Reporting of loss or theft of cannabis

Table of contents

• Foreword
• 1.Purpose
• 2.Scope
  • 2.1.Regulations Governing the Reporting of Losses or Thefts
• 3.Background
• 4.Definitions
• 5.Reportable loss
  • 5.1.Examples of cases that meet the definition of reportable loss that must be reported and recorded by a licence holder under the Cannabis Act:
  • 5.2. Examples of cases that do not meet the definition of a reportable loss but must be recorded by a licence holder under the Cannabis Act (with records kept on site):
• 6.Theft
• 7.Internal investigation
• 8.Loss or theft reporting
  • 8.1.Contact information for loss or theft reports
  • 8.2.Situations where a loss or theft must be reported
  • 8.3.Situations where reporting is not required
• 9.Loss or theft reporting form for cannabis
  • 9.1.Instructions for completing the Loss or Theft Report Form for Cannabis
• 10.Submission of the completed report form
• 11.Contact information for the Controlled Substances and Cannabis Branch

1. Purpose

This document provides guidance to regulated parties and exemptees under the Cannabis Act (CA) and its regulations in completing a Loss or Theft Report Form for Cannabis.

Regulated parties and exemptees must notify the Minister of the loss or theft of cannabis in accordance with the relevant regulations or the conditions of their exemption. Such notifications must be submitted to Health Canada Controlled Substances and Cannabis Branch using the Loss or Theft Report Form for Cannabis (CS-FRM-011).

2. Scope

This document was developed to provide guidance to regulated parties and exemptees in meeting the regulatory requirements for reporting losses or thefts of cannabis.

Under the CA, regulated parties include (but are not limited to) holders of a licence to cultivate, process, sell, conduct analytical testing or research, holder of a cannabis drug licence, registered and designated persons, pharmacists, health care practitioners and hospitals.

This document also applies to exemptees who must report any losses or thefts as per the terms and conditions of their exemptions.

2.1 Regulations Governing the Reporting of Losses or Thefts

This document is not intended to replace the CA or its regulations respecting the loss or theft of cannabis. The CA and its regulations shall in all circumstances take precedence over these guidelines should there be any inconsistency.

3. Background

Canada is signatory to the Single Convention on Narcotic Drugs, 1961, the Convention on Psychotropic Substances, 1971, the Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, 1988 and is party to the resolutions set by the International Narcotics Control Board (INCB). Part of the mandate of the INCB is to prevent diversion of controlled substances, precursors and cannabis to the illegal market.

The CSCB plays an important role in protecting public health and public safety by controlling and regulating controlled substances and cannabis and as such, uses multiple avenues to accomplish that task, by administration of legislation and activities governing the possession, import, export, production, and sale or distribution of cannabis. Prevention of diversion is also accomplished through gathering information regarding losses or thefts of cannabis. These can be primary sources of substances for the illegal market.

Furthermore, as per INCB guidelines, Canada is also required to submit information regarding yearly losses or thefts that have occurred nationally to the United Nations, so as to create a more concrete picture regarding the diversion of controlled substances and cannabis across the country.

4. Definitions

Armed Robbery

The theft of cannabis accomplished through threats of violence toward personnel at a facility during working hours.

Break and Entry

The theft of cannabis from the storage of a facility by forced entry after working hours.

Date of Discovery

The date at which the regulated party becomes aware of the loss or theft occurrence. Please note that this applies to a situation in which it is assumed a loss or theft has occurred, even if there is an investigation ongoing to confirm it. If the occurrence no longer meets the definition of a reportable loss or theft, an amendment to the Loss or Theft Report should be sent to Health Canada.

Exemptee

An individual or class of individuals that are exempted pursuant to section 140 of the CA.

Facility

The premises or site used for the purpose of conducting regulated activities with cannabis.

Grab Theft

The theft of cannabis from a facility during working hours without warning. The person conducting the theft 'grabs' the product and escapes.

Holder of a Cannabis Drug Licence

The holder of a licence issued under s.62 (1) of the Cannabis Act.

Licence holder

The holder of a licence issued s. 62(1) under the CA, other than a holder of a licence that is subject to the Industrial Hemp Regulations.

Loss in Transit

When cannabis has been lost or misplaced during transport, delivery, sending from one location to another.

Loss Unexplained

Including inventory discrepancies that cannot be explained (comment on the frequency of reconciliation counts), is:

1. a loss unexplained at the time of reporting that continues to be investigated internally. Upon completion of the investigation, additional information should be provided to the CSCB as an amendment to the original form; or
2. a loss that remains unexplained after an internal investigation, which may be subject to an external investigation by law enforcement and for which an amendment must be sent to the CSCB upon completion of the investigation, if known; or
3. a loss that cannot be attributed to any particular cause or action (excluding unusual waste).

