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Canada’s crackdown on some cannabis extracts could cost industry millions

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Health Canada has begun asking some federally licensed marijuana companies to stop selling certain ingestible cannabis products the regulatory agency says are incorrectly classified and labeled as “extracts” rather than “edibles,” MJBizDaily has learned.

The move could cost cannabis businesses millions of dollars, Canadian industry sources say, because the products in question – including some lozenges and chewable extracts – are increasingly popular among consumers.

Executives are puzzled over Health Canada’s timing, especially since some of the products in question have been on the market for years.

The apparent crackdown also comes at a sensitive time for the Canadian marijuana industry, as most publicly traded cannabis producers are still losing money.

From a packaging perspective, the distinction is important because any cannabis product classified as an “extract” has 100 times more allowable THC per package than a product classified as an “edible,” making it more appealing to certain consumers.

One letter sent to a licensee by Health Canada, obtained by MJBizDaily, requests the company to halt the sale of the flagged products.

The letter is from Anika Stella Chasse, acting director general of the Compliance Directorate in Health Canada’s Controlled Substances and Cannabis Branch.

Despite blowing the whistle, Health Canada stopped short of ordering the company to recall the products, which have been on store shelves and available to consumers.

It isn’t known if Health Canada sent a noncompliance letter to every company selling the products now under federal scrutiny or only select producers.

Health Canada did not immediately answer MJBizDaily queries for comment.

In the letter seen by MJBizDaily, the agency said that, “upon further review of the products in question, Health Canada has assessed that this product is edible cannabis and, consequently, it contains a quantity of THC that exceeds the allowable limit of 10 mg per immediate container.”

The letter goes on to define “extract,” “edible” and “food.”

“Health Canada has determined that (the products in question) are consumed in the same manner as food, and therefore fit the definition of edible cannabis,” the Health Canada letter notes.

The company that shared the letter with MJBizDaily requested anonymity.

The rules

Unlike extracts, cannabis products classified as edibles are limited to 10 milligrams of THC per package.

Shane Morris, founder of Ottawa-based Morris & Associates Consulting, noted that Schedule 4 of the Cannabis Act identifies the classifications of marijuana that can be sold.

“For all ‘cannabis extracts.’ the THC quantity must not exceed 1,000 milligrams per immediate container. This is 100 times more THC per pack than what is permitted in an ‘edible’ class of cannabis product,” he said.

All new cannabis products in Canada must follow the government’s so-called Notice of New Cannabis Product (NNCP) process, which requires licensed producers to notify Health Canada months in advance of new products.

In fact, some ingestible extracts that contain significant amounts of THC have been on the market for years.

In August 2021, New Brunswick-based cannabis producer Organigram launched its “Jolts” ingestible extracts, saying at the time it was “Canada’s first flavored high potency THC lozenge” containing “a total of 100 mg per pack.”

Organigram did not immediately respond to requests for comment from MJBizDaily, and it’s unknown if the company received a warning letter from Health Canada.

A product that has undergone the NNCP process doesn’t necessarily mean it received Health Canada’s seal of approval.

Rather, the process effectively gives the regulatory agency a heads-up ahead of time regarding all new products.

It also gives Health Canada an opportunity to address any regulatory issues with companies before millions are spent on production and marketing.

Sources at one company, which did receive a noncompliance letter, said Health Canada did not voice any concerns with the classification of the product until the regulator’s letter arrived this month.

Millions at stake

If all ingestible extracts and lozenges are pulled from the Canadian market, the industry could lose out on tens of millions of dollars in sales per year, industry sources say.

Morris estimates that in December 2022 alone, the Ontario Cannabis Store sold roughly 942,000 Canadian dollars ($600,000) worth of the “loophole” ingestible extracts in wholesale orders and via its online consumer store.

“Assuming Ontario sells approx. 40% all cannabis in Canada, then on an annual basis this would mean the retail value of these products would be approximately CA$33.9 million per annum in the recreational market, not inducing medical or Quebec where these new products are not sold,” he said via email.

Morris previously worked in operations at the Canadian Food Inspection Agency and the Public Health Agency of Canada.

