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IT MAY BE LEGAL BUT IT WON’T BE PRETTY: Cannabis Packaging and Labelling Regulations

On October 17, 2018 marketing and sale of cannabis will no longer be a criminal offence in Canada. However, the federal government has done its best to remove the appeal of cannabis and related products by introducing a strict regulatory regime to govern the promotion and packaging of such products.

When legalized, cannabis will cease to be governed under the Controlled Drugs and Substances Act and will instead be governed under the Cannabis Act.  [Bill C-45, an Act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts]. The coming into force will trigger coordinating amendments to many other statutes and the promulgation of four sets of regulations under the Cannabis Act: (1) Cannabis Regulations; (2) new Industrial Hemp Regulations; (3) Qualifications for Designation as Analyst Regulations (Cannabis); and, (3) Cannabis Act (Police Enforcement) Regulations.

This article will provide a brief overview of rules for the packaging of cannabis and related products contained in the Cannabis Regulations which are expected to be published in the Canada Gazette, Part II, on July 11, 2018. 

Purpose of Marketing and Packaging Regulations

The stated purpose for regulating the promotion and packaging is to promote informed consumer choice by clearly identifying potency and health risks while preventing the use of packaging design elements which could induce young people or others to use cannabis.

Required Product Information

The following information will be required on all packaging:

  • Name and contact information of the processor who packaged the product;
  • Product description (brand name and class of cannabis);
  • Product lot number;
  • Product weight or volume, depending on the product class;
  • Packaging date (and expiry date, if one has been set);
  • Recommended storage conditions;
  • THC / CBD content (expressed as the percentage of THC / CBD the product could yield, and by unit or dose, if applicable);
  • Number of units/doses, if applicable;
  • The statement: “KEEP OUT OF THE REACH OF CHILDREN”; and
  • For cannabis oil, the type of carrier oil and the name of any allergens.

All of this required information must be shown in black sans-serif type on a white background in both English and French. There are specific requirements for the text size and positioning of this information. 

Standardized Cannabis Symbol

In addition to the required product information, a standardized cannabis symbol must appear on the principal display panel of every package. The cannabis symbol is red and black and it must appear in the upper left 25% of the principal display panel, be oriented with the text readable from right to left and have a minimum size of 1.27 cm x 1.27 cm.

Mandatory Health Warning

A mandatory health warning message must also appear on every label.  The health warning must appear in black text on a bright yellow background. There are specific requirements for layout, positioning, font and print size. There will be a series of 14 accepted warnings published with the regulations and each warning will be required to appear on the packaging for each brand name with equal frequency in a calendar year. An example is provided below.

Packaging Appearance

The regulations also place strict limitations on the appearance of cannabis packaging generally.

The brand name of the product may appear in any non-metallic, non-florescent colour, and any style and type size, so long as the type size is equal to or smaller than the type size used for the health warning message.

Only one additional brand element may appear on the package along with the brand name. A brand element can be a brand name, trademark, logo, design or slogan that is reasonably associated with or evokes cannabis, a cannabis accessory or a related service. If the brand element is text or a logo, it may be no larger than the standardized cannabis symbol.   The definition of “brand element” in the Cannabis Act includes “distinguishing guise”, which refers to the protection of the unique shape of a product or its packaging.  

The background of colour of the packaging must be a single uniform colour. The inside of the package must also be a single uniform colour, although the inside and outside colours may be different. Fluorescent or metallic colours are prohibited. Any colour that is used must contrast with the red colour of the standardized cannabis symbol and the yellow background of the health warning message. The labels and packaging may not have any glossy coating, embossing (raised or recessed relief images), texture, foil, cut-outs or peel-away labels.

Cannabis products (other than cannabis plants or cannabis seeds) are to be packaged in an immediate container that is tamper-evident, child-resistant, prevents contamination and keeps cannabis dry. Any over-wrap must be colourless and transparent.

The regulations further provide that the package may have no hidden features designed to change its appearance or surface area. Packaging cannot emit or produce scent or sound. Barcodes must be rectangular and contain no image or design. The use of branding or images on the interior of the package is prohibited, and no inserts may be included in any package.  

Transition Provisions

Medicinal marijuana products are currently packaged and labelled in accordance with the Access to Cannabis for Medical Purposes Regulations (SOR/2016-230). It is expected that there will be a six-month transitional period following the coming into force of the Cannabis Act, to allow the packaging of cannabis products for medical purposes to be changed to meet the new regulations.

