Today the Allard v. Canada verdict was given, which should be construed as a great win for the marijuana movement in Canada. Ultimately, the courts determined that the current MMPR as written was “grossly disproportionate” to the purported goals of the MMPR. What this means for the medical marijuana industry for Canada, in my opinion, is a win for both patients and producers.
The verdict was what I predicted last year, and the result is that the Court has ruled that the MMPR must be revised to allow individual patients the right to grow their own medical marijuana. However, none of this implies that the current system allowing commercial medical mariijuana production will be overhauled. I’ll get more into the details below, but basically I would foresee two parallel systems unfolding out of this later this year. The Canadian Government now has six months to change the MMPR to allow patients the right to grow their own medical product.
Now, the case was a constitutional challenge, and the result is a long commentary on the constitutional aspects of the MMPR. Unlike the Smith case where the Court immediately struck down a law, the Allard verdict has not done this. This verdict has made quite a few statements about the constitutionality of the MMPR, and has made some colourful comments with long-term implications about marijuana access, but has ultimately told Health Canada to fix the MMPR within six months. So, by August later this year we’ll get a clearer picture of what the MMPR system will look like.
But let’s talk about the verdict, and what was said. The full verdict can be found here (and any quotes offered below reference the page numbers in the verdict).
First, the verdict was about the access to medical marijuana. It was not about legalization (recreational use), “nor [was] it about the commercialization of marihuana” (p.4). It was basically about a handful of patients who were claiming that the MMPR didn’t allow them to the quality and strains of marijuana that they needed for their health, nor did it allow them the ability to afford it. They were claiming that under the MMPR, product was hard to find – especially at the quality and selection they were looking for – and even if they could find it, it was grossly unaffordable.
The plaintiffs were previously successful in getting an injunction to keep the old MMAR system alive until they could have their day in court. They wanted the former MMAR system to continue, not be repealed. Ultimately they were fighting for the right to grow their own medical marijuana at their own property, rather than be compelled to buy it from a commercial producer under the new system (MMPR).
Health Canada and the Government of Canada were on the other side of the table, arguing that the MMAR was a danger to society – that having home grow operations posed a risk for theft, fire, mould, escaping odours and directing product to the black market.
The government was not able to provide sufficient evidence to demonstrate their case, as we see in the “Reasons for Judgment” report that followed the verdict. Although I had heard from other sources that the case was not going well for the government, the verdict reasons clearly spelled this out. The Court commented that there wasn’t sufficient evidence showing that practitioners were over-prescribing marijuana (p.8), neither was there sufficient evidence (or any evidence) showing that product was being diverted to the black market (p.20). Arguments for mould, fire and theft were also clearly not supported – and the Court commented on numerous occasions that these are general risks and not necessarily a risk for all growers.
The verdict mentioned that affordability of product was not a necessary argument to support their constitutional ruling – that “this case does not turn on a right to ‘cheap drugs’, not a right ‘to grow one’s own’” (p.8). Further, the verdict mentioned that “with respect to affordability, I find that it is a barrier to access” and “that there is no guarantee that quality and strain availability at price flexibility (discount pricing) will be accessible when needed” (p.60).
The verdict made it clear that the evidence established that under the current MMPR system (a single supply source), that “there is no guarantee that the necessary quality, strain and quality will be available when needed at some acceptable level of pricing” (p.8). It was also mentioned that the Court accepted the Plaintiff’s evidence that the “availability of medical marihuana from LPs is sporadic, with many either out of stock or not accepting new customers” (p.57).
The verdict discussed many of the purported reasons for Health Canada transitioning the MMAR into the MMPR program, and most of the purported reasons were found to be inadequate. One of the most salient comments made, was that the MMAR was increasingly cost prohibitive for Health Canada to continue operating (i.e., with needing to have inspectors across the mushrooming number of grow locations), and which was a major premise for the new MMPR. In other words, Health Canada could no longer afford to keep the MMAR going. But the verdict made an interesting statement, that “the federal government was and would continue to be the major beneficiary of the move to the MMPR in terms of cost savings, and the persons who were and would continue to be most impacted were the patients due to the increase in cost” (p.14). In other words, the verdict was stating that the MMPR was saving the government money, but the difference was making the product that much more unaffordable under the new MMPR system. In other words, it was convenient for the government, but it diminished access to medical marijuana in the long run.
