Vol. 147, No. 13 — June 19, 2013

Registration

SOR/2013-119 June 7, 2013

CONTROLLED DRUGS AND SUBSTANCES ACT

Marihuana for Medical Purposes Regulations

P.C. 2013-645 June 6, 2013

Whereas a provision of the annexed Regulations provides for the communication of information obtained under the Regulations to certain classes of persons referred to in paragraph 55(1)(s) of the Controlled Drugs and Substances Act (see footnote a) and, in the opinion of the Governor in Council, it is necessary to communicate that information to those classes of persons for the proper administration or enforcement of the Act and the Regulations;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Health, pursuant to subsection 55(1) of the Controlled Drugs and Substances Act (see footnote b), makes the annexed Marihuana for Medical Purposes Regulations.

TABLE OF CONTENTS

(This table is not part of the Regulations.)

MARIHUANA FOR MEDICAL PURPOSES REGULATIONS

INTERPRETATION
POSSESSION
GENERAL PROVISIONS

PART 1

LICENSED PRODUCERS

DIVISION 1

PERMITTED ACTIVITIES AND GENERAL OBLIGATIONS
DIVISION 2

LICENSING
DIVISION 3

SECURITY MEASURES
General

41. Compliance with security measures

42. Unauthorized access

Perimeter of Site

43. Visual monitoring

44. Intrusion detection system

45. Monitoring by personnel

Areas Within a Site where Cannabis is Present

46. Restricted access

47. Physical barriers

48. Visual monitoring

49. Intrusion detection system

50. Filtration of air

51. Monitoring by personnel

DIVISION 4

GOOD PRODUCTION PRACTICES

52. Prohibition — sale or provision

53. Microbial and chemical contaminants

54. Pest control product

55. Premises

56. Equipment

57. Sanitation program

58. Standard operating procedures

59. Recall

60. Quality assurance

61. Sample of lot or batch

62. Recall reporting

63. Adverse reactions

DIVISION 5

PACKAGING, LABELLING AND SHIPPING

64. Packaging

65. Weight of dried marihuana

66. Product label

67. Client label

68. Combined label

69. Department of Health document

70. Presentation of information — label

71. Expiry date

72. Reference to Acts or regulations

73. Shipping

DIVISION 6

IMPORT AND EXPORT

74. Application for import permit

75. Issuance of import permit

76. Refusal to issue import permit

77. Provision of copy of import permit

78. Declaration after release from customs

79. Transportation of marihuana

80. Suspension of import permit

81. Revocation of import permit

82. Application for export permit

83. Issuance of export permit

84. Refusal to issue export permit

85. Provision of copy of export permit

86. Declaration after export

87. Suspension of export permit

88. Revocation of export permit

DIVISION 7

SECURITY CLEARANCES

89. Eligibility

90. Application for security clearance

91. Checks

92. Minister’s decisions

93. Outstanding criminal charge

94. Refusal to grant security clearance

95. Validity period

96. Security clearance no longer required

97. Suspension of security clearance

98. New applications

99. Sending of notices by Minister

100. False or misleading information

DIVISION 8

COMMUNICATION OF INFORMATION

101. Information concerning clients and responsible individuals

102. Information concerning health care practitioners

103. Information concerning licensed producers

104. Information concerning import or export permit

105. Providing information to foreign organizations

106. Security clearance — Minister

PART 2

CLIENT REGISTRATION AND ORDERING

REGISTRATION

107. Eligibility

108. Registration application

109. Health care practitioner’s consent to receive dried marihuana

110. Verification of medical document

111. Registration of client

112. Expiry of registration

113. Refusal to register

114. Notice — refusal to register

115. Application to amend registration

116. Amendment

117. Cancellation of registration

118. Prohibition — transfer of medical document

NEW MEDICAL DOCUMENT

119. New application

120. Applicable provisions

PROCESSING AN ORDER

121. Order required

122. Shipping

123. Refusal

124. Thirty-day limit

PART 3

CLIENTS AND OTHER AUTHORIZED USERS

125. Proof of authority to possess

126. Prohibition — obtaining from more than one source

127. Return

PART 4

HEALTH CARE PRACTITIONERS

128. Authorized activities

129. Medical document

130. Thirty-day limit

PART 5

SALE OR PROVISION BY A LICENSED PRODUCER TO A PERSON OTHER THAN A CLIENT

131. Order required — cannabis

132. Shipping

133. Refusal

PART 6

RECORD KEEPING BY LICENSED PRODUCERS

TRANSACTIONS

134. Cannabis received

135. Imported marihuana

136. Exported marihuana

137. Record of verbal order

138. Filling of order from client

139. Dried marihuana returned by client

140. Order from person other than client

CLIENT REGISTRATIONS

141. Information

SECURITY, PRODUCTION AND INVENTORY

142. Security

143. Good production practices and packaging, labelling and shipping

144. Propagated, sown, harvested, dried, packaged and destroyed marihuana

145. Destroyed cannabis

146. Inventory

NOTICES TO LOCAL AUTHORITIES

147. Notices

GENERAL OBLIGATIONS

148. Manner of keeping records

149. Information required by Minister

150. Former licensed producers

PART 7

CONSEQUENTIAL AMENDMENTS, TRANSITIONAL PROVISIONS, REPEAL AND COMING INTO FORCE

CONSEQUENTIAL AMENDMENTS

200–228. Narcotic Control Regulations

229–250. Marihuana Medical Access Regulations

251–252. New Classes of Practitioners Regulations

TRANSITIONAL PROVISIONS
Interpretation

253. Definitions

Registration Based on an Authorization to Possess

254. Applicable period

255. Registration based on authorization to possess

256. Modified application of Regulations

Registration Based on a Medical Declaration

257. Applicable period

258. Registration based on medical declaration

259. Modified application of Regulations

Sale or Provision of Marihuana to Licensed Producer

260. Applicable period

Sale or Provision by Holder of a Personal-use Production Licence

261. Authorized sale

262. Application for authorization

263. Verification by Minister

Sale or Provision by Holder of a Designated-person Production Licence

264. Authorized sale

265. Application for authorization

266. Verification by Minister

REPEAL

267. Repeal

COMING INTO FORCE

268. Registration

MARIHUANA FOR MEDICAL PURPOSES REGULATIONS

INTERPRETATION

Definitions

1. (1) The following definitions apply in these Regulations.

Miscellaneous rules

(2) The rules set out in subsections (3) to (6) apply in these Regulations.

Producer’s site

(3) A reference to the site of a licensed producer is a reference to the site specified in the producer’s licence.

Destruction

(4) Cannabis is destroyed when it is altered or denatured to such an extent that its consumption is rendered impossible or improbable.

Drying

(5) The production of marihuana includes subjecting it to a drying process.

Transfer

(6) For greater certainty, a reference to “provide” includes “transfer”.

Application of Narcotic Control Regulations

2. For greater certainty, except in the case of inconsistency with these Regulations, the Narcotic Control Regulations also apply to cannabis referred to in these Regulations.

