CANNABIS IN CANADA. Prepared by: Shaun Casey, CEO Richard Hong, VP Sales OUR VIEWS ON BILL C-45 - TO THE STANDING COMMITTEE ON HEALTH

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1 CANNABIS IN CANADA OUR VIEWS ON BILL C-45 - TO THE STANDING COMMITTEE ON HEALTH VAPING RATHER THAN SMOKING INTRODUCING THE CLOSED SYSTEM Prepared by: Shaun Casey, CEO Richard Hong, VP Sales St. Catharines, Ontario August 15, 2017

2 Introduction The vaping industry in Canada can best be described as innovative. It is an industry borne out of a collective interest from motivated former cigarette smokers to find an alternative to their combustible tobacco habit. The government of Canada recognized this innovation by creating a category under the Tobacco Act for consumers who choose vaping as an alternative to smoking combustible cigarettes. From another perspective, the vaping industry has spawned an entire alternate market that has blurred the lines from a harm reduction approach to smoking cigarettes, to a harm reduction option for those wishing and wanting a better and more efficient method to consume their cannabis products through an appealing flavoured liquid and to control their respiratory issues. Cannabis in Canada is generally consumed by smoking. The irony is that cannabis at present is sold to patients from Licensed Producers or grown personally by and for those who have a prescription to consume the product legally. The recreational marketplace through Bill C-45 will expand the marketplace through smoking cannabis as the most common way to consume it. It is our hope that we can assist regulators by providing a new option via safe and regulated dosage options in a regulated delivery model worthy of consideration by government as an alternative for the cannabis marketplace. In 2013, FlavourArt made the bold move of entering the burgeoning Canadian flavour marketplace and positioned itself as the leader in flavour research and toxicology in the equally burgeoning electronic cigarette market. As a mature Italian flavour company, FlavourArt in Europe long ago established itself in Europe as an innovator for this niche market sector. One of FlavourArt s most groundbreaking achievements was moving to create and deliver safer flavouring formulas intended for vaping products and systems. This move came long before the vaping community started paying attention to the issue of unsafe compounds in vape liquids which emerged as a concern in 2012/2013. Health Canada and many health research groups globally had identified the diacetyl molecule as a health risk. FlavourArt spearheaded a research campaign to test flavourings in an in vitro environment and to better understand the effects of electronic vaping systems through the establishment of its ClearStream project in The project evolved into the formation of a partnership between FlavourArt and academic based FEM2 Ambiente. FEM2 Ambiente is a research division from the University of Milano Bicocca specializing in technology transfer from the academy to companies, and has been in place in Europe since Together, FlavourArt and FEM2 Ambiente launched ClearStream Onward a scientific cooperation focusing on consumer safety and education. Through this partnership experience, FlavourArt aspires to advise the HESA Committee of the benefit this kind of innovation can bring to the new market that the government hopes to create through the full-scale legalization of cannabis. Our efforts have spawned an option to the industry to include closed systems for vaporizers consisting of pre-filled cartridges in a device that is regulated for consistent output. We believe this kind of product could be used to deliver a more controlled, lower dosage option for THC/CBD 2

3 for the recreational market as contemplated by Bill C-45. We respectfully submit this with the intention of seeking to present to the Committee and we urge members to consider having FlavourArt as witnesses to describe our submission herein highlighted. Cannabis a new product profile Existing cannabis producers in Canada are rapidly scaling up their production and existing infrastructures to prepare for the recreational market that is sure to follow pending recommendations of the HESA Committee and final regulations for Bill C-45. Suffice to say, from what we see against the backdrop of this euphoria among current licensed producers, there is no easy road for existing producers who grow, process and deliver dried flower to patients once prohibition for recreational cannabis ends. A proper understanding of the space once it is legal is paramount. From FlavourArt s perspective this means treating the product as if it were a nutraceutical or even a pharmaceutical for that matter. This means better innovation in consumption options available to consumers who wish safer and reliable methods to consume their cannabis with lower metered dosages. In any event, it means that cannabis companies and regulators should consider the creation of an environment where best practices, comprehensive policies and procedures are in place to follow the law that is being considered through Bill C-45. This, in our view, also means the creation of products to consume cannabis other than simply high THC percentage dried flower which appears to be the single most ubiquitous form of cannabis that is sold by current licensed producers. We know from discussions we have had informally with members of the House of Commons that Parliament is considering responsible use for the new legal cannabis marketplace. We also know that many of the existing cannabis producers may be faced with the prospect of not being ready for a recreational marketplace where many new entrants who want to try cannabis may demand newer innovation than is currently available in the existing marihuana for medical purposes market. From research we have undertaken in the current MMPR marketplace, we know that companies who are licensed to produce and sell cannabis seem to have the edge on production of dried flower (or bud), but not so with new product profiles. That noted, since Bill C-45 was introduced, many existing licensed producers seem eager to cash in on this apparent once-in-a-lifetime opportunity. We know from our research that current cannabis LPs may not be prepared for what the sophisticated recreational pot consumer may want and need. It is in this spirit that we have prepared this submission. For the record, we are baffled that the government would even consider the only option for consuming cannabis in the recreational cannabis market through smoking, at a time when Health Canada is looking to curtail the incidences of tobacco consumption and 3