Official Individual

The regulated healthcare professional or other individual designated in accordance with the CA and/or their regulations that is responsible on behalf of the organization/establishment for ensuring regulated activities, e.g. possession, provision, dispensing, import, export, production, comply with the CA and the regulations with respect to cannabis. Note that the official individual is responsible for the information reported on the loss or theft form. The official individual varies with the type of facility. E.g. for a licence holder, the responsible person referred to in section 37 of the Cannabis Regulations or its alternate is the official individual. For a pharmacy, staff pharmacists or the pharmacy manager (if they are a pharmacist) are the official individuals.

Other Loss or Theft

Any other type of loss or theft that doesn't fit in the categories mentioned (e.g. manufacturing errors).

Pilferage

The theft of cannabis from a facility by an employee during working hours.

Regulated parties

Under the CA include (but are not limited to) holders of a licence to cultivate, process, sell, conduct analytical testing or research, holder of a cannabis drug licence, registered and designated persons, pharmacists, health care practitioners and hospitals.

Theft in Transit

When product has been stolen during transport, delivery, sending from one location to another.

Unusual Waste

Claims of waste of cannabis that can be explained but not on the basis of normally accepted business activities (e.g. production waste, yield loss).

5. Reportable loss

For the purpose of this document, a reportable loss for a licence holder under the Cannabis Act is an incident where the loss cannot be explained on the basis of normally accepted operations or business activities, as applicable. Notwithstanding discrepancies described in section 5.1of this document (i.e. explainable losses) all other losses should be reported. This being said, any discrepancies that can be explained on the basis of normally accepted operations or business activities, as applicable, should be recorded in an incident report and filed on site for 2 years and made available during inspections.

Note: The lost cannabis may, for instance, come from unserviceable stock, filled orders awaiting pickup or delivery, transportation or inventory. This should be indicated in section 8 and 14 of the loss or theft report submitted.

5.1 Examples of cases that meet the definition of reportable loss that must be reported and recorded by a licence holder under the Cannabis Act:

• A physical inventory count falls short of those in the records and exceeds the acceptable limits set by your organization on the basis of normally accepted operations or business activities.

Routine reconciliation of records will help prevent the diversion of cannabis.

5.2 Examples of cases that do not meet the definition of a reportable loss but must be recorded by a licence holder under the Cannabis Act (with records kept on site):

• Cannabis rendered unserviceable due to spillage or breaking do not qualify as reportable losses.
  • An economic loss (for example, a loss of market value due to supply/demand variations) is not considered a reportable loss under the CA.
    • Claims of waste of cannabis that can be explained on the basis of normally accepted operations or business activities, as applicable.

Note: Surpluses of cannabis do not need to be reported but they should be recorded in an incident report.

Registered and designated persons, pharmacists, practitioners, health care practitioners and hospitals must report any loss to the CSCB after becoming aware of the loss. A holder of an exemption pursuant to section 140 of the CA must report loss or theft of cannabis in accordance with terms and conditions of the exemption, as applicable.

6. Theft

A theft is the removal of any quantity of cannabis under the custody of a regulated party or an exemptee without its explicit legitimate consent.

7. Internal investigation

Regulated parties and exemptees should, as far as possible, initiate an internal investigation without delay after a loss, a suspected loss or theft is discovered. If the internal investigation is in progress at the time of reporting (i.e. within the time frames specified in section 10 of this document), this should be indicated on the form. Once the internal investigation is completed, any additional information should be provided to the CSCB as an amendment to the original form. Please indicate that this amendment is supplemental to the previously submitted loss or theft report.

An internal investigation may be useful as it may reveal inconsistencies in certain procedures or point out blind spots.

If cannabis suspected to be lost or stolen is recovered, the CSCB should be informed that the cannabis is no longer considered lost or stolen and the original report is to be retracted. This can be done by completing a new Loss or Theft Report Form for Cannabis to amend the previous one by checking amendment in box 1.

8. Loss or theft reporting

8.1 Contact information for loss or theft reports

Loss or theft reports for cannabis under the Cannabis Regulations must be reported to the CSCB. A holder of an exemption pursuant to section 140 of the CA must report loss or theft of cannabis to the CSCB in accordance with terms and conditions of the exemption, as applicable.

Contact information can be found at the end of the document.

8.2 Situations where a loss or theft must be reported

A Loss or Theft Report Form for Cannabis must be completed and submitted to the CSCB if a loss (as specified in section 4 of this document) or theft of cannabis has occurred. Some types of losses or thefts are listed in section 4 of this document.

Any losses that cannot be explained on the basis of normally accepted operations or business activities, as applicable such as: manufacturer's shortages; unexplained yield loss during manufacturing or packaging; and other unexplained loss should also be reported by a licence holder per the regulations.