POSSESSION

Obtaining dried marihuana or cannabis

3. (1) A person listed in subsection (2) may possess dried marihuana and a person listed in subsection (3) may possess cannabis if the person has obtained it

Possession — dried marihuana

(2) The following persons may possess dried marihuana:

Possession — cannabis

(3) The following persons may possess cannabis:

Employee, agent or mandatary — dried marihuana

(4) A person may possess dried marihuana if the person is an employee of or is acting as the agent or mandatary for a person referred to in paragraph (2)(b) or (c), while acting in the course of their employment or their role as agent or mandatary.

Employee, agent or mandatary — cannabis

(5) A person may possess cannabis if the person is an employee of or is acting as the agent or mandatary for a person referred to in paragraph (3)(a) or (b), while acting in the course of their employment or their role as agent or mandatary.

Providing assistance

(6) While in the presence of a person referred to in paragraph (2)(a) who has obtained dried marihuana for their own medical purposes, another person may, for the purpose of providing assistance in the administration of marihuana to the person who obtained it, possess a quantity of that dried marihuana not exceeding the daily quantity of dried marihuana that the person who obtained it is authorized to possess in accordance with section 5.

Obtaining cannabis — Narcotic Control Regulations

4. (1) A licensed producer may possess cannabis that they have obtained in accordance with the Narcotic Control Regulations if they require it for their business.

Employee, agent or mandatary

(2) A person may possess cannabis referred to in subsection (1) if the person is an employee of or is acting as the agent or mandatary of the licensed producer, while acting in the course of their employment or their role as agent or mandatary.

Possession limit

5. An individual who obtains dried marihuana for their own medical purposes or for those of another individual for whom they are responsible must not possess a quantity of dried marihuana that exceeds the least of the following amounts:

GENERAL PROVISIONS

Dried marihuana

6. (1) Dried marihuana must not be sold or provided under these Regulations

Definition of “additive”

(2) For the purpose of paragraph (1)(a), “additive” means anything other than dried marihuana, except for any residue of a pest control product that is not in excess of the limit referred to in subsection 54(2).

Notice of refusal or revocation

7. If the Minister proposes to refuse to issue, amend or renew a licence or permit or proposes to revoke a licence or permit under these Regulations, other than in the case of a revocation under section 35 or subsection 37(4), 81(1) or 88(1), the Minister must

Further information

8. The Minister may, on receiving an application made under these Regulations, require the submission of any further information that pertains to the information contained in the application and that is necessary for the Minister to process the application.

Inspection of site

9. In order to confirm any information submitted in support of an application for a licence or an amendment or renewal of a licence made under these Regulations, an inspector may, at a time during normal business hours and with the reasonable assistance of the applicant, inspect the site in respect of which the application was made.

Police enforcement

10. If, under the Controlled Drugs and Substances Act (Police Enforcement) Regulations, a member of a police force or a person acting under the direction and control of the member is, in respect of the conduct of the member or person, exempt from the application of subsection 4(2) or section 5, 6 or 7 of the Act, the member or person is, in respect of that conduct, exempt from the application of these Regulations.

Alteration of documents

11. It is prohibited to mark, alter or deface in any manner a licence or permit issued under these Regulations or a medical document.

PART 1

LICENSED PRODUCERS

DIVISION 1

PERMITTED ACTIVITIES AND GENERAL OBLIGATIONS

Activities

12. (1) Subject to subsections (2) to (7) and to the other provisions of these Regulations, a licensed producer may

Restriction — cannabis

(2) A licensed producer may sell or provide a substance referred to in subsection (3) to

Substances

(3) The substances that may be sold or provided under subsection (2) are

Restriction — dried marihuana

(4) A licensed producer may

Activities limited

(5) A licensed producer may conduct an activity referred to in subsection (1), (2) or (4) if the producer

Import

(6) A licensed producer may import marihuana if they do so in accordance with an import permit issued under section 75.

Export

(7) A licensed producer may

Dwelling place

13. A licensed producer must not conduct any activity referred to in section 12 at a dwelling place.

Indoor activities only

14. A licensed producer must produce, package or label marihuana only indoors and at the producer’s site.

Indoor storage only

15. (1) A licensed producer must store cannabis only indoors and at the producer’s site.

Storage of dried marihuana

(2) A licensed producer must store cannabis, other than marihuana plants, in accordance with the Security Directive.

Identification of licensed producer

16. A licensed producer must include their name, as set out in their licence, on all the means by which the producer identifies themself in relation to cannabis, including advertising, product labels, orders, shipping documents and invoices.

Responsible person in charge present

17. A licensed producer must not perform a transaction involving cannabis unless the responsible person in charge or, if applicable, the alternate responsible person in charge is physically present at the producer’s site.

Safekeeping during transportation

18. A licensed producer must, when transporting imported marihuana between the port of entry into Canada and the producer’s site, or when shipping, delivering or transporting any marihuana, including to a port of exit from Canada, take any steps that are necessary to ensure its safekeeping during transportation.

Report of loss or theft

19. If a licensed producer experiences a theft of cannabis or an unusual waste or disappearance of cannabis that cannot be explained on the basis of normally accepted business activities, the licensed producer must

Destruction

20. (1) A licensed producer may destroy cannabis only if they do so

Witness to destruction

(2) The following persons are qualified to witness the destruction of cannabis:

Transportation of cannabis

(3) If the cannabis is to be destroyed at a location other than the licensed producer’s site, the senior person in charge, the responsible person in charge or, if applicable, the alternate responsible person in charge must accompany the cannabis to the location at which it is to be destroyed.

DIVISION 2

LICENSING

Eligible persons

21. The following persons are eligible to apply for a producer’s licence:

Senior person in charge and responsible person in charge

22. (1) A licensed producer must designate

Alternate responsible person in charge

(2) A licensed producer may designate one or more alternate responsible persons in charge to work at the licensed producer’s site and have authority to replace the responsible person in charge when that person is absent.

Eligibility

(3) The senior person in charge, the responsible person in charge and, if applicable, the alternate responsible person in charge

Application for licence

23. (1) To apply for a producer’s licence, a person must submit to the Minister an application that contains the following information:

Multiple sites

(2) If the applicant intends to engage in an activity referred to in subsection 12(1) at more than one site, a separate application must be made for each proposed site.

Statement by signatory

(3) An application for a producer’s licence must

Accompanying documents

(4) An application for a producer’s licence must be accompanied by

Security clearance required

24. The following persons must hold a security clearance:

Issuance of licence

25. Subject to section 26, the Minister must, after examining the information and documents required under section 23 and, if applicable, section 8, and after all of the security clearances required by section 24 have been granted under section 92, issue to the applicant a producer’s licence that indicates

Grounds for refusal

26. (1) The Minister must refuse to issue, renew or amend a producer’s licence in the following cases:

Exception

(2) Unless it is necessary to do so to protect public health, safety or security, including preventing cannabis from being diverted to an illicit market or use, the Minister must not refuse to issue, renew or amend a licence under paragraph (1)(d) or (g) if the applicant has carried out, or signed an undertaking to carry out, the necessary corrective measures to ensure compliance with the Act and its regulations and the Food and Drugs Act.

Failure to comply with undertaking

(3) If an applicant fails to comply with an undertaking referred to in subsection (2), the Minister must refuse to issue, renew or amend the licence.

