March 23rd, 2015 – Growing scientific consensus on cannabis’ medicinal value has sparked the attention of
leading players in Canada’s traditional pharmaceutical industry. As Canadians increase their consumption of medicinal cannabis, former pharmaceutical executives are jumping on the bandwagon. As Greg Engel, CEO for Tilray said recently in an online essay for the Huffington Post,
“We are operating in the most advanced medical cannabis market in the world and we are poised to develop the talent and operational expertise necessary to lead the industry globally as regulations change in different jurisdictions.”
On April 1st 2014, Health Canada made effective The Marihuana for Medical Purposes Regulations (MMPR), repealing the previous Marihuana Medical Access Regulations, which had allowed individual patients to produce the crop for themselves or via a third-party. The new MMPR restricts the production of medical cannabis to “secure and sanitary conditions” as stated on the Health Canada website. This condition acts as a governmental aid to the already well-established health care companies, one of those being Tilray, to hold a virtual oligopoly on the licensed development of medical cannabis. Engels stated,
“The time is now. The fledgling Canadian medical cannabis industry needs fearless leadership, with directly relevant experience from the traditional health care sector. Up until this point, the industry has been plagued by a lack of professionalism, controversy and risk.”
By introducing these regulations the Canadian government is actively creating significant and clear barriers for small producers to operate. These barriers include weighty financial start up costs of up to $1 million to meet “the stringent quality and safety standards on production operation” as well as the bureaucratic complexities in trying to actuate the requirements.
As stated in a Health Canada Regulatory Impact Analysis Statement in 2012, the MMPR will result in a price “increase from an estimated $1.80/g to $5.00/g in the status quo to about $7.60/g in 2014”. However, the actual cost increases are closer to the $5 – $15 per gram range, putting licensed producer prices out of reach for many patients. It is increasingly becoming apparent that the new industrial production model implemented by the MMPR for dried marijuana, mirrors the pharmaceutical industry’s framework of production. The effect of this model is to reduce the affordability of medicinal cannabis plus creates a barrier for smaller companies to participate in this rapidly emerging industry. Under the MMAR system there were over 30,000 card-holders eligible to grow their own medicine. Health Canada’s web site lists 16 licensed producers under the MMPR system.
As constitutional challenges addressing cost barriers wind their way through the Supreme Court of Canada, time will soon tell whether the corporate takeover of Canada’s medical cannabis industry will leave room for small growers or shut them and their patients out entirely.