Note: The official individual is responsible for reporting the loss or theft to the CSCB. Packaging errors and manufacturer's shortages should be reported by the official individual of the entity that discovers the error (for example, the receiver once the chain of signature is signed or the licence holder if discovered before or during transport).

Registered and designated persons, pharmacists, practitioners, health care practitioners and hospitals must report any loss or theft to the CSCB after becoming aware of the loss or theft.

8.3 Situations where reporting is not required

A Loss or Theft Report Form for Cannabis is not required from a licence holder for losses of cannabis that could be explained on the basis of normally accepted operations or business activities, as applicable, e.g. yield loss during manufacturing which falls with the organization's predefined acceptable limits. Where an incident occurs and results in unusable/unserviceable product (e.g. through spillage, breakage in transit, breakage on site), the official individual need not report a loss or theft, but should create an Incident Report or its equivalent and keep it on file at site for a minimum of two years. The official individual is to develop their own method of documenting non reportable losses for their inventory records.

An Incident Report should be signed by the official individual and a witness and include at least the information outlined below:

• the date of the incident;
• the name of the drug or product;
• the concentration of THC and CBD of the cannabis or cannabis product;
• the dosage form of the drug containing cannabis, if applicable;
• the quantity of cannabis wasted or destroyed; and
• a summary of the incident.

9. Loss or theft reporting form for cannabis

The Loss or Theft Report Form for Cannabis is available on Health Canada's web page or by writing to hc.compliance-cannabis-conformite.sc@canada.ca.

The online fillable report form can be saved and emailed to hc.compliance-cannabis-conformite.sc@canada.ca as the preferred method of submission. Alternatively, the form may be printed out and filled in by hand (in blue or black ink) and faxed or mailed in to the CSCB. Contact information can be found at the end of the document.

9.1 Instructions for completing the Loss or Theft Report Form for Cannabis

9.1.1 Administrative Information

The administrative information that must be entered on the form includes:

• The name of organization or individual that is reporting the loss/theft exactly as it appears as per their accreditation.
• The CRA Business Number, if available. Please note that this field is not mandatory.
• The date of discovery is when the regulated party or exemptee became aware of the loss or theft of cannabis. Please note that this is not the date of submission of the form or the date at which an internal investigation was completed.
• The address where the organization or individual is located along with the phone number of the official individual or the address of production for the registered person or the designated person, as applicable.
• The type of regulated party should be entered, along with the number of the licence, registration certificate, authorization or exemption, as applicable. For example:
  • Licence holders must enter their licence number.
  • Pharmacists must enter their licence number as assigned by the College of Pharmacists in their province or territory, if pharmacy is chosen as the type of establishment.
  • Practitioners must enter their licence number as assigned by their provincial professional licensing authority.
  • Nurse Practitioners must enter their licence number as assigned by the College of Registered Nurses in their province or territory.
  • If the establishment is a hospital and the responsible person is not one of the above, the licence number field can be ignored.
  • Registered Persons or Designated Persons must enter their Medical Cannabis Registry (MCR) registration number assigned to them by the CSCB.
  • Exemptees under section 140 of the CA should enter the authorization or exemption number assigned to them by the CSCB.
• The type of loss or theft suffered by the regulated party or exemptee should be entered. If the loss falls under the parameters of the options listed on the form, choose the one that fits. If the type of loss does not fit those listed on the form, choose 'other' and describe the type of loss that occurred as best as possible.

9.1.2 Reporting to the Police

9.1.2.1 Mandatory reporting

It is mandatory for licence holders and registered/designated person to report losses or thefts pertaining to cannabis to the police within 24 hours of the date of discovery. Pharmacist, health care practitioners, practitioners or hospitals do not need to report losses or thefts to the police.

9.1.2.2 Registered person or designated person

To note that under s.327(1)(c) of the Cannabis Regulations a registered person who is authorized to produce cannabis, or for whom cannabis may be produced by a designated person must report the theft or loss of the cannabis in their possession or their registration certificate to a police force within 24 hours after becoming aware of the theft or loss. Similarly, a designated person must report the theft or loss of the cannabis in their possession or of the document referred to in subsection 313(3) of the Cannabis Regulations to a police force within 24 hours after becoming aware of the theft or loss. Report of the theft or loss must be submitted to the Minister within 72 hours after becoming aware of the theft or loss and include confirmation that the theft or loss was reported to the police.

9.1.2.3 Voluntary reporting

Although the regulations do not require that all types of losses or thefts of cannabis be reported to the police, it is advised that the official individual notify the local police force in the case of any reportable loss or theft.

