Analysts predict Canada Cannabis industry will reach $4.5 billion by 2021
Medical cannabis was legalized 15 years ago, in 2001, and Canada’s health department estimated about 450,000 possible daily customers amounting to a $900 million industry, according to the Washington Post. Under the previous regulations, authorized patients were able to obtain a license to grow cannabis at home.
On April 1, 2014 new regulations came into effect, the Marijuana for Medical Purposes Regulations (MMPR), which replaced the previous Marijuana Medical Access Regulations (MMAR). Canada had a set up a licensing scheme whereby authorized producers produce and sell dried and fresh cannabis flower, and cannabis oil, to patients with the appropriate medical documentation.
There are currently 36 authorized licensed producers in Canada (map) and about 130,000 Canadians registered to access cannabis for the medical purposes. MMPR is repealed and the Canadian government announced new legislation to legalize cannabis for recreational use in April 2017, paving the way for the country to become the first in the G7 to fully legalize the cannabis.
The legislation divides the responsibilities of legalization between the federal and provincial governments. Ottawa will regulate production, including licensing producers and ensuring the safety of the country’s cannabis supply. The federal government has stipulated that buyers must be at least 18 years old, but provinces will be able to set a higher age limit if they wish. Those who want to grow their own cannabis will be limited to four plants per household. Canadians will be allowed to carry up to 30 grams of dried cannabis for personal use.
The federal government’s goal is to make legalization a reality across the country before July 1, 2018.
If sales begin in the mid-2018, the initial demand is estimated to be about 400,000 kilograms, or 882,000 pounds, the analysts said. Analyst predictions that the industry could eventually be worth somewhere between C$5bn and C$7bn annually.
There are many stages to the application process for becoming a licensed producer of cannabis for medical purposes:
- Applications received
- Preliminary screening (Application Checklist)
- Enhanced screening. Once an application has been assigned an application number, it will be reviewed to ensure that the level of detail included in the application is sufficient to assess the requirements of the regulations.
- Initiation of security clearance process. When applying for a licence to produce under the ACMPR, a Security Clearance Application form must be submitted.
- Pre-licence inspection. Section 21 of the ACMPR (Inspection of Site) allows for the possibility of a pre-licence inspection. This includes, but is not limited to: Security Measures, Good Production Practices, Packaging, Labelling and Shipping, Registration, and Record Keeping.
Compliance and Enforcement Actions
Health Canada conducts routine inspections of licensed producers of cannabis for medical purposes, to verify their ongoing compliance with the regulations. It is expected that licensed producers of cannabis for medical purposes will take timely and appropriate corrective actions when any issue of non-compliance with the ACMPR is brought to their attention.
The discussion paper on the issue encourages the use of taxation to “discourage the use of cannabis and provide the government with revenues to offset related costs (such as substance abuse services, law enforcement and regulatory oversight).” But it also notes the tax has to be low enough to dissuade people from buying marijuana on the black market.
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