Period of validity

27. A producer’s licence is valid until the earlier of

Application for renewal

28. (1) To apply to renew their licence, a licensed producer must submit to the Minister an application that contains the following:

Renewal

(2) Subject to section 26, the Minister must, after examining the information and documents required under subsection (1) and, if applicable, section 8, issue a renewed licence that contains the information set out in paragraphs 25(a) to (k).

Simultaneous processing of applications

(3) If a licensed producer submits an application under section 29 or paragraph 30(1)(a) together with an application under subsection (1), the Minister may process them together.

Application for amendment

29. (1) A licensed producer proposing to amend the content of their licence must provide the Minister with the following documents:

Statement by signatory

(2) The application must

Issuance

(3) Subject to section 26, the Minister must, after examining the information and documents required under this section and, if applicable, section 8, amend the licence accordingly and may add any conditions that the licence holder must meet in order to

Notice to Minister — change of personnel

30. (1) A licensed producer must

Accompanying information

(2) The licensed producer must, with the application for approval referred to in paragraph (1)(a), provide the Minister with the following information and documents with respect to the new person:

Notice to Minister — responsible person in charge

(3) A licensed producer must notify the Minister not later than the next business day if the responsible person in charge ceases to carry out their duties and there is no person designated as an alternate responsible person in charge.

Notice to Minister — various changes

31. A licensed producer must, within five days after the change, notify the Minister of any change to

Statement by signatory of notice

32. An application or notification made under section 30 or 31 must

Suspension

33. (1) The Minister must suspend a producer’s licence without prior notice in respect of any or all activities or substances set out in the licence if the Minister has reasonable grounds to believe that it is necessary to do so to protect public health, safety or security, including preventing cannabis from being diverted to an illicit market or use.

Notice of suspension

(2) The suspension takes effect as soon as the Minister notifies the licensed producer of the decision to suspend and provides a written report that sets out the reasons for the suspension.

Opportunity to be heard

(3) The licensed producer may, within 10 days after receipt of the notice, provide the Minister with reasons why the suspension is unfounded.

Ceasing of suspended activities

(4) If a licence is suspended in respect of any or all activities or substances set out in the licence, the licensed producer must cease conducting those activities with respect to those substances for the duration of the suspension.

Reinstatement of licence

(5) The Minister must, by notice to the licensed producer, reinstate a licence, in respect of any or all activities or substances affected by the suspension, if the licensed producer demonstrates to the Minister that

Revocation following suspension

34. The Minister must revoke a licence if the licensed producer fails to comply with the decision of the Minister to suspend the licence under section 33 or if the failure that gave rise to the suspension is not rectified.

Revocation — lost or stolen licence

35. The Minister must revoke a producer’s licence on being notified by the licensed producer that the licence has been lost or stolen.

Revocation — other grounds

36. (1) Subject to subsection (2), the Minister must revoke a producer’s licence in the following circumstances:

Exceptions

(2) Unless it is necessary to do so to protect public health, safety or security, including preventing cannabis from being diverted to an illicit market or use, the Minister must not revoke a producer’s licence in the circumstances described in paragraph (1)(a) or (b) if the licensed producer has carried out, or signed an undertaking to carry out, the necessary corrective measures to ensure compliance with the Act and its regulations and the Food and Drugs Act.

Failure to comply with undertaking

(3) If the licensed producer fails to comply with an undertaking referred to in subsection (2), the Minister must revoke the licence.

Notice of cessation of activities

37. (1) A licensed producer who intends to cease conducting activities at their site — whether before or on the expiry of their licence — must submit to the Minister a written notice to that effect at least 30 days before ceasing those activities.

Content of notice

(2) The notice must be signed and dated by the senior person in charge and contain the following information:

Update

(3) After having ceased the activities, the licensed producer must submit to the Minister a detailed update of the information referred to in paragraphs (2)(a) to (d), if it differs from what was set out in the notice submitted under subsection (1). The update must be signed and dated by the senior person in charge.

Return and revocation of licence

(4) If the activities are ceased before the expiry of the licence, the licensed producer must return to the Minister the original of the licence. The Minister must then revoke the licence.

Notice to local authorities – licence application

38. (1) Before submitting an application for a producer’s licence to the Minister under section 23, the applicant must provide a written notice to the following persons in the area in which the site referred to in paragraph 23(1)(b) is located:

Content of notice

(2) The notice must contain the following information:

Senior official

(3) The notice must be addressed to a senior official of the local authority to whom it is sent.

Notice to local authorities — amendment application

39. (1) Before submitting a licence amendment application to the Minister under section 29 concerning a change referred to in subsection (2), a licensed producer must provide a written notice to the persons referred to in paragraphs 38(1)(a) to (c) in the area in which the site to be specified in the amended licence is located.

Applicable changes

(2) Subsection (1) applies in respect of an application to amend a licence to change

Content of notice

(3) The notice must contain the following information:

Senior official

(4) The notice must be addressed to a senior official of the local authority to whom it is sent.

Notice to local authorities — various matters

40. (1) Within 30 days after the issuance, renewal, amendment, suspension, reinstatement or revocation of its licence, a licensed producer must provide a written notice to the persons referred to in paragraphs 38(1)(a) to (c) in the area in which the site specified in the licence is located and provide a copy of the notice to the Minister.

Content of notice

(2) The notice must contain the following information:

Senior official

(3) The notice must be addressed to a senior official of the local authority to whom it is sent.

DIVISION 3

SECURITY MEASURES

General

Compliance with security measures

41. A licensed producer must ensure that the security measures set out in this Division are carried out.

Unauthorized access

42. The licensed producer’s site must be designed in a manner that prevents unauthorized access.

Perimeter of Site

Visual monitoring

43. (1) The perimeter of the licensed producer’s site must be visually monitored at all times by visual recording devices to detect any attempted or actual unauthorized access.

Visual recording devices

(2) The devices must, in the conditions under which they are used, be capable of recording in a visible manner any attempted or actual unauthorized access.

Intrusion detection system

44. The perimeter of the licensed producer’s site must be secured by an intrusion detection system that operates at all times and that allows for the detection of any attempted or actual unauthorized access to or movement in the site or tampering with the system.

Monitoring by personnel

45. (1) The system must be monitored at all times by personnel who must determine the appropriate steps to be taken in response to the detection of any occurrence referred to in section 43 or 44.

Record of detected matters

(2) If any such occurrence is detected, the personnel must make a record of

Areas Within a Site where Cannabis is Present

Restricted access

46. (1) Access to areas within a site where cannabis is present (referred to in sections 46 to 50 as “those areas”) must be restricted to persons whose presence in those areas is required by their work responsibilities.

Responsible person in charge present

(2) The responsible person in charge or, if applicable, the alternate responsible person in charge must be physically present while other persons are in those areas.

Record

(3) A record must be made of the identity of every person entering or exiting those areas.

Physical barriers-

47. Those areas must include physical barriers that prevent unauthorized access.

Visual monitoring

48. (1) Those areas must be visually monitored at all times by visual recording devices to detect illicit conduct.

Visual recording devices

(2) The devices must, in the conditions under which they are used, be capable of recording in a visible manner illicit conduct.

Intrusion detection system

49. Those areas must be secured by an intrusion detection system that operates at all times and that allows for the detection of any attempted or actual unauthorized access to or movement in those areas or tampering with the system.