If a police report has been made, please check the appropriate box on the form and provide the following information:

• The date the loss or theft was reported;
• The name of the police service;
• The incident number assigned to the case by the police service;
• The telephone number and e-mail address of the investigating police officer; and
• The name of the investigating officer.

9.1.3 Loss or theft in transit

9.1.3.1 Transportation

The official individual responsible for the cannabis during transit should specify the name of the company transporting the cannabis.

Note: The Canadian organization sending, delivering or transporting cannabis is responsible for the product while in transit in Canada until it is received by the recipient. Therefore, any losses or theft must be reported by the Canadian originating organization if the recipient had not yet received the cannabis

9.1.3.2 Investigation report

Any additional information obtained from the organization sending, delivering or transporting the cannabis should be provided as an attachment including:

• A summary of the investigation report issued by the sending, delivering or transportation organization.

9.1.4. List of Cannabis lost or stolen

The official individual should ensure the following information is indicated regarding the cannabis listed as lost or stolen:

• The brand name of the product as it appears on the container or in inventory reports should be listed. If the brand name is unknown, a generic name of the product along with the name of the producer should be listed. It is imperative that the name of the product be filled out as comprehensively as possible (without the use of acronyms or internal short forms) because it is one of the most important pieces of information the CSCB has to track diversion.
• The class of cannabis should be listed. The classes of cannabis under schedule 4 of the Cannabis Act are as follows:
  • Dried cannabis
  • Fresh cannabis
  • Edible cannabis
  • Cannabis extracts
  • Cannabis topicals
  • Cannabis plants
  • Cannabis plant seeds
• A drug containing cannabis should also be listed in this section as a drug containing cannabis.
• The unit of measurement for the lost or stolen cannabis product should be listed
• The quantity of cannabis lost or stolen has to be listed. This should be an exact number and based on the form of the cannabis lost/stolen. For example, if the cannabis is present in discrete unit, the quantity listed could be 100, which would mean that 100 units have been lost or stolen. If the cannabis is in non-discrete unit please specify the quantity lost or stolen in mg, g, or kg (as applicable).
• The DIN (drug identification number) or Lot or batch # of cannabis. This is a unique identifier for the cannabis and should always be listed if known.

Note: The last recorded inventory count may be used to determine the quantity of cannabis lost or stolen where the exact number would be hard to determine, such as for thefts, armed robberies and pilferages.

9.1.5 Discovery: the specifics

In the report to Health Canada, the official individual, the registered person, the designated person or the exemptee may also include the following information as an attachment to the form:

• A detailed synopsis regarding how the loss or theft occurred to the best of the individual's knowledge regarding the situation, including any potential explanations for the loss or theft.
• A description of the security measures that the organization or individual had in place prior to the loss or theft. This may include physical security (such as alarms, safes, etc.) and also other precautionary measures such as frequency of drug counts, electronic flagging, the type of record keeping conducted and others.

For Licensed Cultivators, Processors or Sellers changes to the physical security of the site or to areas where cannabis is present may require approval prior to implementation - please submit any proposed security changes to HC.licensing-cannabis-licences.SC@canada.ca.

For Licensed Analytical Testers, Researchers or Holders of a Cannabis Drug Licence changes to the physical security of the site or to areas where cannabis is present may require approval prior to implementation - please submit any proposed security changes to hc.sp-licensing-cannabis-licences-sp.sc@canada.ca.

10. Submission of the completed report form

The loss or theft of cannabis should be reported to the CSCB within the time limits specified by the Regulations.

Table 1: Reporting Timeline

Regulated parties	Loss or theft to be reported to Police within:	Loss or theft to be reported to Minister within:
Licence holder	24 hours	10 days
Pharmacist, Health Care Practitioner, Practitioner or Hospital	N/A	10 days
Registered Persons or Designated Persons	24 hours	72 hours

The online fillable report form (CS-FRM-011) can be saved and emailed to hc.compliance-cannabis-conformite.sc@canada.ca as the preferred method of submission. Alternatively, the form may be printed out and filled in by hand (in blue or black ink) and faxed or mailed in to the CSCB. Contact information can be found at the end of the document.

Any additional information provided post-submission must be sent as an amendment to the original report and specified as such on the form by referencing the original report's date of submission and checking the relevant type of report in box 1.

To report the loss or theft of the following documents covered under the Cannabis Act and its regulations:

• Official documents/information such as: Licences, Registration Certificates, Export or Import Permits:

Please contact the CSCB at hc.compliance-cannabis-conformite.sc@canada.ca

11. Contact information for the Controlled Substances and Cannabis Branch

Health Canada
Controlled Substances and Cannabis Branch
A.L. 0300B
Ottawa ON K1A 0K9
Toll Free: 1-866-337-7705
Fax: 613-941-6840
E-mail: cannabis@canada.ca