What Will Happen When Recreational Cannabis Becomes Legal in Canada?

recreational cannabis

Cannabis legalization feels like closing the barn door long after the horse has bolted. Recreational cannabis is being used everywhere, regardless of its legal status, and cannabis-containing consumer products are also ubiquitous. Cannabidiol (CBD) is one of the important active compounds in cannabis and is wildly used in topical products due to its anti-inflammatory properties and other benefits. Even though CBD is technically not allowed in cosmetics under regulations enforced by Health Canada and the U.S. FDA, you can easily purchase countless CBD-containing products online and at specialty retailers.

The sale of these products also confuses consumers, as a majority of the products are marketed as derived from hemp and thus claimed to be legal and allowed for consumer use. However, according to Canada’s Cosmetic Ingredient Hotlist, only hemp seed oil is allowed in cosmetic products. But this oil is restricted to not contain any CBD, and contain less than 10 parts per million Tetrahydrocannabinol (THC) – the psychoactive component of cannabis. Cosmetic products in Canada cannot contain any therapeutic/drug benefits which is why cannabis-derived CBD is legal by prescription only.

This brings to question what will regulators do after legalization? Will they allow or rein in these “under the radar” products that have been so pervasive for so long? How will regulators educate consumers on the products that follow regulations versus the ones that do not? If these products choose to come under the regulatory umbrella so they can be legally marketed, consumers may notice an increase in prices due to all the associated regulatory costs incurred by the manufacturer. Will any trickle-down costs cause demand for these products to fall?  Will this dampen the hype around the expected economic boost? Will consumers simply continue to buy unregulated products that are easier on the wallet?

Many of these questions can only be answered after recreational cannabis legalization and how governments regulate and enforce the cannabis market.

For more information, please do not hesitate to contact Focal Point Research Inc.  We are leading Canadian regulatory and Health Canada consultants for Natural Health Products, OTC DrugsCosmetics, and other personal care products.