He later worked at licensed producers Aurora Cannabis and Hexo Corp.

Sherry Boodram, CEO and co-founder of Toronto-based regulatory consulting firm CannDelta, said licensees agree that reducing the public health risks associated with cannabis products should always be a priority.

Boodram also said cannabis companies found creative ways to manufacture and market products to compete with the illicit market.

“For Health Canada to suddenly bring down the hammer on how these products are being classified, especially three years after (Cannabis) 2.0 products became legal, will undoubtedly cause business losses during a time when cannabis companies are already struggling,” she said.

“This could ultimately lead consumers to turn to the illicit market as legal, regulated (and tax-paying) companies go insolvent because of Health Canada’s inconsistent regulatory compliance interpretation and enforcement actions (or inactions).”

Another industry executive, who requested anonymity, said it is “highly ineffective” for Canada’s federal regulator to raise concerns for a classification of products that have been on the market for more than 18 months in some cases and “followed and met all regulatory requirements and made extensive financial investments.”

“This sudden position of concern is counter to the spirit of the Cannabis Act and will undoubtedly move consumers back to the illicit market – which operates without the safety and oversight the legal market offers,” the executive added.

“While the rules are purportedly being changed – there is minimal direction, we’re unclear where this is coming from and sense a misguided interpretation of what is deemed risky to Canadians.”

Source: https://mjbizdaily.com/canadas-crackdown-on-some-cannabis-extracts-could-cost-industry-millions/

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Jio’s 1,600-Satellite LEO Constellation Gets Technical Green Light

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Reliance Jio has crossed a significant milestone in its space connectivity ambitions after its proposal to deploy a Low Earth Orbit (LEO) satellite constellation of around 1,600 satellites received a positive technical assessment from the Indian National Space Promotion and Authorisation Centre (IN-SPACe).

The evaluation, conducted jointly by IN-SPACe, the Indian Space Research Organisation (ISRO), and the Wireless Planning and Coordination (WPC) wing of the Department of Telecommunications, reportedly concluded that Jio’s proposed system meets the required technical standards and is comparable to leading global satellite broadband networks.

India’s Indigenous LEO Satellite Vision

Under the proposal, Reliance Jio plans to deploy between 1,600 and 1,650 satellites in Low Earth Orbit at an altitude of around 650 kilometres.

The planned constellation is expected to provide high-speed satellite connectivity across India, with approximately 32 satellites visible from any location at a given time. The company aims to roll out the network within the next two to three years, subject to regulatory approvals.

According to industry estimates, the satellite system could deliver 4.5 to 5 terabits per second (Tbps) of total data capacity, making it one of the largest satellite broadband projects proposed in India.

The project is expected to require an investment of $10–15 billion (approximately ₹95,000 crore to ₹1.42 lakh crore), reflecting the scale of infrastructure needed for satellite manufacturing, launches, ground stations, and user terminals.

Regulatory Process Moves Forward

Following the successful technical review, the proposal is expected to move into the next phase of regulatory approvals.

The government may now assist Jio in securing orbital slots, coordinating spectrum usage, and filing applications with the International Telecommunication Union (ITU), the global body responsible for managing satellite orbit and frequency allocations.

Obtaining orbital rights remains a critical step, as Low Earth Orbit has become increasingly competitive due to the growing number of satellite broadband projects being planned worldwide.

Officials also indicated that the proposed satellite architecture has been designed to coexist with future Indian LEO constellations, allowing multiple domestic operators to share orbital resources efficiently.

Broadband, Mobile Connectivity, and Strategic Applications

Jio plans to use the satellite network to provide a range of communication services, including satellite broadband, mobile backhaul, enterprise connectivity, and direct-to-device (D2D) satellite communication, particularly in remote and underserved regions where conventional telecom infrastructure is limited.

The company also intends to establish 20 to 22 ground stations across India to support network operations.

Apart from commercial telecommunications, officials have highlighted the project’s potential strategic importance. A domestically developed satellite constellation could strengthen India’s communication infrastructure, reduce dependence on foreign satellite operators, and support national security requirements.

