Health Canada fires warning shot

Last Friday, Health Canada fired a warning shot across the bow of licensed producers of cannabis, warning against engaging in unacceptable promotion of cannabis in the run-up to the Cannabis Act coming into effect. This may well be a signal to the industry that Health Canada intends to actively enforce that Act when it does come into force.

In a brief statement posted by Health Canada last Friday (July 13), Health Canada has signalled that it expects producers and others within the cannabis space to act responsibly in full compliance with applicable laws. The department is particularly concerned by the sponsorship of events, such as music festivals, and other promotional activities being undertaken by licensed producers of cannabis for medical purposes, obviously in anticipation of the legalization of cannabis for recreational purposes scheduled for October 17, 2018.

Health Canada reminds producers that at present, prior to the legalization of cannabis for recreational purposes, advertising the product can violate prohibitions of the Narcotic Control Regulations, prohibitions that can carry penalties of up to $5 million on indictment or a maximum fine of $250,000 (for a first offence) or $500,000 (for a subsequent offence) on a summary conviction, with the possibility of imprisonment.

It also takes the opportunity to remind the players in the new recreational industry that as of October 17 when the Cannabis Act will come into force, sponsorships and many other promotional activities will be strictly prohibited. According to the Health Canada statement, “[the] actions of some companies have underscored the need for the prohibitions in the Act and their rigorous enforcement.”

Many in the new industry have been wondering about how actively Health Canada will be enforcing the provisions of the Cannabis Act, at least initially. This statement may be a warning that Health Canada intends to actively enforce the provisions dealing with promotion out of the starting gate and that producers should not take advantage of the period prior to the Cannabis Act coming into force to promote their products in ways that will soon become illegal.

This statement should bring industry players to reflect on their proposed marketing strategies. It may mean that the largest dividends will be earned by those who develop long-term strategies within the strict confines of the Act rather than adopting more aggressive activities and hoping to rely on a lack of enforcement.