Exploring Canada’s Medical Cannabis Industry

toronto, cashinbis, cannabis, canada

On November 4th, I had a rather special first-time experience. My wife and I found ourselves garbed in full “clean room” clothing, surrounded by hundreds of flowering cannabis plants. The plants were growing in a high-tech, immaculately clean, almost painfully bright grow room. We were at a production facility operated by Tweed, the largest federally regulated Licensed Producer (LP) of medical cannabis operating in Canada.

Emphasis on “federally regulated.”

Over the last few years, Health Canada (equivalent to the US FDA and NIH) has created a set of rules and protocols for the licensing, regulating, and inspecting of large-scale medical cannabis production. This is a remarkable achievement. While medical cannabis is now legal in many countries, very few regulate it at a national level, and none have taken the Canadian approach.

Hopes appear to be running high for legalization to be right around the corner.

The Netherlands has a national program but only have a single producer (Bedrocan). In contrast, there are currently 26 LPs in Canada, with many hundreds of applications pending. Under the recently defeated Conservative government, the granting of these licenses had been a long, tedious, and often impossible exercise. These delays are likely to significantly diminish under the new Liberal government.

The Liberal party made the full legalization of cannabis a promise in its campaign platform, and further vowed to give the file immediate attention if it won a majority. This has obviously excited many people, and there has been no lack of comments or advice from a number of the high-profile Canadian cannabis activists, such as Marc Emery, Dana Larsen, and others. Hopes appear to be running high for legalization to be right around the corner.

However, often overlooked in all the excitement and rhetoric is the stated motivation by the Liberals for legalization. Their website states:

To ensure that we keep marijuana out of the hands of children, and the profits out of the hands of criminals, we will legalize, regulate, and restrict access to marijuana.

In other words, the principle goal is harm reduction via regulation. And regulation implies bureaucratic control. Lots and lots of bureaucratic control. This will take quite some time to craft, and require consultation with all manner of groups, not the least being the provinces and municipalities who will obviously want a say (and a tax cut) in anything having to do with cannabis sales.

Who will lead the discussions for the Liberal party and what can we expect from them? The obvious candidates are the Ministers of Health (Dr. Jane Philpott), Justice (Jody Wilson-Raybould) and Finance (Bill Morneau). Civilized recently ran an article profiling all three. Some have been quite positive, and none highly negative, on the topic of cannabis legalization. It’s a good start. Still, given the complexity of what is being attempted (a nationally regulated recreational, privately owned, cannabis marketplace) they face a daunting challenge.

This task will be somewhat simplified because the production side of the regulations has already been created, as part of the scope of the MMPR (Marijuana for Medical Purposes Regulations, the current national medical cannabis program). Currently, there are only 26 LPs. However, there is nothing to stop Health Canada from expediting the license granting process. As the number of producers increase so will supply, which will force the price downwards. So Canadians can feel confident they will not be gouged on price, and will have choices between different products and companies.

Still, distribution of cannabis is not a trivial problem. There are many issues to be resolved: Who may sell it? Where may it be sold? How much should it be taxed? etc. Implementation will be further complicated by the rather unique dispensary situation in Vancouver, British Columbia, which is going through its own regulatory process in trying to manage the 150+ dispensaries and compassion clubs operating within its boundaries. Local police have taken a hands-off approach to these quasi-legal retail outlets which operate in their city and appear willing to follow whatever new guidelines the Liberals create. Nevertheless, one can imagine overlapping areas of conflict between the local and federal regulations.

The various physician associations in Canada have been unhappy about being the “gatekeepers” for giving these prescriptions.

Another important decision facing the Ministers is the issue of personal home growing. Will it be allowed? Many Canadians have expressed concerns about a few “big pot” commercial organizations controlling the marketplace. While this is unlikely to happen, given the large number of producers we will see coming on board over the next few years, the Liberals have yet to articulate their position on this issue. On the surface, there doesn’t appear to be any reasonable way in which they can prevent it, so one can assume that, much like with beer, individual citizens will be allowed to produce it on their own without permission to sell it.

And let’s not forget the possible reactions by the US Federal government. The last time talk of legalization came up here in Canada, there were quite a few people who felt that the strong stance against it by the American government was so powerful that it influenced our decision, and we backed down.

Ironically, the oddest twist in the legalization process will probably be its impact on the current medical cannabis marketplace as well as the various national and provincial medical associations. While there are over 40,000 Canadians who are registered to legally use cannabis, getting a prescription is a long and laborious process. The various physician associations in Canada have been unhappy about being the “gatekeepers” for giving these prescriptions. In some provinces, such as Quebec, the hoops one must jump through to qualify is truly staggering. Of course, under legalization, potential patients will not need to ask their doctor’s permission to use cannabis. They will be able to buy it from a retail outlet. Therefore, if the medical cannabis market in Canada is going to sustain itself, it will have to be able to offer something that the recreational market cannot, such as no tax, lower costs, drug insurance coverage, etc. Working that out is also going to take some time.

While medical cannabis is now legal in many countries, very few regulate it at a national level, and none have taken the Canadian approach.

The good news is that Canadians aren’t going to mind waiting. Canada doesn’t really have an equivalent of the US DEA which seems intent on disregarding their marching orders. For the time being, while Canadian law enforcement will continue to watch for illegal large-scale grow-ops to bust, one can expect them to be fairly laid back in general towards simple possession, currently operating dispensaries, etc.

Given that the cannabis business is a new and exciting area of interest in Canada, those who will be involved in making it a success now have the freedom to make it happen with intelligent planning and fairness in mind. Assuming this all works out Canadians will have good reason to be proud in leading the way for other nations to follow in the march to global cannabis legalization.

  • Jean Bonnez

    In their ”Draft Marijuana Policy Paper”, the Liberal party state that each Canadian will be able to grow 6 plants.

    10 plants would be better.

    Licenced Producers (Tweed, Tilray, CanniMed) gamma irradiate cannabis.

    Sick Canadians have complained that Tweed was selling them hermaphrodite cannabis.

    Canadians much prefer dispensaries to Licenced Producer’s junk cannabis.


    This is a great blog. Looking forward to new content. We can only hope that our new government will take the proper steps. What does everyone think of this business about selling weed at the LCBO?

  • Kush_guy

    everyone you can now Order top grade buds and oils for patients and smokers.

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