Photographer: Trevor Hagan/Bloomberg

Canada Details Packaging Rules Ahead of Marijuana Legalization

  • Proposals would limit companies to single ‘brand element’
  • Government risks policy fail with overly strict rules: Battley

Canada’s legalized marijuana must be sold with plain packaging and health warnings, while smaller producers face strict limits on crop sizes, according to draft rules released in advance of legalization.

Among other proposals, marijuana packages can only display one “brand element” beyond the product’s name, and symbols can’t be larger than the government’s obligatory warning that’s shaped like a stop sign. The federal government said it plans to license “micro” growers if they restrict their crop area to 200 square meters, or about 2,150 square feet.

The plain packaging and health warning labels

Source: Health Canada

Canada is gearing up to become the first Group of Seven nation to permit recreational pot use, and the restrictions may affect the profitability of publicly-traded companies such as Canopy Growth Corp., Aurora Cannabis Inc. and Organigram Holdings Inc. Monday’s proposed rules were released to give companies extra time to prepare, according to the documents. Parliament must still give final approval to the legalization bill, with the market expected to open sometime this summer.

“Consistent with the Task Force on Cannabis Legalization and Regulation’s recommendation to require plain packaging of cannabis products, the regulations would set strict requirements related to the use of branding, logos, and colors,” Health Canada said in the report from Ottawa.

Read about the earlier debate about marijuana packaging

While Prime Minister Justin Trudeau’s government hoped to legalize marijuana by July, the fate of the law’s passage remains unclear because of delays in the unelected Senate. Health Minister Ginette Petitpas Taylor said in February the Senate might pass the bill by June and the market could be open eight to 12 weeks after that. Senators have said they need extra time to evaluate how legal marijuana will affect law enforcement and U.S. relations.

The labeling rules also called for health warnings on a bright yellow background with accompanying text such as “Do not use if pregnant or breastfeeding,” pushing the rules more toward those governing the sale of tobacco. Some companies had asked for more relaxed rules, similar to those for beer and wine.

“Plain packaging that treats cannabis like tobacco is outrageous and scientifically wrong,” Cam Battley, chief corporate officer of Edmonton-based Aurora Cannabis said by phone. “The federal government is risking a policy fail.”

The move upends Canada’s goal of replacing the existing black market with a legal, safer one as the proposed restrictions hamper companies’ ability to compete and differentiate their products, he said. Products available illegally “are beautifully packaged and branded” and the rules are a move in the “wrong direction,” he said.

— With assistance by Jen Skerritt, and Josh Wingrove

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