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Medical Marijuana Licensed Producer Information - 2013

Health Canada Commercial Medical Cannabis Production

The new Medical Marihuana Regulations: solving or igniting the concerns of local governments?

April 11, 2013
Bull Housser & Tupper LLP
By Dan Bennett, Ryan Berger, James Goulden, Matt Mulligan, Kathleen T. Higgins and Brian Taylor

In December 2012, the federal government announced its plans to repeal the Marihuana Medical Access Regulations, SOR/2001-227 (the “Old Regulations”) and enact the Marihuana for Medical Purposes Regulations (the “New Regulations”) in their place.

The New Regulations, which come into force this month, attempt to address the serious public health and safety concerns of local governments, first responders and police regarding the production of marihuana in private homes.

Whether the New Regulations will actually address these issues remains to be seen. However, it is important for local governments to know what changes the New Regulations make.

The New Regulations set out a scheme by which Canadians can, with the support of an authorized health care practitioner, possess dried marihuana for their own personal medical use. Under the New Regulations, the only source of dried marihuana will be licensed commercial producers regulated by Health Canada.

Individual production licenses will be phased out and individuals with prescriptions for marihuana will be required to purchase their supply directly from a licensed commercial producer.

The New Regulations implement a licensing scheme that is intended to allow for larger-scale marihuana production, comparable to that in place for other narcotics used for medical purposes. Under the New Regulations, both individuals and corporations will be eligible to become a licensed producer.

Licensed producers must comply with a security directive issued by Health Canada for the storage of controlled substances. The production of marihuana must take place in an indoor non-residential facility which is not a dwelling unit. Furthermore, marihuana must be sold or provided to users directly through secure shipping only (the New Regulations do not allow for store-front or retail distribution centres).

The New Regulations do not expressly provide that licensed producers are subject to municipal legislation or bylaws, with one exception: the New Regulations provide that a licensed producer may only destroy cannabis if, among other requirements, it is destroyed in accordance with a method that conforms with all federal, provincial and municipal environmental legislation applicable to the place of destruction.

In order to facilitate the transition from the Old Regulations to the New Regulations, both the Old Regulations and the New Regulations will operate concurrently from April 2013 until March 31, 2014 (12 months). During that time, individuals can continue to access marihuana for medical purposes under the Old Regulations or order directly from an licensed producer (as soon as they are approved by Health Canada).

However, new individual production licenses will not be issued if the application is submitted after September 30, 2013. Further, existing individual production license holders will not be able to change the location of their production site on the license after September 30, 2013. This is to avoid situations where a person receives an individual production license as their supply option, but would not be able to produce a crop before the repeal of the Old Regulations (the time required to obtain seeds and produce a viable crop of marihuana for medical purposes is approximately six months).

As we transition from the Old Regulations to the New Regulations, local governments should consider the extent to which, and how, they can regulate medical marihuana activities under the new federal legislative regime.

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