Ultimately, the Court commented that the MMPR didn’t live up to its core objectives for improving access to medical marijuana, nor did it prove to reduce the risk to health and safety of Canadians (p.9). There was a significant amount of commentary to the effect that the MMPR was good for the government, but terrible for Canadians – that it actually ended up in reduced access to medical marijuana, which in turn has driven Canadians to buying from dispensaries and the black market. Ultimately this was found to violate our constitutional rights (liberty and security).
Are we surprised?
Harper Created the Problem
Okay, so let’s rewind to 2014 when the MMPR came out. There was a massive amount of interest in Canada to become a licensed producer – and our phone was off the hook. In the first year leading up to when the MMAR was scheduled to be dismantled, Health Canada had cherry picked a dozen companies across the country to be producers of medical marijuana under the new MMPR system. The system had the appearance of being permissive and fast moving. In early 2015 there was still a substantial interest in becoming a licensed producer. But by the summer, Health Canada was slowing down their approval process – and making it significantly more challenging to get approved. By the end of 2015 leading up to the federal election, the interest in becoming a licensed producer had flat-lined.
From my networking and conversations, my opinion is that Health Canada was under direction from the Harper Government to restrict their licensing practices, so that only “a reasonable supply” of medical marijuana would make it to market. They had no interest in stimulating the MMPR industry. MMPR applicants for commercial production were in denial that Health Canada would cap the number of producers – but towards the end of the year there were so few new licences coming out, that we all had to wonder. Health Canada had been making inquiries in the industry about “reasonable supply” of product, and their reports suggested that there was a growing amount of inventory building up in the industry among MMPR producers. So if there was a build-up of inventory, then (logically) they could slow down issuing new licences. Meanwhile, some 400 companies were in queue to become producers. Lucky for the first few dozen that made it through in the early stages; unlucky if you were applying in early 2015.
Not only were producers under the MMPR obligated to ship marijuana through the mail, they couldn’t sell face to face. They also couldn’t (and still can’t) advertise to the general public other than have a simple website describing their strains. So, here we have a fantastic product that we can’t talk about, and the point of sale is strictly online sales. How on earth would a medical marijuana industry be expected to grow in an environment like this?
The Harper Government was digging in its heels, allowing only as much constitutional freedom with marijuana as the Courts would force them to give. In truth, few producers in the MMPR produce quality product, and the few that are seem to be doing well. But Health Canada and the Harper Government significantly limited the potential for the industry to grow in a true capitalist society.
So here we have a few courageous individuals who stood up and said No – we can’t afford it, it isn’t good product, and we have the right to grow this ourselves. Today the Courts have ruled they were right.
In hindsight, the Harper Government should have encouraged a build-up of inventory in market and licensed every applicant that met sufficient standards. We would have seen market competition, ambition, and ultimately the market would have compelled the producers to make product that was the quality/variety they were looking for.
Health Canada also increased the cost of product. It’s easier, faster and more straightforward to achieve a Drug Establishment Licence handling meth precursor chemicals than it is to get a licence to cultivate marijuana in Canada. The ridiculously high standard for manufacturing and inventory management (and security precautions) for cultivating medical marijuana in Canada, have meant that only capital-rich applicants can even get through the front gate. At the end of the day, the costs in creating such “compliant” facilities has resulted in product prices for the Canadian consumer.
So yes, Health Canada has created their own problem by digging in their heels. The initial thrust to move from the MMAR to the MMPR program was cost. Simply put, Health Canada couldn’t afford to keep running the MMAR program because it was too many facilities to inspect. So the MMPR saved them money. But the licensing requirements they imposed on the industry ended up limiting the availability and affordability of medical marijuana to the Canadian consumer. Their purported reason for creating the MMPR was to create better access to medical marijuana – but they failed miserably with the MMPR as it stands today.