Filtration of air

50. Those areas must be equipped with a system that filters air to prevent the escape of odours and, if present, pollen.

Monitoring by personnel

51. (1) The intrusion detection system must be monitored at all times by personnel who must determine the appropriate steps to be taken in response to the detection of any occurrence referred to in section 48 or 49.

Record of detected matters

(2) If any such occurrence is detected, the personnel must make a record of

DIVISION 4

GOOD PRODUCTION PRACTICES

Prohibition — sale or provision

52. (1) A licensed producer must not sell or provide dried marihuana under subsection 12(4) unless the requirements of this Division have been met.

Prohibition — export

(2) A licensed producer must not export dried marihuana unless the requirements of this Division have been met.

Microbial and chemical contaminants

53. (1) The microbial and chemical contaminants of dried marihuana must be within generally accepted tolerance limits for herbal medicines for human consumption, as established in any publication referred to in Schedule B to the Food and Drugs Act.

Analytical testing

(2) Analytical testing for those contaminants and for the percentages of delta-9-tetrahydrocannabinol and cannabidiol referred to in these Regulations must be conducted using validated methods.

Pest control product

54. (1) Marihuana must not be treated — before, during or after the drying process — with a pest control product that has not been registered under the Pest Control Products Act for use on marihuana for medical purposes.

Residue

(2) Dried marihuana must not contain any residue of a pest control product in excess of any maximum residue limit specified for the product under section 9 of the Pest Control Products Act.

Premises

55. (1) Dried marihuana must be produced, packaged, labelled and stored in premises that are designed, constructed and maintained in a manner that permits those activities to be conducted under sanitary conditions, and in particular that

Storage

(2) Dried marihuana must be stored under conditions that will maintain its quality.

Equipment

56. Dried marihuana must be produced, packaged, labelled and stored using equipment that is designed, constructed, maintained, operated and arranged in a manner that

Sanitation program

57. Dried marihuana must be produced, packaged, labelled and stored in accordance with a sanitation program that sets out

Standard operating procedures

58. Dried marihuana must be produced, packaged, labelled and stored in accordance with standard operating procedures that are designed to ensure that those activities are conducted in accordance with the requirements of this Division.

Recall

59. A licensed producer must establish and maintain a system of control that permits the rapid and complete recall of every lot or batch of dried marihuana that has been made available for sale.

Quality assurance

60. (1) A licensed producer must

Methods and procedures

(2) Dried marihuana must be produced, packaged, labelled and stored using methods and procedures that, prior to their implementation, have been approved by a quality assurance person.

Approval prior to sale

(3) Every lot or batch of dried marihuana must be approved by a quality assurance person before it is made available for sale.

Returns

(4) Dried marihuana that is sold or provided under subsection 12(4) and subsequently returned to the licensed producer must not be resold or provided again.

Sample of lot or batch

61. (1) Subject to subsection (3), if the Minister has reasonable grounds to believe that a lot or batch of dried marihuana made available for sale or provision by a licensed producer may — by reason of the manner in which it was produced, packaged, labelled or stored — pose a risk to the health of an individual who in accordance with these Regulations obtains the dried marihuana for their own medical purposes, the Minister may require the licensed producer to provide the Minister with a sample of that lot or batch.

Quantity

(2) The sample must be of sufficient quantity to enable a determination of whether the lot or batch of dried marihuana meets the requirements of sections 53 and 54.

Period

(3) The Minister must not require a sample to be provided if more than one year has elapsed after the date of the last sale or provision of any portion of the lot or batch of dried marihuana.

Recall reporting

62. A licensed producer who commences a recall of dried marihuana must provide the Minister with the following information in respect of the recalled dried marihuana within three days after the day on which the recall is commenced:

Adverse reactions

63. (1) A licensed producer who sells or provides dried marihuana must provide the Minister with a case report for each serious adverse reaction to the dried marihuana, within 15 days after the day on which the producer becomes aware of the reaction.

Summary report

(2) A licensed producer who sells or provides dried marihuana must annually prepare and maintain a summary report that contains a concise and critical analysis of all adverse reactions to the dried marihuana that have occurred during the previous 12 months.

Provide Minister with report on request

(3) If, after reviewing a case report provided under subsection (1) or after reviewing any other safety data relating to the dried marihuana, the Minister has reasonable grounds to believe that the dried marihuana may — by reason of the manner in which it was produced, packaged, labelled or stored — pose a risk to the health of an individual who in accordance with these Regulations obtains the dried marihuana for their own medical purposes, the Minister may request that, within 30 days after the day on which the request is received, the licensed producer

Definitions

(4) The following definitions apply in this section.

DIVISION 5

PACKAGING, LABELLING AND SHIPPING

Packaging

64. A licensed producer who sells or provides dried marihuana under subsection 12(4) must ensure that

Weight of dried marihuana

65. A licensed producer who sells or provides dried marihuana under subsection 12(4) must ensure that the net weight of the dried marihuana in the immediate container is not less than 95% and not more than 101% of the net weight specified on the label in accordance with subparagraph 66(c)(v).

Product label

66. A licensed producer who sells or provides dried marihuana under subsection 12(4) must ensure that the immediate container carries a label that contains the following information:

Client label

67. A licensed producer who sells or provides dried marihuana to a client or an individual who is responsible for the client must ensure that

Combined label

68. In the case of dried marihuana to be sold or provided to a client or an individual who is responsible for the client, the information required under section 66 and paragraph 67(a) may be set out on one label.

Department of Health document

69. A licensed producer who sells or provides dried marihuana under subsection 12(4) must ensure that each shipment of the dried marihuana is accompanied by a copy of the current version of the document entitled Information on the Use of Marihuana for Medical Purposes, published by the Department of Health.

Presentation of information — label

70. (1) All information that is required under section 66 and paragraph 67(a) to appear on a label must be

Presentation of information — document

(2) All information in a document that is required under paragraph 67(b) or section 69 must be in English and in French and readily discernible under the customary conditions of use.

Expiry date

71. (1) A licensed producer must not include an expiry date on a label referred to in section 66 unless

Definition of “expiry date”

(2) For the purpose of subsection (1) and subparagraph 66(c)(viii), “expiry date” means the date, expressed at minimum as a year and month, that is the end of the stability period.

Reference to Acts or regulations

72. It is prohibited to include a reference, direct or indirect, to the Act, the Food and Drugs Act or any regulations made under those Acts on a label of or in an advertisement for dried marihuana unless the reference is a specific requirement of either of those Acts or those regulations.

Shipping

73. (1) A licensed producer who ships dried marihuana to a person referred to in subsection 12(2) or (4) must

Shipping — cannabis other than dried marihuana

(2) A licensed producer who ships cannabis other than dried marihuana to a person referred to in subsection 12(2) must

DIVISION 6

IMPORT AND EXPORT

Application for import permit

74. (1) To apply for a permit to import marihuana, a licensed producer must submit the following information to the Minister:

Statement by signatory

(2) An application for an import permit must

Issuance of import permit

75. (1) Subject to section 76, the Minister must, after examining the information and documents required under section 74 and, if applicable, section 8, issue to the licensed producer an import permit that indicates:

Duration of permit

(2) An import permit is valid until the earliest of

Validity

(3) A permit issued under this section is valid only for the importation in respect of which it is issued.

