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.
MMPR is repealed and the Canadian government announced new legislation to legalize cannabis for recreational use in April 2017, paving the way for the country to become the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.
Canada’s federal government has indicated it won’t interfere in how provinces decide to regulate distribution, taxation and retail – “Each province has the flexibility to design it the way they think most appropriate. Ontario has laid out their proposal. That’s within their jurisdiction to do,” Canada’s public safety minister, Ralph Goodale, told reporters, according to The Canadian Press.
Cannabis for Medical Purposes
As of May 24, 2017, there are 58 licensed producers of cannabis for medical purposes. Licensed producers are authorized to sell to registered clients who have been authorized by their healthcare practitioner to use cannabis for medical purposes. Products are delivered to clients securely through the mail or by courier.
More than 200,000 individuals are registered to purchase cannabis from licensed producers, while more than 4,000 individuals are registered with Health Canada to produce a limited amount of cannabis for their own medical purposes. On average, the number of registered clients has been growing by 10% a month. Sales of dried cannabis have been growing by 6% a month, and sales of cannabis oil have increased by 16% a month.
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, Labeling and Shipping, Registration, and Record Keeping.
As of May 2017:
- 1665 applications received
- 265 have been refused
- 428 applications are in progress
- 69 have been withdrawn
- 858 were incomplete and have been returned
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.
Cannabis for Recreational Use
The federal government’s goal is to make legalization a reality across the country before July 1, 2018.
The federal legislation, along with strict regulations, would:
- allow adults to possess up to 30 grams of legally-produced cannabis;
- allow adults to grow up to four cannabis plants per household;
- set the minimum age for purchase and use at 18 years of age, with the option for provinces to increase the age limit;
- enable a regulatory regime for the licensed production of cannabis, which would be controlled by the federal government;
- enable a regulatory regime for the distribution and sale of cannabis, which would be controlled by the provincial government; and
- establish new provisions to address drug-impaired driving, as well as making several changes to the overall legal framework to address alcohol impaired driving.
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$4.9bn and C$8.7bn annually.
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