during the transition period and beyond. (see footnote 6) After the MMPR came into force, Health Canada communicated the changes to be implemented, including the elimination of personal production licences, and reminded Program participants through a letter of their obligations when the MMAR is repealed.

Objectives

The main objectives of the Regulations Amending Certain Regulations Relating to Marihuana for Medical Purposes are to

  • enhance Health Canada’s ability to monitor compliance and support the enforcement of obligations arising from the repeal of the MMAR;
  • allow for licensed producers who do not wish to state their site address on their product labels to be able to do so; and
  • better align the wording in the MMPR in respect of pest control products that will be permitted for use on marihuana for medical purposes with the provisions of the PCPA.

The Amending Regulations also include minor non-substantive changes to the MMPR to correct minor typographical and grammar errors and certain technical inconsistencies in the MMPR and the Narcotic Control Regulations (NCR) in relation to marihuana that have been identified since the publication of the MMPR.

Description

Consistent with the objectives, the Amending Regulations implement the following changes to the MMPR.

Section 259.2: The amendment clarifies the existing obligation to destroy marihuana upon the expiry (without renewal) or revocation of an authorization or licence issued under the MMAR. This new amended provision is similar to subsections 65(1) and (2) and section 66 of the MMAR, which are repealed. This section clarifies the existing rules for a person who held an authorization to possess or a licence to produce marihuana for medical purposes under the MMAR, in terms of the obligation to cease production of (as applicable) and immediately destroy marihuana (including plants) which the person is no longer authorized to possess or produce as a result of the expiry or revocation of the authorization or licence. This is a new section which will remain in force until September 30, 2014.

Section 259.3: This section is new and principally extends the existing notification obligation past March 31, 2014, when the MMAR are repealed. Even though this section will be in force until September 30, 2014, all individuals who have an Authorization to Possess (ATP), Personal-Use Production Licence or Designated-Person Production Licence (DPPL), whose authorization or licence expires (without renewal) or is revoked, must send a written notice to the Minister within 30 days of the expiry or revocation or April 30, 2014, whichever is earlier. The notice must contain

  • the given name and date of birth of the authorization or licence holder;
  • the authorization number;
  • the quantity of dried marihuana and number of plants destroyed (as applicable);
  • a statement indicating that the sender of the notice does not possess any marihuana he or she is not authorized to possess, and as applicable, has ceased production that was authorized under the MMAR;
  • in the case of a DPPL holder, the given name and surname of the person who holds or held the authorization for which the expired or revoked licence was issued; and
  • signature and date attesting that the information provided is correct and complete.

A notice must be sent by all individuals whose authorization or licence under the MMAR expires without being renewed or is revoked up to and including on March 31, 2014, even if they do not have any marihuana to destroy. Program participants have 30 days following the date of expiration or revocation or until April 30, 2014, whichever is earlier, to send the notice. A participant who held an authorization and a licence may send a single notice containing all the requested information.

Sections 259.2 and 259.3 replace sections 65 and 66 of the MMAR, which are repealed.

Section 66: Paragraph 66(a) under the section is amended to remove the requirement to state the site address on the label of the immediate container for dried marihuana. Instead licensed producers are required to state a telephone number and email address with which they can be contacted. The amendment does not prohibit licensed producers from stating their address on the product label for business or other reasons, if they see merit in doing so.

Section 1: A definition of pest control product has been added to this section of the MMPR to align with the definition of “pest control product” under the PCPA.

Section 6: Subsection 6(2) is amended to indicate that the prohibition against the sale or provision of marihuana with “additives” in subsection 6(1) of the MMPR excludes a residue of a pest control product unless a maximum residue limit is specified for the product and that limit is exceeded. This change replaces the previous provision on maximum residue limits and is better aligned with the relevant sections of the PCPA in respect of maximum residue limits.

Section 54: This section is amended to indicate that pest control products that are not registered but otherwise authorized under the PCPA may be used on marihuana for medical purposes in addition to those which are registered. The change ensures that pest control products which are otherwise compliant with the PCPA are available for use.

Paragraph 66(d) of the English version contained the phrase “upper left corner” and was inconsistent with the French version of the same paragraph. The word “corner” is replaced by “quarter” to correct the error and be consistent with the French version.

Section 92: Subparagraph 92(b)(iv) of the French version contains a use of the masculine when the feminine should be used. The word “duquel” is replaced with “de laquelle” to correct the grammatical error.

Section 263: Paragraphs 263(2)(d) and 266(2)(d) both contained grammatical errors and are corrected by adding “in” immediately before “paragraph (1)(a)”.

Finally, the NCR are amended to correct technical inconsistencies in certain requirements relating to marihuana under subsections 31(4), 65(1) and 65.1(1).

Benefits and costs

The Amending Regulations are an important measure towards a successful transition to the new MMPR and the end of personal production. These Regulations, for the most part, affect Program participants and licensed producers and have a low overall impact on Canadians. Health Canada will incur incremental costs to implement the Amending Regulations. Program participants may also incur costs. Licensed producers will not incur any incremental costs when the Amending Regulations are implemented but may benefit from some of the changes. The greatest benefit, however, would accrue in terms of health and safety effects from the destruction and removal of unauthorized marihuana from the homes of individuals who are no longer permitted to possess or licensed to grow under the repealed MMAR.