Refusal to issue import permit

76. The Minister must refuse to issue an import permit if

Provision of copy of import permit

77. On request of a customs officer, the holder of an import permit must provide a copy of the permit to the customs office, sufferance warehouse or bonded warehouse, as the case may be, at the port of entry into Canada at the time of importation.

Declaration after release from customs

78. The holder of an import permit must provide the Minister, within 15 days after the day of release, in accordance with the Customs Act, of a shipment that contains marihuana, with a declaration that contains the following information:

Transportation of marihuana

79. The holder of an import permit must ensure that, after the imported marihuana clears customs, it is transported directly to the site specified in their producer’s licence.

Suspension of import permit

80. (1) The Minister must suspend an import permit without prior notice if

Notice of suspension

(2) The suspension takes effect as soon as the Minister notifies the permit holder of the decision to suspend and provides a written report that sets out the reasons for the suspension.

Opportunity to be heard

(3) The permit holder may, within 10 days after receipt of the notice, provide the Minister with reasons why the suspension is unfounded.

Revocation of import permit

81. (1) The Minister must revoke an import permit

Other revocation circumstances

(2) Subject to subsection (3), the Minister must revoke an import permit in the following circumstances:

Exceptions

(3) Unless it is necessary to do so to protect public health, safety or security, including preventing the marihuana from being diverted to an illicit market or use, the Minister must not revoke an import permit in the circumstances described in paragraph (2)(b) or 36(1)(a) or (b) if the permit holder has carried out, or signed an undertaking to carry out, the necessary corrective measures to ensure compliance with the Act and its regulations and the Food and Drugs Act.

Failure to comply with undertaking

(4) If the licensed producer fails to comply with an undertaking mentioned in subsection (3), the Minister must revoke the permit.

Revocation following suspension

(5) The Minister must revoke a permit if the licensed producer fails to comply with the decision of the Minister to suspend the permit under section 80 or if the situation giving rise to the suspension is not rectified.

Application for export permit

82. (1) To apply for a permit to export marihuana, a licensed producer must submit the following information and statements to the Minister:

Accompanying document

(2) An application for an export permit must be accompanied by a copy of the import permit issued by a competent authority in the country of final destination that sets out the name and address of the site of the importer in the country of final destination.

Statement by signatory

(3) An application for an export permit must

Issuance of export permit

83. (1) Subject to section 84, the Minister must, after examining the information and documents required under section 82 and, if applicable, section 8, issue an export permit to the licensed producer that indicates:

Duration of permit

(2) An export permit is valid until the earliest of

Validity

(3) A permit issued under this section is valid only for the exportation in respect of which it is issued.

Refusal to issue export permit

84. The Minister must refuse to issue an export permit if

Provision of copy of export permit

85. On request of a customs officer, the holder of an export permit must provide a copy of the permit to the customs office, sufferance warehouse or bonded warehouse, as the case may be, at the port of exit from Canada at the time of exportation.

Declaration after export

86. The holder of an export permit must provide the Minister, within 15 days after the day on which a shipment that contains marihuana is exported, with a declaration that contains the following information:

Suspension of export permit

87. (1) The Minister must suspend an export permit without prior notice if

Notice of suspension

(2) The suspension takes effect as soon as the Minister notifies the permit holder of the decision to suspend and provides a written report that sets out the reasons for the suspension.

Opportunity to be heard

(3) The permit holder may, within 10 days after receipt of the notice, provide the Minister with reasons why the suspension is unfounded.

Revocation of export permit

88. (1) The Minister must revoke an export permit

Other revocation circumstances

(2) Subject to subsection (3), the Minister must revoke an export permit in the following circumstances:

Exceptions

(3) Unless it is necessary to do so to protect public health, safety or security, including preventing the marihuana from being diverted to an illicit market or use, the Minister must not revoke an export permit in the circumstances described in paragraph (2)(b) or 36(1)(a) or (b) if the permit holder has carried out, or signed an undertaking to carry out, the necessary corrective measures to ensure compliance with the Act and its regulations and the Food and Drugs Act.

Failure to comply with undertaking

(4) If the licensed producer fails to comply with an undertaking mentioned in subsection (3), the Minister must revoke the permit.

Revocation following suspension

(5) The Minister must revoke a permit if the licensed producer fails to comply with the decision of the Minister to suspend the permit under section 87 or if the situation giving rise to the suspension is not rectified.

DIVISION 7

SECURITY CLEARANCES

Eligibility

89. Only the following persons may submit to the Minister an application for a security clearance:

Application for security clearance

90. (1) An application for a security clearance must include the following information and documentation, to be used only for the purposes of sections 91 and 92:

Spouse or common-law partner

(2) The information required in respect of any of the persons referred to in paragraph (1)(i) is

Signed by applicant

(3) The application for a security clearance must be signed and dated by the applicant.

Definition of “common-law partner”

(4) In this section, “common-law partner” means any person who is cohabiting with the applicant in a relationship of a conjugal nature and has done so for a period of at least one year.

Checks

91. On receipt of a fully completed application for a security clearance, the Minister must conduct the following checks for the purpose of assessing whether an applicant poses a risk to the integrity of the control of the production and distribution of cannabis under the Act and its regulations, including the risk of cannabis being diverted to an illicit market or use:

Minister’s decisions

92. The Minister may grant a security clearance if, in the opinion of the Minister, the information provided by the applicant and that resulting from the checks is reliable and is sufficient for the Minister to determine, by taking into account the following factors, that the applicant does not pose an unacceptable risk to the integrity of the control of the production and distribution of cannabis under the Act and its regulations, including the risk of cannabis being diverted to an illicit market or use:

Outstanding criminal charge

93. If there is an outstanding criminal charge against the applicant that could, if the applicant were found guilty, be taken into account by the Minister under paragraph 92(a), the Minister may decline to process the application until the charge has been disposed of by the courts, in which case the Minister must notify the applicant in writing.

Refusal to grant security clearance

94. (1) If the Minister intends to refuse to grant a security clearance, the Minister must notify the applicant in writing to that effect.

Content of notice

(2) The notice must set out the basis for the Minister’s intention and fix a period of time within which the applicant may make written representations to the Minister, which period of time must start on the day on which the notice is served or sent and must be not less than 20 days.

Opportunity to make written representations

(3) The Minister must not refuse to grant a security clearance until the written representations have been received and considered or before the period of time fixed in the notice has expired, whichever comes first. The Minister must notify the applicant in writing of any refusal.

Validity period

95. (1) The Minister must establish a period of validity for a security clearance in accordance with the level of risk posed by the applicant as determined under section 92, but the period must not exceed five years.

Extension of period

(2) If the validity period is less than five years, the Minister may extend the period to a total of five years if the Minister determines under section 92 that the holder does not pose an unacceptable risk to the integrity of the control of the production and distribution of cannabis under the Act and its regulations, including the risk of cannabis being diverted to an illicit market or use.

Security clearance no longer required

96. A licensed producer must notify the Minister in writing not later than five days after the holder of a security clearance is no longer required by these Regulations to hold a security clearance. The Minister must then cancel the clearance.

Suspension of security clearance

97. (1) The Minister may suspend a security clearance on receipt of information that could change the Minister’s determination made under section 92.