Reports suggest preliminary discussions are underway regarding the possibility of integrating defence-related payloads into some satellites, enabling both civilian and strategic use.

Major Step for India’s Space and Telecom Sectors

Industry analysts view the technical clearance as an important milestone in India’s expanding private space ecosystem. If Jio secures the remaining regulatory approvals and international orbital clearances, the project could become the country’s first large-scale indigenous LEO satellite broadband network.

The initiative also aligns with India’s broader efforts to expand digital connectivity while strengthening its presence in the global satellite communications market.

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Alleged Crores Pharma Scam Mastermind Arrested from Surat

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After evading law enforcement for nearly 13 years, an accused linked to a large-scale pharmaceutical fraud case has been arrested by Delhi Police from Surat, Gujarat. The suspect is alleged to have orchestrated a series of financial scams involving fake identities, forged documents, and dishonoured cheques used to procure high-value pharmaceutical raw materials.

Authorities say the accused, identified as Himmat Singh Lodha, is believed to have defrauded multiple pharmaceutical companies in Delhi of goods worth approximately ₹98 lakh before disappearing and remaining underground for years.

Fake Business Deals and Dishonoured Cheques Used in Fraud

Investigators claim the accused posed as a legitimate pharmaceutical trader and placed bulk orders for expensive drug ingredients, offering post-dated cheques as payment security.

In one documented case from 2013, he allegedly obtained around 550 kilograms of Gliclazide, a diabetes-related pharmaceutical ingredient, valued at over ₹26 lakh. When suppliers attempted to encash the cheques, they were reportedly returned with the remark “account closed.”

Following the transaction, the accused allegedly vacated his office and rented residence and disappeared without settling payments. He was later declared a proclaimed offender in 2016 after repeatedly failing to appear before court proceedings. Authorities had also issued a reward for information leading to his arrest.

Multiple Identities and Repeated Fraud Pattern

Police investigations further link the accused to another cheating case dating back to 2012, where he allegedly used a fake identity, “Kailash Jain,” to obtain a large consignment of Ambroxol HCL, a pharmaceutical compound used in cough medications. The value of that consignment was estimated at around ₹72 lakh.

Officials believe the accused followed a consistent modus operandi—posing as a credible businessman, securing high-value goods on deferred payment terms, and then disappearing after delivery while shutting down business operations.

Investigators suspect that forged business records, fake company credentials, and fabricated financial histories were used to build trust with suppliers and gain access to expensive raw materials.

Multi-State Surveillance Leads to Arrest in Surat

A special Crime Branch team tracked the accused through coordinated surveillance efforts across multiple cities, including Mumbai, Ahmedabad, and Surat. After nearly a month of technical monitoring and intelligence gathering, officials located and arrested him from a residential area in Surat.

Authorities also revealed that the accused had been involved in property-related activities while staying under the radar to avoid detection.

Growing Threat of Corporate Identity Fraud

The case highlights a rising trend of organised financial fraud targeting industries that rely heavily on trust-based transactions and deferred payments. Experts note that criminals increasingly exploit gaps in corporate verification systems by using fake GST registrations, temporary offices, and forged documentation to appear legitimate.

Cybercrime and financial fraud specialists warn that such schemes are becoming more complex with the widespread availability of digital business tools, making it easier to create convincing but fraudulent corporate identities.

Experts Urge Stronger Due Diligence in High-Value Transactions

Experts, including former IPS officer and cybercrime specialist Prof. Triveni Singh, emphasize the need for stricter verification procedures in commercial dealings. He noted that relying solely on paperwork or digital business profiles can expose companies to significant financial risk.

Authorities and industry experts recommend physical verification of business operations, bank account validation, and detailed background checks before engaging in high-value or deferred-payment transactions—particularly in sectors like pharmaceuticals, where single consignments can involve transactions worth crores.

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EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices

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A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.

Investigation Under Digital Markets Act Gains Momentum

The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.

Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.

Industry Groups Demand Swift Action

Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.

Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.

In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.

Google Denies Allegations

Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.

However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.

Potential Billion-Euro Penalties

If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.

Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.

Wider Implications for Big Tech

The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.

A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.

As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.

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