It’s been a momentous year for the cannabis industry in Canada. Not only did the country legalize cannabis with the Canadian cannabis law in October 2018, but it has also taken a giant leap in setting up a multi-billion dollar market from scratch. The progress made over the past 18 months has been truly remarkable, but there’s no denying the marijuana legalization process has had its growing pains.
The complexity of scaling up a national legal cannabis supply chain was always going to be a challenge. Behind the scenes, producers, retailers, testing facilities and financial institutions have raced to be part of a new cannabis industry exploding with potential—while Health Canada and provincial governments have been busy overseeing and regulating cannabis sales.
The marijuana industry is still very much in its infancy and the supply chain is still navigating this new landscape. But after a year, Canada’s cannabis market has firmly established its roots.
What’s next? Cannabis 2.0.
All eyes are on Canada as it prepares for this next stage. Let’s answer some of your most pressing questions and what’s on the horizon in this second phase.
What progress has been made in the market so far?
There has been significant progress. Let’s look at some of the statistics. The total active cannabis cultivation area has grown 300% since before legalization, and there are now more than 560 licensed stores across Canada. Monthly legal sales of non-medical dried cannabis have almost doubled since legalization, and sales of cannabis oil have nearly tripled. Despite what many consider a slow and steady start, the outlook is optimistic. The market is forecasted to reach 22.5% CAGR between 2019 and 2024, providing more than 75,000 jobs.
Why the disparity between supply and demand?
One reason is the strict regulations around quality control. More than 85 percent of the cannabis inventory is unfinished, and some of it may never be ready to sell. This is due to potential contamination or microbial risk. Licensed producers operating under the Cannabis Act must follow good production practices (GPP) related to cannabis. Products must not be sold unless they meet these requirements, elevating the crucially important role of analytical testing.
What role has cannabis testing had in the process?
Rigorous chemical and microbiological testing by a licensed third-party lab is needed to ensure supply meets the safety, purity and potency requirements as established by Health Canada.
Under the Cannabis Act, testing must be conducted using validated methods and a representative sample of each lot or batch. A portion of the sample must be retained for at least a year after the date of sale. License holders must keep a record of all test results along with corrective and preventative action plans for two years. These records will be reviewed as part of the Health Canada inspection program. Health Canada can also opt to collect samples at any point during regular and unannounced inspections.
What’s the impact of the new “Cannabis 2.0” regulations?
Amendments to the Cannabis Act have made cannabis edibles, extracts, and topicals legal under the strict guidelines established by the government. License holders wanting to produce these cannabis-derived goods have been able to submit applications to Health Canada since October 17, 2019. Notices must be made 60 days before the sale, which means mid-December is the earliest date that these products will be available on store shelves.
Illicit cannabis edibles are known for their unpredictability. The government’s final regulations will address this with strict packaging and dosage limits. In terms of quality control, this new class of cannabis products will be required to comply with the contamination regulations in the Cannabis Act and Food and Drugs Act. The guidelines have recently been updated to include this new class of products.
What are the new tests for potency?
One of the most important aspects of cannabis testing is identifying the quantity or concentration of cannabinoids in a product. Whether its THC, THCA, CBD, CBDA, or other, the potency of the product for purchase must be displayed on packaging.
According to the proposed regulations for edible cannabis, cannabis extracts, cannabis topicals, the government has introduced dose-per-package THC potency limits across the different categories:
- Edible Cannabis (eating or drinking): 10 mg of THC per package
- Cannabis Extract (ingesting): 10 mg of THC per unit (such as a capsule) or dispensed amount and 1000 mg of THC per package
- Cannabis Extract (inhaling): 1000 mg of THC per package
- Cannabis Topical (applying to skin, hair or nails): 1000 mg of THC per package
What contaminants should you test?
Testing your cannabis samples for microbial and chemical contaminants is another critical thing to note. This should take place as the final step in the production process to address the risk of contamination during processing. The tests are designed to determine whether contaminants are within the tolerance limits listed in the regulations. The tolerance limits for residual solvents are listed under the Cannabis Act, and contaminants like mycotoxins fall under maximum levels for chemical contaminants in foods under the Food and Drugs Act.
What’s the update on pesticide screening?
At the time of legalization in October 2018, the how of pesticide testing was vague. However, this was cleared up at the beginning of 2019, when mandatory testing was introduced. We expect to see updates to these guidelines in December again, so stay tuned.
License holders are only permitted to use pesticides or pest control products (PCPs) that are approved for use on cannabis under the Pest Control Products Act. Cannabis testing is required under the amended Cannabis Act to analyze for active pesticide ingredients, with a defined limit of quantification (LoQ), in each cannabis matrix. Analysis methods must be validated and able to quantify active pesticide ingredients, at concentrations equal to or lower than the LoQ, against the background of the naturally occurring chemicals in the samples.
What analysis methods are emerging as the best for cannabis testing?
The Mandatory cannabis testing for pesticide active ingredients – Requirements specifies that all cannabis products must be tested for pesticide active ingredients before being sold or distributed. This includes limit of quantification (LoQ) for pesticide active ingredients in each matrix (i.e., fresh or dried cannabis, cannabis plants and seeds, cannabis oil, and any cannabis products derived from industrial hemp.).
The guidelines also state that labs must ensure that methods are validated and specific to cannabis products. These methods should require the sample extract to be cleaned using common pesticide extraction techniques (e.g., a QuEChERS technique alone or in combination with solid-phase extraction). The extract may then be concentrated or analyzed directly on chromatographic and spectroscopic instruments (e.g., by gas chromatography-tandem mass spectrometry [GC-MS/MS] or liquid chromatography-tandem mass spectrometry [LC-MS/MS]).
There are many techniques that can be used for chemical analysis of a natural product that contains hundreds of chemical entities across a very wide range of concentrations, like cannabis. If you’re interested to learn more about some of the well-known techniques out there, check out my previous blog — A beginner’s instrumentation guide to cannabis analysis.
About Me, Paul Winkler
I play an active role in supporting cannabis (marijuana and hemp) applications at SCIEX. I have more than 30-years of experience owning and operating contract labs in the environmental and bioanalytical markets. I’ve been part of the SCIEX family since 2011; started as a field application chemist and today I’m a market development manager for the North America team; helping customers like you with your analytical challenges and educating the market on the many possibilities of LC-MS/MS systems is my passion.