Written notice to holder

(2) Immediately after suspending a security clearance, the Minister must notify the holder in writing of the suspension.

Content of notice

(3) The notice must set out the basis for the suspension and must fix a period of time within which the holder may make written representations to the Minister, which period of time must start on the day on which the notice is served or sent and must be not less than 20 days.

Reinstatement of clearance

(4) The Minister may reinstate the security clearance if the Minister determines under section 92 that the holder does not pose an unacceptable risk to the integrity of the control of the production and distribution of cannabis under the Act and its regulations, including the risk of cannabis being diverted to an illicit market or use.

Cancellation of clearance

(5) The Minister may cancel the security clearance if the Minister determines under section 92 that the holder may pose an unacceptable risk to the integrity of the control of the production and distribution of cannabis under the Act and its regulations, including the risk of cannabis being diverted to an illicit market or use. The Minister must notify the holder in writing of any cancellation.

Opportunity to be heard

(6) The Minister must not cancel the security clearance until the written representations referred to in subsection (3) have been received and considered or before the time period fixed in the notice referred to in that subsection has expired, whichever comes first.

New applications

98. If the Minister refuses to grant or cancels a security clearance, an applicant may submit a new application only if

Sending of notices by Minister

99. The Minister must send any notice to be given under this Division to the person at their last known address by using a method of sending that involves

False or misleading information

100. It is prohibited to knowingly submit to the Minister an application containing false or misleading information in order to obtain a security clearance.

DIVISION 8

COMMUNICATION OF INFORMATION

Information concerning clients and responsible individuals

101. (1) Subject to subsections (2) and (3), if a licensed producer is provided with the given name, surname, date of birth and gender of an individual by a member of a Canadian police force who requests information in the course of an investigation under the Act or these Regulations, the producer must provide as soon as feasible, within 72 hours after receiving the request, the following information to that Canadian police force:

Verification

(2) Before providing the requested information, the licensed producer must verify in a reasonable manner that the person requesting the information is a member of a Canadian police force.

Use of information

(3) Information provided under this section must be used only for the purposes of the investigation referred to in subsection (1) and for the proper administration or enforcement of the Act or these Regulations.

Information concerning health care practitioners

102. A licensed producer must provide in writing, as soon as feasible, any factual information that has been obtained about a health care practitioner under the Act or these Regulations to the licensing authority responsible for the registration or authorization of the practise of the profession

Information concerning licensed producers

103. The Minister is authorized to provide any information set out in a notice referred to in section 38, 39 or 40 to a Canadian police force or a member of a Canadian police force who requests the information in the course of an investigation under the Act or these Regulations, subject to that information being used only for the purpose of that investigation and the proper administration or enforcement of the Act or these Regulations.

Information concerning import or export permit

104. The Minister is authorized, for the purpose of verifying whether an importation or exportation of marihuana complies with these Regulations, to provide to a customs officer in Canada any information referred to in sections 74, 75, 78, 82, 83 and 86 and to inform them whether a permit has been suspended or revoked.

Providing information to foreign organizations

105. The Minister is authorized, for the proper administration or enforcement of the Act or these Regulations and for the purpose of enabling Canada to fulfill its international obligations under section 12 of the United Nations’ Single Convention on Narcotic Drugs, 1961, to provide the following information or documents to the International Narcotics Control Board or a competent authority:

Security clearance — Minister

106. The Minister is authorized to communicate to a law enforcement agency information concerning an application for a security clearance for the purpose of conducting the checks and verifications referred to in section 91, subject to that information being used by that agency only for that purpose.

PART 2

CLIENT REGISTRATION AND ORDERING

REGISTRATION

Eligibility

107. An individual is eligible to be a client of a licensed producer only if they ordinarily reside in Canada.

Registration application

108. (1) Before registering an individual as a client, a licensed producer must obtain from the individual or an individual who is responsible for the individual an application that contains the following information:

Medical document

(2) The applicant must include with the application the original of their medical document.

Statement by applicant or responsible individual

(3) The application must be signed and dated by the applicant or an individual who is responsible for the applicant and include a statement that

Statement by responsible individual

(4) If the application is signed and dated by an individual who is responsible for the applicant, it must include a statement by that individual that they are responsible for the applicant.

Homeless applicant

(5) If an application includes the information referred to in subparagraph (1)(b)(ii), the applicant must include with the application an attestation of residence signed and dated by a manager of the specified shelter, hostel or similar institution confirming that the institution provides food, lodging or other social services to the applicant.

Health care practitioner’s consent to receive dried marihuana

109. (1) If the shipping address specified in a registration application is the one referred to in subparagraph 108(1)(f)(iii), the applicant must include with the application a statement signed and dated by the health care practitioner who provided the medical document to the applicant indicating that the practitioner consents to receive dried marihuana on behalf of the applicant.

Withdrawal of consent

(2) If the applicant becomes a client of a licensed producer in accordance with section 111 and the health care practitioner ceases to consent to receive dried marihuana on behalf of the client, the practitioner must send a written notice to that effect to the client and the licensed producer.

 No further shipments

(3) A licensed producer who receives such a notice must not send any further shipments of dried marihuana to that health care practitioner for that client.

Amendment to registration

(4) A client who receives such a notice and wishes to specify a new shipping address must submit to the licensed producer a registration amendment application in accordance with section 115.

Verification of medical document

110. A licensed producer who receives an application under section 108 and intends to register the applicant must ensure that

Registration of client

111. (1) Subject to section 113, a licensed producer may register an applicant as a client.

Registration document and unique identifier

(2) If the licensed producer registers the applicant as a client, the producer must

Expiry of registration

112. A client’s registration expires at the end of the period of validity of the medical document supporting the registration, as determined in accordance with subsections 129(2) and (3).

Refusal to register

113. A licensed producer must refuse to register an applicant as a client if

Notice — refusal to register

114. (1) A licensed producer who proposes to refuse to register an applicant for a ground set out in section 113 or for a business reason must without delay send the applicant a notice that indicates the reason for the refusal.

Opportunity to be heard

(2) The applicant may, within 10 days after receipt of the notice, provide the licensed producer with reasons why the refusal is unfounded.

Return of medical document

(3) A licensed producer who refuses to register an applicant must return the medical document to the applicant without delay.

Application to amend registration

115. (1) An application to amend a registration must be made to the licensed producer by the client or an individual responsible for the client when a change occurs in respect of any of the information provided under subsection 108(1).

Content of application

(2) The application must include

Statement

(3) The application must be signed and dated by the client or an individual who is responsible for the client and include a statement that

Statement by responsible individual

(4) If the application is signed and dated by an individual who is responsible for the client, it must include a statement by that individual that they are responsible for the client.

Amendment

116. (1) A licensed producer must amend a client’s registration if the client’s amendment application meets the requirements of subsections 115(2) and (3).

Amended registration document

(2) If the licensed producer amends the client’s registration, the producer must send the client an amended registration document that contains the information referred to in subparagraphs 111(2)(a)(i) and (ii).

Cancellation of registration

117. (1) A licensed producer must cancel the registration of a client if

Time of cancellation

(2) The licensed producer must cancel the registration of the client without delay if the producer

Cancellation of all registrations

(3) A licensed producer must cancel the registrations of all of its clients without delay if the producer’s licence is revoked.