Health Canada’s incremental implementation costs will be up to approximately $400,000. This includes contract costs involved in mailing approximately 42 000 letters to Program participants. It also includes salary and operational costs associated with the retention of staff who would be primarily responsible for data entry and processing of returned notices. This staff will also be responsible for tracking, follow-up, compliance monitoring and reporting information for enforcement activities that may be undertaken.

Program participants are required to send a notice to Health Canada after the Amending Regulations are promulgated. These notices may be sent in a variety of ways, including mail. The costs incurred by the Program participants would be dependent on the method of notification chosen. For example, registered mail would incur a cost; however, email would not. The cost of destruction of marihuana, if any, exists under the status quo and is not incremental to the Amending Regulations.

There are no incremental costs associated with the administrative changes to remove the obligation for licensed producers to state their site address on product labels or with the amendments to the use of pest control products. These changes are likely to have a zero net effect on licensed producer costs. On the contrary, access to approved pest control products may have potential benefits by reducing the chances of crop failure due to pests.

In summary, the total cost of implementation is not expected to exceed $500,000.

“One-for-One” Rule

The “One-for-One” Rule does not apply to these amendments, as there is no change in administrative costs to business.

Small business lens

The small business lens is not applicable as there are no costs to small business.

Consultation

The changes to the MMPR made by the Amending Regulations are mostly in response to feedback received from stakeholders representing law enforcement and municipalities after the MMPR came into force. As part of the transition to the MMPR, Health Canada conducted a series of outreach activities with stakeholders including licensed producer applicants. The amendment to the information required on the product label was in response to feedback from both applicants to become licensed producers and recently licensed producers. As well, during the application process, many licensed producer applicants and licensed producers indicated to Health Canada that they need to be able to use pesticides to deal with pests in order to mitigate the significant risk of crop failure. The changes to the requirements for the use of pest control products on marihuana are in response to this request and inconsistencies with the PCPA noted after the MMPR came into force.

Finally, the amendment extending the notification requirement addresses feedback from other levels of government, including municipalities, as well as law enforcement agencies across Canada. In particular, during briefings with law enforcement on the transition from the MMAR to the MMPR, police forces told Health Canada that there should be transition measures to further enhance the elimination of personal production when the MMAR is repealed.

In developing the Amending Regulations, Health Canada consulted externally and expanded its internal consultations to involve a more active role by the Pest Management Regulatory Agency (PMRA).

Rationale

The extension of the notification obligation will expand Health Canada’s ability to monitor compliance and aid enforcement, as necessary. These amendments help ensure that those who are currently authorized to possess or licensed to produce marihuana under the MMAR are in compliance with the law after March 31, 2014. Without these amendments, Health Canada would have more limited tools to verify that Program participants no longer have marihuana obtained under the MMAR and follow up with any required compliance and enforcement actions.

The removal of the requirement to disclose the location on the label and instead allow for different contact information may provide additional security without imposing any additional security measures. Consistent with the original regulatory intent, it may enhance the security of licensed producer sites by not broadly sharing their physical address while still ensuring that patients, health care professionals and law enforcement agencies have multiple channels to reach the licensed producers using other label information. As well, the Amending Regulations will align the wording in the MMPR in respect of pest control products that will be permitted for use on marihuana for medical purposes under the MMPR with existing provisions of the PCPA. Limiting Health Canada’s options to approve products only through “Registration” and not via authorization could have meant that very few pest control products would have been available to licensed producers in the foreseeable future. The Amending Regulations will ensure that pest control products which are otherwise compliant with the PCPA are available for use on marihuana.

Implementation, enforcement and service standards

Since the MMPR were published in the Canada Gazette, Part II, on June 19, 2013, Health Canada has been communicating with all Program participants to ensure they are aware of their responsibilities as the repeal of the MMAR approaches. A mail-out sent to all participants in November 2013 included a reminder of the obligation to destroy any marihuana in their possession, under the MMAR, on or before March 31, 2014. There will be additional mail-outs sent in the coming months.

In March, all Program participants will be provided with information on effective methods for destroying marihuana, as well as a standard attestation form to assist participants in the notification process. In April, a final reminder of the requirement to destroy and notify will be sent in addition to the information regarding methods of destruction and the standard attestation form.

In terms of compliance and enforcement, Health Canada will take a graduated approach by emphasizing compliance promotion efforts prior to the end of the notification period.

Health Canada will track receipt of notifications from Program participants and disclose a list of those who fail to comply with the notification requirement to the RCMP. The RCMP will address this information as appropriate, for example, by prioritizing which non-compliant licensees to investigate.

Federal, provincial and local law enforcement agencies are responsible for taking enforcement action in response to contraventions of the CDSA or its regulations. Criminal prosecution for offences under the CDSA may involve the application of a fine and/or a term of imprisonment. This is an ongoing responsibility of the criminal justice system.

Contact

Office of Controlled Substances
Controlled Substances and Tobacco Directorate
Health Canada
Telephone: 1-866-337-7705
Email: OCS_regulatorypolicy-BSC_politiquereglementaire@hc-sc.gc.ca