August 16, 2019



Published August 16, 2019

*The provincial excise taxes vary. Cannabis Benchmarks estimates the population weighted average excise tax for Canada.

**CCSI is inclusive of the estimated Federal & Provincial cannabis excise taxes..

The CCSI was assessed at C$6.86 per gram this week, down 1.7% from last week’s C$6.98 per gram. This week’s price equates to US$2,345 per pound at current exchange rates.


This week we turn our attention to the growing interest in cannabidiol (CBD) in Canada. Taking into account the popularity of CBD products in the U.S. and the fact that American lawmakers were working toward legalizing industrial hemp, from which CBD can be derived, the Canadian government included the regulation of CBD as part of the Cannabis Act, the country’s legalization measure that went into effect in October 2018. Under Canadian law, unlike in the U.S., both CBD derived from industrial hemp and CBD derived from cannabis plants with greater than 0.3% tetrahydrocannabinol (THC) are treated identically.



Let’s start with some background. Cannabis and hemp plants contain hundreds of chemical substances, some of which are known as cannabinoids. CBD, like all cannabinoids, interacts with the human Endocannabinoid System. Endocannabinoids are molecules produced by the human body that are chemically similar to those found in cannabis plants. Unlike THC, however, CBD is non-psychoactive.

CBD Molecular Structure

Source: Wikipedia

CBD and other cannabinoids are found in the trichomes of cannabis and hemp plants. Trichomes are tiny, glandular outgrowths that emerge on the flowers and leaves of cannabis and hemp plants as they mature. The greatest concentrations of trichomes are typically found on the flowers. CBD extracted from cannabis or hemp plants can take the form of an oil or a crystalline powder, which can be consumed directly in capsule or tincture form; oils can also be vaporized for inhalation. The recent popularity of CBD among consumers has led to such raw forms of the extracted molecule being incorporated into products such as topical creams, cosmetics, beverages, and foods.


CBD is still classified as a controlled substance under United Nations drug control conventions; hence CBD is regulated in Canada and must abide by the rules and requirements that apply to cannabis under the Cannabis Act. 


Regulation of the CBD Supply Chain in Canada 


Cultivation: A federal license under the Cannabis Act is required. This license could be a cannabis cultivation license under the country’s cannabis regulations or an industrial hemp license under the industrial hemp regulations.


Processing: A processing license is required to manufacture products containing CBD for sale.


Distribution: CBD and associated products can be sold by provincially authorized cannabis retailers (provincial online marketplaces or private storefronts) for recreational use and, for medical purposes, by federally-licensed sellers of cannabis.

Import and Export: As with cannabis, the international transportation of CBD is illegal under three United Nations drug conventions. CBD products may therefore only be transported across international lines if the importing/exporting party is a holder of a license issued under the Cannabis Regulations; as with the domestic production, distribution, and sale of CBD, a permit from Health Canada is required in order to engage in international trading. See our report from August 2, 2019 for additional details on import and export.

*The provincial excise taxes vary. Cannabis Benchmarks estimates the population weighted average excise tax for Canada.

**CCSI is inclusive of the estimated Federal & Provincial cannabis excise taxes..

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16 August 2019 Copyright © 2019 New Leaf Data Services, LLC.  All rights reserved