Cancellation by producer for business reason

(4) A licensed producer may cancel the registration of a client for a business reason.

Notice

(5) Except in the case of the death of a client, a licensed producer who proposes to cancel a client’s registration must without delay send a notice that indicates the reason for the cancellation to the client.

Opportunity to be heard

(6) Within 10 days after receipt of the notice, the client or an individual responsible for the client may provide the licensed producer with reasons why the cancellation is unfounded.

Medical document

(7) A licensed producer who cancels a client’s registration must not return the medical document.

Prohibition — transfer of medical document

118. A licensed producer must not transfer to any person a medical document on the basis of which a client has been registered.

NEW MEDICAL DOCUMENT

New application

119. A licensed producer must not sell or provide dried marihuana to a client or an individual who is responsible for the client on the basis of a new medical document unless the client or the individual submits to the producer a new registration application that meets the requirements of section 108.

Applicable provisions

120. Sections 109 to 114 apply to an application under section 119 in the same way that they apply to an application under section 108.

PROCESSING AN ORDER

Order required

121. (1) A licensed producer must not sell or provide dried marihuana to a client or an individual responsible for the client unless the producer has first received, from the client or the individual, a written order in accordance with subsection (2) or a verbal order recorded in accordance with subsection (3).

Written orders

(2) A written order for dried marihuana must

Verbal orders

(3) A licensed producer who receives a verbal order must, before filling the order, make a record of the information referred to in section 137.

Shipping

122. In filling an order referred to in section 121, a licensed producer must not transfer physical possession of the dried marihuana to the client or to an individual responsible for that client other than by shipping it to that person.

Refusal

123. (1) A licensed producer must refuse to fill an order referred to in section 121 if

Notice of refusal to fill order

(2) The licensed producer must send the client a written notice of the reason for the refusal.

Thirty-day limit

124. (1) A licensed producer must not sell or provide to a client or an individual responsible for the client in any 30-day period a total quantity of dried marihuana that exceeds 30 times the daily quantity referred to in paragraph 129(1)(d).

Date of sale

(2) A quantity of dried marihuana is deemed to be sold or provided, for the purpose of subsection (1), on the date that the licensed producer reasonably anticipates that it will be received by the client.

Return

(3) If the client or an individual responsible for the client returns to the licensed producer dried marihuana that the producer sold or provided to them, the producer may replace the returned marihuana with an equal quantity, to a maximum of 150 g.

Exclusion

(4) The quantity of any dried marihuana that the licensed producer provides to the client or an individual responsible for the client to replace the returned marihuana is to be excluded for the purpose of calculating the total quantity referred to in subsection (1).

PART 3

CLIENTS AND OTHER AUTHORIZED USERS

Proof of authority to possess

125. On demand, an individual who, in accordance with these Regulations, obtains dried marihuana for their own medical purposes must show to a police officer proof that they are authorized to possess the dried marihuana.

Prohibition — obtaining from more than one source

126. It is prohibited to seek or obtain dried marihuana from more than one source at a time on the basis of the same medical document.

Return

127. (1) An individual who, in accordance with these Regulations or subsection 65(2.1) of the Narcotic Control Regulations, obtains dried marihuana for their own medical purposes or for those of another individual for whom they are responsible may return the dried marihuana to the person who sold or provided it to them if that person accepts the return of that dried marihuana.

Return by shipping

(2) If the individual returns the dried marihuana by means of shipping it to the person who sold or provided it to them, they must

Return to licensed producer

(3) If the individual returns the dried marihuana to the licensed producer who sold or provided it to them, they must do so by shipping it to the producer’s site in accordance with paragraphs (2)(a) and (b).

PART 4

HEALTH CARE PRACTITIONERS

Authorized activities

128. (1) In addition to being authorized to possess dried marihuana in accordance with section 3, a health care practitioner may perform the following activities in regard to a person who is under their professional treatment:

Transfer

(2) The health care practitioner may also transfer dried marihuana to an individual who is responsible for the person under their professional treatment.

Medical document

129. (1) A medical document provided by a health care practitioner to a person who is under their professional treatment must indicate

Period of use

(2) The period of use referred to in paragraph (1)(e)

Validity of medical document

(3) A medical document is valid for the period of use specified in it.

Attestation

(4) The medical document must be signed and dated by the health care practitioner providing it and must attest that the information in the document is correct and complete.

Thirty-day limit

130. (1) A health care practitioner must not transfer to a person under their professional treatment or an individual who is responsible for that person (both of whom are referred to in this section as “the transferee”) in any 30-day period a total quantity of dried marihuana that exceeds 30 times the daily quantity to be used by the person under their professional treatment, as specified in the medical document on the basis of which the transfer is made.

Additional limit

(2) A health care practitioner must not, at any one time, transfer to the transferee a quantity of dried marihuana that exceeds 150 g.

Exclusion

(3) The quantity of any dried marihuana that the health care practitioner transfers to the transferee to replace any dried marihuana that the transferee has returned under section 127 is to be excluded for the purpose of calculating the total quantity referred to in subsection (1).

PART 5

SALE OR PROVISION BY A LICENSED PRODUCER TO A PERSON OTHER THAN A CLIENT

Order required — cannabis

131. (1) A licensed producer must not sell or provide cannabis under subsection 12(2) unless the producer has first received a written order in accordance with subsection (3) from

Order required — dried marihuana

(2) A licensed producer must not sell or provide dried marihuana under subparagraphs 12(4)(a)(ii) or (iii) unless the producer has first received a written order in accordance with subsection (3) from

Requirements

(3) The written order must

Signature

(4) A licensed producer must verify in a reasonable manner the identity of the person who placed the order if the signature on the order is not known to the producer.

Shipping

132. In filling an order referred to in subsection 131(2), a licensed producer must not transfer physical possession of the dried marihuana to the person to whom it is sold or provided other than by shipping it to them.

Refusal

133. (1) A licensed producer must refuse to fill an order referred to in subsection 131(1) or (2) if

Notice of refusal to fill order

(2) The licensed producer must send the person who placed the order a written notice of the reason for the refusal.

PART 6

RECORD KEEPING BY LICENSED PRODUCERS

TRANSACTIONS

Cannabis received

134. Except in the case referred to in section 139, a licensed producer who receives cannabis must record the following information:

Imported marihuana

135. A licensed producer who imports marihuana must retain a copy of the declaration required by section 78 and of the export permit issued by a competent authority in the country of export.

Exported marihuana

136. A licensed producer who exports marihuana must retain a copy of the declaration required by section 86 and of the import permit issued by a competent authority in the country of final destination.

Record of verbal order

137. A licensed producer who receives a verbal order referred to in subsection 121(3) must record the following information:

Filling of order from client

138. (1) A licensed producer who fills an order referred to in section 121 must record the following information:

Retention of documents

(2) A licensed producer must retain a written order referred to in subsection 121(2) or a written record of a verbal order referred to in subsection 121(3).

Refusal to fill an order

(3) A licensed producer who refuses to fill an order referred to in section 121 must retain a copy of the written notice referred to in subsection 123(2).

