Asselin was initially suspended from the Canada squad after admitting taking painkillers for toothache.
He has been severely reprimanded by the International Rugby Board but cleared to take part in Manchester.
"He's allowed to play. He was reprimanded, but he's available to play," confirmed IRB spokeswoman Michelle Treacy.
The IRB appeal committee's ruling came just before Canada were due to begin their opening game against favorites New Zealand.
And it followed the decision by Games organisers to allow 100m gold medallist Kim Collins to keep his title despite testing positive for salbutamol.
Asselin, who played in the team that reached the sevens quarter-finals four years ago, admitted he might have taken a banned substance during routine pre-Games testing.
To prevent a possible positive drugs test at the Games, he was suspended by Rugby Canada on Tuesday and kept at home.
But the following day the Canadian Centre for Ethics inSport cleared him of any doping charges and he boarded aplane for England.
The IRB refused to accept the CCES decision and referred the matter to its appeal committee, which subsequently decided Asselin should be allowed to play.
Asselin's Canadian team-mate, triathlete Kelly Guest, is the only athlete to be expelled from the Games after testing positive in a pre-Games test for nandrolone.