In order to cultivate, import and sell medical marijuana in Canada, a company has to achieve a licence to produce (LP) issued by Health Canada. Medical marijuana is legal on a federal level, by prescription only, and is not taxed by the government.
In Canada, the government has lost significant Supreme Court challenges, compelling the federal regulator (Health Canada) to provide reasonable access to medical marijuana to Canadians. The previous grower/designated-grower system (under the MMAR) allowed persons to grow their own plants, or grow on behalf of other people. However, in 2013 the government repealed these regulations and created a new, commercial model for cultivating and selling medical marijuana. This came into effect through the Access to Cannabis for Medical Purposes Regulations (ACMPR). As of December 13, 2016, the federal task force on marijuana has released their report on the future of cannabis in Canada. The report includes a framework for legal recreational sales at the retail level, to run parallel to the current ACMPR medical cannabis framework.
By the year 2020, Health Canada is predicting nearly 450,000 consumers of medical marijuana in Canada. Since 2013, approximately 100,000 consumers have received authorization to purchase, with the number expected to rise dramatically. The government does not regulate the retail price of medical marijuana, nor will the government cap the number of licensed producers. 2017-2018 is poised to be an immense year of growth for the medical cannabis (and recreational) industries with the opening up of retail sales of cannabis. Retail sales may start as early as late 2017.
Producers can only grow marijuana indoors and under heavy security precautions. Health Canada does not regulate the manner in which marijuana is grown otherwise, albeit to limit which fungicides can be used on the plants. End product must be tested for microbes and heavy metals, and be within the product specifications. The model was heavily adapted from a pharmaceutical approach. Producers cannot sell face to face, and must ship finished product by mail or courier (or secure transport) to the patient’s doctor or residence. Under the new task force recommendations, however, outdoor cultivation will be allowed, as also will be the manufacturing of derivatives and edibles.
To become a licensed producer, our firm provides the client with a pharmaceutical-grade manual of quality procedures required by Health Canada, as well as GPP training for the client’s employees. Our firm prepares the application materials and shepherds the entire process – including outside consultants, facility design, security protocols, and business planning. NHP Consulting has in-house expertise for security, cultivation, regulatory and quality programs.
The timeframe to become a licensed producer is 1.5 to 2 years given Health Canada’s current metrics; however, with the task force recommendations for increasing capacity, this timeframe is expected to shorten. The list of current licensed producers can be found here. Note that Canada allows the production of cannabis oil as well as the crude form (unprocessed), fresh plants and seeds.
In short, the capital investment for becoming a licensed producer is significant. A 10,000 sqft facility may require $2 million as a preliminary investment for the first 2 years of application and development. This has been a significant obstacle for companies coming to market with a medical marijuana business in the last few years, while other applicants see this as a market advantage.
Note that Canada has created the framework for allowing the export and import of medical marijuana, and Canada’s opinion on international trade of medical marijuana can be found here. Because medical marijuana is technically a controlled substance (narcotic) and not a drug (medicine), Canadian licensed producers can import/export with foreign bodies within countries that regulate medical marijuana similarly. Permits for import/export are obtained per shipment, issued as a separate process outside the facility licensing framework.
NHP Consulting has provided world-class consulting in the area of medical marijuana regulatory compliance. We work with early-stage applicants and licensed producers alike, and can help you bring a concept to reality.