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The Marihuana for Medical Purposes Regulations and the Debut of a New Industry in Canada

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Life Sciences Bulletin

According to statistics gathered by Health Canada, medical use of marihuana has grown exponentially, from as little as 100 authorized persons in 2001 to nearly 40,000 today. In order to prevent abuses made under the Marihuana Medical Access Program and to protect public health, safety and security, the federal government recently adopted, on the recommendation of Health Canada, the Marihuana for Medical Purposes Regulations (the "MMPR") pursuant to the Controlled Drugs and Substances Act. These regulations are bringing tremendous changes to the way Canadian patients can now access marihuana for medical purposes, and allow for the creation of a system of production and distribution, namely a controlled Canadian industry of marihuana for medical purposes.

The MMPR aim to treat marihuana as closest to any other narcotic used for medical purposes; the high standards imposed to the licensed producers therefore being a logical consequence of this new regime. Although the proposed medical marihuana industry is strictly circumscribed by the new MMPR, several companies see a unique business opportunity and are actively seeking their piece of the pie. Companies contemplating this avenue should carefully assess their business opportunity, taking into consideration the obvious market risk of a such a burgeoning industry and perhaps even more importantly the substantial costs associated to complying with the new regulatory regime.

The New Marihuana Medical Access Regime

Before April 1, 2014, the Marihuana Medical Access Program permitted licenced individuals to produce marihuana in private dwellings. This procedure showed a lack of quality-controlled conditions and security. Under the new MMPR, the only way for a patient to access marihuana for medical purposes is to obtain it through commercial licensed producers. At the time of writing this bulletin, thirteen (13) companies had been authorized. The activities of these licensed producers are regulated by Health Canada and are subject, among others, to security measures, clearances, inspections and Good Production Practices.

Accordingly, the onus is now on the licensed producers to verify the identity of the patient and the validity of the medical document (i.e. prescription signed by a healthcare practitioner). The licensed producers must ensure that the medical document accompanying an application to become a registered client contains all information required by the regulations regarding the identification of the client and the healthcare practitioner, the prescribed daily quantity of dried marihuana and the period of use. Not only do the licensed producers have to verify the content of the medical document, they must also ensure that the healthcare practitioner is entitled to practice and is not named in a notice issued under the Narcotic Control Regulations. They must also confirm with the practitioner's office that the consultation took place and that the medical document is correct and complete.

Moreover, producers have to comply with Good Production Practices to ensure that authorized Canadians have access to marihuana that is grown and processed under secure and sanitary conditions. Licensed producers have to meet security and quality standards regarding premises, equipment, microbial and chemical contaminants, pest control products, etc. Most importantly, licensed producers must implement a sanitization program as well as standard operating procedures. An employee must be assigned to Quality Assurance, and this employee must be qualified to oversee the activities and ensure that these programs are respected. They must also keep a record of every adverse reactions declared and establish an efficient control and recall system.

As in the case of other health products, Health Canada is empowered to inspect the licensed producers' sites. According to Health Canada, the inspectors are highly qualified and especially trained by to enforce the MMPR. Said inspectors may visit a site at any business hour to validate the accuracy of the information submitted to Health Canada and to audit licensed producers' compliance during daily operations. Health Canada is taking its role very seriously and in fact has already identified issues that resulted in a voluntary recall from at least one licensed producer.

The Federal Court Interim Decision in Allard et al.

For the sake of easing the transition from the former Marihuana Medical Access Program to the new regime, a transition phase was implemented and ended on March 31, 2014. Among other things, the individual producers were required to destroy or dispose of their plants and declare to Health Canada that they were no longer in possession of any marihuana. However, as a result of ongoing litigation and uncertainty arising from court proceedings, Health Canada will treat the licences issued under the former program and extending beyond March 31, 2014 until a final decision is rendered in Allard et al. v. Her Majesty the Queen in Right of Canada, as per the Federal Court interim decision of March 21st, 2014.

Because of Allard et al., licensed producers may have to wait a little longer before 40,000 potential clients line-up to register with their companies. This is a very good opportunity to ensure that they have all in place to respond to a large demand while effectively adhering to the MMPR and the regulatory aspects of the new marihuana medical access regime.


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