Sector Snapshot

Medical Marijuana In Canada

Early Background

Before 2001 the Government of Canada treated marijuana production, sale and consumption as a criminal enterprise. In 2001 it introduced the Medical Marihuana Access Regulations (MMAR) under which it issued an estimated 28,000 MMAR licenses to produce to individuals who had prescriptions to treat various medical conditions. It did this because the Supreme Court of Canada had decided that access to marijuana for medical purposes in adequate supply is a constitutional right of all Canadians. This then was the law and cannot be changed by any government.

These MMAR licenses were issued to any with a prescription who applied. They permitted legal production but did not regulate quality. The product produced was to be consumed by the holder of the license and not sold.

Health Canada’s Marihuana for Medical Purposes Regulation

In 2013 Health Canada introduced the Marihuana for Medical Purposes Regulations (MMPR) to replace the MMAR. The MMPR permits legal commercial production and sale to anyone with a doctor’s prescription. Health Canada advised the public as follows.

“Treatment decisions are best made in consultation with your healthcare practitioner. Under the (MMPR) an authorized health care practitioner includes physicians in all provinces and territories and nurse practitioners in provinces and territories where prescribing dried marijuana for medical purposes is permitted under their scope of practice….The MMPR do not contain any limitations on the conditions for which a healthcare practitioner can support the use of Marijuana for medical purposes”.

The regulations aim to treat marijuana as much as possible like any other narcotic used for medical purposes by creating conditions for a new, commercial industry that is responsible for its production and distribution. The regulations will provide access to quality-controlled marihuana for medical purposes, produced under secure and sanitary conditions, to those Canadians who need it, while strengthening the safety of Canadian communities. In addition, the new regulations will also enable more choices of marijuana strains and licensed, commercial suppliers”.

Health Canada has published in a document entitled “Information for Health Care Professionals” various uses for medical marijuana. These can be summarized as palliative care, nausea and vomiting, wasting syndrome and loss of appetite in cancer patients, anorexia, multiple sclerosis, spinal cord injury, epilepsy, acute or chronic pain, osteoarthritis, dystonia, Huntington’s and Parkinson’s disease and Tourette’s syndrome; glaucoma, asthma, hypertension, anxiety and depression, sleep disorders, post-traumatic stress disorder, alcohol and opioid withdrawal, schizophrenia and psychosis; Alzheimer’s disease, dementia, inflammatory skin diseases, irritable bowel syndrome, inflammatory bowel diseases, liver disease, metabolic syndrome, obesity, diabetes and diseases of the pancreas.

Health Canada has granted 89 MMPR licenses to date. The present licensees are named on Health Canada’s website at Health Canada is reviewing approximately 300 applications including the one filed by Lotus. Approximately 850 applications have been rejected. This license requires extensive quality control plans as there are products subject to all of the quality control and record keeping regulations that food and alcoholic beverage industries maintain, for purposes of public protection and taxation. In addition they are subject to strict security requirements in order to prevent theft.

Public and Regulatory Positioning

Management plans to position Lotus as supporting a well-regulated market for medical marijuana. The government’s approach of regulation of quality control, prescription by authorized medical practitioners without restriction to specific medical uses is well founded. We believe in modifications to the distribution protocols to improve ease of access for prescription holders. This would enable better education and ensure product quality and labeling standards are met. What is prescribed and why is between the client and his medical practitioner. The Government of Canada has recognized that marijuana has a number of legitimate beneficial medical uses, and that it needs quality control as a normalized product that is similar in nature to quality controls required of the food and beverage industries.

Existing marijuana users are not accustomed to having use of this product being part of either the heavy hand of government regulation or part of the medical establishment. Lotus' management believes that users do not want to feel the restriction of rules and regulations of big government and institutionalization of its use, although product quality improvement will be readily accepted. Lotus sees itself as a friendly intermediary for users between themselves and these unwanted complexities and restrictions. Lotus will deal with intermediaries and medical practitioners closer to where these clients live, literally and figuratively.

Product Quality, Normalization and Respect

Presently product quality control, except for the few MMPR licensees, is completely lacking in the illicit market. The product is produced in illegal operations without regulatory oversight. These products may be grown in unsanitary conditions, contain mould, be sprayed with pesticides, have insects or have widely varying product qualities. This itself is a significant public health risk, and it is important that these matters are regulated to improve product quality to a standard which the Canadian public expects of the products they consume, particularly products they ingest. Consumers should be educated about the need for product quality control, and expect uncontaminated and reliably labeled products.

Lotus agrees that the use of the product should be normalized and that there are many beneficial medical uses. However, until recently, anyone wanting to use it for medical purposes was exposed to possible criminal and other legal sanctions, the risks of dealing with grey market participants, and generally a sense of being marginalized. Many mainstream Canadians who would benefit from medical marijuana will not avail themselves of the product for these reasons. Lotus believes that the people using this product deserve respect and to be able to make decisions on the use of the product in consultation with their medical practitioner. Lotus plans to engage the many heath and non-profit local community organizations to educate and promote this view.

Health Canada’s Decision to Cancel MMAR Licensees

As part of passing the MMPR, Health Canada attempted to cancel all MMAR licenses and shut these operations down as of April 1, 2014. They were thwarted in this effort by a temporary injunction issued by the Federal Court of Canada, which allowed the MMAR operations to continue pending a trial of the issues. The essential issue is whether the MMPR Licensees can meet the Supreme Court’s stated requirement that adequate supply of medical marijuana is available. As discussed below, there is not nearly adequate supply from MMPR producers yet. Accordingly, the injunction order is likely to remain in place. In our view, Health Canada will need to demonstrate that medical marijuana is easily accessible to prescription holders at affordable prices and in a variety of strains before the courts will remove the injunction and have the MMAR licenses expire. Once the MMPR is fully functioning with adequate volumes we anticipate the MMAR producers will discontinue production.