4 smoking through aggressive means. At the same time, provinces are regulating tobacco more and more, and one would think that the government would consider options that encourage a new product profile for the recreational marketplace. At FlavourArt we aspire to assist the Committee by encouraging it to look at a new product profile. It is through this submission that we introduce the latest in innovation that the Committee should consider as a regulated option for introduction into the recreational marketplace in effect a low-dose, closed system that is vapable with disposable cartridges that contain liquid cannabis. Cannabis vaping over smoking In the first instance, rolling cannabis into a cigarette-like form to smoke (or joint as is known) is the most common means of consumption even for those who take it medically. We encourage the development of a flavored and safe liquid option to be delivered in a vape product. It is clear that a vape-able cannabis product that is prepackaged into closed cartridges requires less concern for storage and chances of mold than dried flower. When it comes to cost effectiveness, this method definitely makes a difference as the consumer can consume exactly the amount they require for their level of enjoyment/medication. Regulators can appreciate that using a closed system and making it more available as a regulated option will allow for better lower dose metering with lower percentage THC concentrates. This allows people to progress with their consumption in far more controlled manner to determine their sensibilities and ensure personal safety. From a practical perspective, vaping small low-powered devices will give off much less of an odour and the exhale created by vaping cannabis is not harmful when expelled by the user as second-hand smoke is. Law-makers will know that there is still a fairly widespread dislike when it comes to cannabis because of the smell and the manner in which it is consumed. Our option presented herein is cannabis in vape-able liquid form, in a low dose format with no unpalatable stigma in public. Moreover, through a closed system, the recreational marihuana consumer will receive a consistent affect (or high). In FlavourArt s vision, we see multiple options in flavoured pods varying by strain and strength thus allowing the consumer to custom tailor their desired effect. Most importantly, those who wish to consume cannabis in the recreational marketplace will actually get what they pay for. In that same vein, our proposal envisions a low-dose option for cannabis for both THC and CBD where the effects of cannabis are controlled. Research at the University of Illinois at Chicago and the University of Chicago reported that low levels of THC reduces stress, but high doses actually increases anxiety. For most consumers, high level THC is far more likely to produce adverse, short 4

5 and long- term effects. This underscores the importance of dose, and the availability of a low maintenance low dose when it comes to THC (and CBD) and its effects. We know, too, from experience that consumers in the burgeoning recreational marketplace will simply just feel better vaping rather than smoking cannabis. Smoking is never healthy, and there will always be side-effects similar to a hangover from holding the combusted smoke in your lungs. Vaping without combustion has less detrimental effects on the body. For the many new users of the product that Bill C-45 makes possible, a low dose vapeable option will be the most successful and least harmful introduction to this product. Vape products for Cannabis from research to commercial accessibility through FlavourArt The ClearStream Onward project does not just test for diketones (unsafe molecules) but also tests the overall toxicity and irritant levels for all the FlavourArt flavorings currently on the market and those in development. The research protocol that we have developed and employ in our manufactured liquid products ensures that only the safest molecules are being used for the vaping industry. FlavourArt North America is committed to progressing vaping advocacy and providing e- liquid manufacturers and cannabis producers with the safest flavourings on the market. We have molecular chemical scientists on staff to develop flavours that are attractive to the recreational cannabis user and appeal to the mature market. FlavourArt North America operates in Canada under the leadership of its CEO Mr. Shaun Casey who is a chemist by training and has extensive experience in chemical manufacturing as well as in the vaping industry developing flavours and e-liquids for those who choose vaping as an alternative to cigarettes. The company has expanded its operations in the Niagara Region with a state of the art ISO manufacturing facility (using Good Manufacturing Processes) for producing flavouring concentrates for vape products now including the recreational cannabis market. More importantly, Mr. Casey is the founder and current Chairman of the Canadian Vaping Association, Canada s leading voice for vaping advocacy and has led the efforts for the vaping industry s advocacy with the federal government on Bill S-5 to create a category for vaping under the amendments to the Tobacco Act and has led efforts for effective legislation and regulation in every province across Canada. The co-author of this submission is Richard Hong who is the company s VP of sales and distribution. He has worked in product development and testing with the largest corporations in the United States in cultivation, extraction and distribution of cannabis and manufactured vapor products. Richard is an expert in vaping products and has been an effective resource for the do-it-yourself community as a former smoker. He has a prescription for medical cannabis and has been a staunch advocate for vaping cannabis over smoking it. 5