“The Court has concluded that … the access restrictions have not been proven to be in accordance with the principles of fundamental justice” (p.5).
So where does that leave us today? Basically, the verdict is suggesting that the MMPR will be invalid within six months if the Government doesn’t revise it to fit within our constitutional rights. The verdict didn’t say exactly how they were supposed to do this. But we can make some good guesses.
First, the verdict reasons references historical cases before this, and a prominent reference was the Smith verdict which ruled that marijuana should not be limited to just the crude (dried/unprocessed) form. The Allard verdict has mentioned that verdict many times, and specifically commented that “the regulatory restrictions in the MMPR upon individuals (including but not limited to the prohibitions against certain methods of consumption and plant growth … does not bear a connection to the objective of the legislation” (p.9) – which has implications for derivatives. I believe that other derivatives (including topical products) will be coming to Canada soon (by the Fall of this year).
Second, Health Canada will have to allow certain eligible patients to grow their own medical marijuana. Will this open for all Canadians, or just those that can’t afford it? I believe it will have to be open to all Canadians – because the verdict mentioned that affordability per se was not a necessary argument to support their constitutional ruling. In other words, while affordability is one factor in their ruling, it was not a necessary factor. Meaning that all Canadians have a constitutional right for liberty and security, not just those with less money.
Third, we’re not rewinding back to the MMAR system. “It is neither feasible nor appropriate to order the Defendant to reinstate the MMAR” (p.101) and the verdict is making room “to permit Canada to enact a new or parallel medical marihuana regime” (p.102). If I’m reading in between the lines, it means that, while people will grow their own product for medical reasons (with a permit from Health Canada), we won’t see designated growers anymore. In other words, MMAR designated growers have until August 2016 to shut down their operations.
Fourth, and perhaps this is the most important implication under the MMPR, the verdict commented on dispensaries. The verdict mentioned at one point during the evidence discussion that “dispensaries are at the heart of cannabis access” (p.58), and that “current trends in dispensary growth suggest a connection between the restrictions to access under the MMPR and the need for patients to obtain their medical marihuana from illicit sources” (p.58). To me this suggests that dispensaries of medical marijuana may be fit into the new modified MMPR to some degree.
With regards to dispensary licensing, the constitutional basis for allowing dispensaries would have to do with access. Access to quality, and access to selection. Given the comments on the current quality and selection among current licensed producers under the MMPR, I can’t see this argument changing by August. In my opinion, they are going to have to make room for dispensaries within the MMPR system.
Of course, all of this mess is landing on the new Liberal Government’s desk. They were going to overhaul it anyways. We were unsure of the timing, of course, but now there is a concrete deadline for doing something with the MMPR. They don’t have to overhaul everything, mind you, but why wouldn’t they make changes for everything they wanted if they have to change a significant portion already?
I have it on good intel that Health Canada is in consultation with stakeholders about allowing medical marijuana to be sold through pharmacies. So, products from licensed producers would be allowed to be sold through pharmacies in addition to / instead of being delivered through the mail by licensed producers. After all, this was how it was structured in the first draft of the MMPR but which never made it to the final draft. It wouldn’t be out of the question.
Marijuana dispensaries, on the other hand, have an established point of sale that is going to be hard uprooting.
I believe that the Trudeau government is now under enhanced pressure to revise the MMPR, and they’re going to make some sweeping changes. Decriminalization is probably an important early step. Allowing other dosages forms is not difficult to achieve. So from now until August, we can probably expect more dosage forms and decriminalization. I would predict that the new MMPR is going to allow for point of sale at dispensaries as well as pharmacy retail locations – with retail licensing of these storefronts. But more importantly, I suspect that Health Canada will be under enhanced pressure to stop limiting the number of producers they allow to market – and to soften the approval requirements accordingly. Sunny days ahead, I suspect.
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