Health products containing cannabis which are currently approved for sale under the Food and Drugs Act and its regulations will continue to be marketed and remain available to Canadians as they are now.

Proposed regulations on cannabis edibles and concentrates have not yet been released. The House of Commons Standing Committee on Health has indicated that the sale of cannabis edible products and concentrates will be authorized no later than 12 months following the coming into force of the Cannabis Act.  Regulations are expected within this time frame.

Marketing

More generally, the Cannabis Act prohibits the promotion or sale of cannabis, cannabis accessories or cannabis related services,

  1. in a manner that there are reasonable grounds to believe that could be appealing to young persons;
  2. that sets out a testimonial or endorsement, however displayed or communicated;
  3. that sets out a depiction of a person, character or animal, whether real or fictional;
  4. that associates the cannabis or one of its brand elements with, or evokes a positive or negative emotion about or image of, a way of life such as one that includes glamour, recreation, excitement, vitality, risk or daring; or
  5. that contains any information that is false, misleading or deceptive or that is likely to create an erroneous impression about the characteristics, value, quantity, composition, strength, concentration, potency, purity, quality, merit, safety, health effects or health risks of the cannabis.

In addition, there are more prohibitions against: (i) targeting young persons in promotions; (ii) providing inducements such as free samples, gifts with purchase, games or contests; (iii) in the sponsorship of persons, entities, events, activities or facilities; or (iv) as part of the name of a facility that is used for cultural or sports activities. Even “communicating information about price and distribution” to consumers will be largely restricted to the point of sale.

Some exceptions are available for business to business marketing and the use of cannabis brands on promotional items with no connection to cannabis (ie. pens and t-shirts).

For media businesses and marketing firms, it will be important to note that it will also be unlawful to “publish, broadcast or otherwise disseminate, on behalf of another person” any promotion that violates the regulations. In other words, they may be held directly liable for violations prepared or published on behalf of others.

Unfortunately, many of the prohibitions provide no “bright line” tests for determining compliance and will be subject to interpretation when the law comes into force. To avoid the attention of the authorities, prudence is recommended.

Trademark Considerations

Taking into account all of the mandatory information and warnings which must appear on the packaging of cannabis products, and the limitations on packaging backgrounds and special effects, it becomes clear a business has only a narrow opportunity to distinguish its product from those of its competitors.  There are only two elements to work with: (1) the brand name and (2) the brand element. Thus, it is critically important to choose elements that are highly distinctive, can be registered as trademarks and broadly enforced against competitors. 

After eliminating marks which appeal to young people, depict persons, characters or animals, are testimonial, evoke lifestyle imagery, or could be false or misleading in any manner, the pool of remaining choices may seem very small. While we cannot offer inspiration, we can provide some guidance.

Try to choose a trademark which has little or no descriptive connection to the product. Businesses are often tempted to select marks that are descriptive or highly suggestive in order to convey a clear impression of the product itself. Unfortunately, descriptive or suggestive terms cannot be monopolized and result in weak trademarks. From a marketing perspective, it is hard to distinguish one trader from many businesses in the same field merely relying on descriptive words.  From a legal perspective, such marks cannot be broadly enforced. For example, in the present context, a business may be tempted to choose CANNASMOKE as a trademark for cannabis products. However, as of the date of writing this article, a search of the Canadian trademarks register discloses that “canna” is an element in over 400 trademarks. As a result, CANNASMOKE would do little to set a cannabis product apart from its competition and would not enjoy broad legal protection against copycats. Coined terms take more marketing effort to imbue with meaning, but such invented marks can be very strong trademarks from both a legal and marketing perspective in the long run (e.g. KODAK or XEROX).

For logos, try to develop bold marks with a large surface area, but little complexity so they will reproduce well on the relatively small portion of the package available for a brand element.

Try to ensure that the selected trademark will comply with the regulations prior to filing any trademark application. While a trademark registration grants the registrant the right to prohibit others from adopting the same or similar trademark, it does not authorize the registrant to use their registered trademark. Trademarks, like other forms of intellectual property, are negative rights. For example, there are many registered trademarks that include the word “organic”, but which may not be lawfully used for food products that do not qualify as “organic” under federal regulation. The registration of a trademark does not avoid the need to comply with other relevant regulations for the associated products or services.

To arrive at an effective trademark, start by brainstorming, then weed out the marks that cannot be used effectively or protected broadly. When you have a short list of marks, compare them against the prohibitions set out in the Cannabis Act, keeping in mind that if there are reasonable grounds to believe your mark contravenes the prohibition, it would be prudent to re-think your choices.