Dried marihuana returned by client

139. A licensed producer who receives dried marihuana that is returned under section 127 must record the following information:

Order from person other than client

140. (1) A licensed producer who fills an order referred to in subsection 131(1) or (2) must record the following information:

Refusal to fill an order

(2) A licensed producer who refuses to fill an order referred to in subsection 131(1) or (2) must retain a copy of the written notice referred to in subsection 133(2).

CLIENT REGISTRATIONS

Information

141. (1) A licensed producer must record the following information:

Documents

(2) A licensed producer must retain the following documents:

SECURITY, PRODUCTION AND INVENTORY

Security

142. A licensed producer must keep

Good production practices and packaging, labelling and shipping

143. (1) A licensed producer must keep

Sale or provision

(2) A licensed producer who sells or provides dried marihuana

Propagated, sown, harvested, dried, packaged and destroyed marihuana

144. A licensed producer must keep a record of the following information concerning each lot or batch of marihuana that they propagate, sow, harvest, dry, package or destroy:

Destroyed cannabis

145. (1) A licensed producer must keep, for each instance in which they destroy cannabis, a record of the following information:

Statement by witnesses

(2) A licensed producer must keep, for each instance in which they destroy cannabis, a statement signed and dated by each of the witnesses referred to in paragraph 20(1)(b) stating that they have witnessed the destruction and that the cannabis was destroyed in accordance with section 20.

Inventory

146. A licensed producer must keep a record of the net weight of each of the following that are in inventory at their site at the end of each quarter of the calendar year:

NOTICES TO LOCAL AUTHORITIES

Notices

147. A licensed producer must keep a copy of

GENERAL OBLIGATIONS

Manner of keeping records

148. (1) A licensed producer must ensure that the records, documents and information referred to in this Part

Retention period

(2) A licensed producer must retain the records, documents and information for the following periods:

Case reports and summary reports

(3) A licensed producer must retain the serious adverse reaction case reports and the summary reports referred to in subsections 63(1) and (2) for a period of 25 years after the day on which they were made.

Information required by Minister

149. A licensed producer must provide the Minister with any information that the Minister may require in respect of the records, documents and information referred to in this Part, in the form and at the times that the Minister specifies.

Former licensed producers

150. If a licence to produce expires without being renewed or is revoked, the former licensed producer must comply with the requirements of paragraph 148(1)(a), subsections 148(2) and (3) and section 149.

[151 to 199 reserved]

PART 7

CONSEQUENTIAL AMENDMENTS, TRANSITIONAL PROVISIONS, REPEAL AND COMING INTO FORCE

CONSEQUENTIAL AMENDMENTS
Narcotic Control Regulations

200. (1) Section 2 of the Narcotic Control Regulations (see footnote 1) is amended by adding the following in alphabetical order:

“cannabis” means the substance set out in item 17 of the schedule; (chanvre indien)

“dried marihuana” means harvested marihuana that has been subjected to any drying process; (marihuana séchée)

“health care practitioner” has, except in section 59, the same meaning as in subsection 1(1) of the Marihuana for Medical Purposes Regulations; (praticien de la santé)

“licensed producer” has the same meaning as in subsection 1(1) of the Marihuana for Medical Purposes Regulations; (producteur autorisé)

“marihuana” means the substance referred to as “Cannabis (marihuana)” in subitem 17(2) of the schedule; (marihuana)

“medical marihuana document” has the same meaning as “medical document” in subsection 1(1) of the Marihuana for Medical Purposes Regulations; (document médical concernant la marihuana)

“transfer” means, except in subsection 45(3), to transfer, whether directly or indirectly, without consideration: (transférer)

(2) Paragraph (b) of the definition “pharmacist” in section 2 of the Regulations is replaced by the following:

201. The Regulations are amended by adding the following after section 2:

2.1 For greater certainty, in these Regulations, a reference to “provide” includes “transfer”.

202. (1) The portion of paragraph 3(1)(d) of the French version of the Regulations before subparagraph (i) is replaced by the following:

(2) Paragraph 3(1)(d) of the Regulations is amended by striking out “or” at the end of subparagraph (ii), by adding “or” at the end of subparagraph (iii) and by adding the following after subparagraph (iii):

203. (1) Section 8 of the Regulations is replaced by the following:

8. (1) Subject to these Regulations, the Marihuana for Medical Purposes Regulations and the Marihuana Medical Access Regulations, no person except a licensed dealer shall produce, make, assemble, import, export, sell, provide, transport, send or deliver a narcotic.

(2) No licensed dealer shall import or export a narcotic without a permit.

(3) No licensed dealer shall cultivate, propagate or harvest marihuana other than for scientific purposes.

(4) Subsection (3) does not apply to marihuana produced by a licensed dealer under contract with Her Majesty in right of Canada.

(2) Subsection 8(1) of the Regulations, as enacted by subsection (1), is replaced by the following:

8. (1) Subject to these Regulations and the Marihuana for Medical Purposes Regulations, no person except a licensed dealer shall produce, make, assemble, import, export, sell, provide, transport, send or deliver a narcotic.

204. Section 8.1 of the Regulations is replaced by the following:

8.1 A licensed dealer is authorized to have a narcotic in their possession for the purpose of exporting the narcotic from Canada if they have obtained the narcotic in accordance with these Regulations or the Marihuana for Medical Purposes Regulations.

205. Paragraph 8.3(1)(a) of the Regulations is replaced by the following:

206. (1) Subsection 9.4(1) of the Regulations is amended by adding the following after paragraph (d):

(2) Paragraph 9.4(2)(b) of the Regulations is replaced by the following:

207. Paragraph 9.9(2)(b) of the Regulations is replaced by the following:

208. Section 12 of the Regulations is replaced by the following:

12. Every licence or permit issued under these Regulations is subject to the condition that the licensed dealer will comply with the provisions of these Regulations and the Marihuana for Medical Purposes Regulations.

209. (1) The portion of subsection 24(2) of the Regulations before paragraph (a) is replaced by the following:

(2) Subject to subsection (2.2) and section 25, a licensed dealer may sell or provide any narcotic other than diacetylmorphine (heroin) or methadone to

(2) Section 24 of the Regulations is amended by adding the following after subsection (2.1):

(2.2) No licensed dealer shall sell or provide dried marihuana to a person referred to in paragraph (2)(b), (c) or (d) unless the dealer produced it under contract with Her Majesty in right of Canada.

(3) Subsection 24 of the Regulations is amended by adding the following after subsection (4):

(5) A licensed dealer may sell or provide cannabis to a licensed producer.

210. (1) The portion of subsection 27(1) of the Regulations before paragraph (a) is replaced by the following:

27. (1) Subject to this section, a licensed dealer may, in accordance with the terms and conditions of their dealer’s licence, sell or provide a narcotic under subsections 24(2) to (5) if the licensed dealer has, on the premises specified in the licence, received

(2) The portion of subsection 27(2) of the Regulations before paragraph (a) is replaced by the following:

(2) A licensed dealer who has received an order referred to in paragraph (1)(a) may sell or provide a narcotic under subsections 24(2) to (5) if

(3) Subparagraph 27(2)(a)(i) of the Regulations is replaced by the following:

211. The portion of section 30 of the Regulations before paragraph (a) is replaced by the following:

30. A pharmacist who receives a narcotic from a licensed dealer or dried marihuana from a licensed producer shall immediately enter in a book, register or other record maintained for such purposes, the following:

212. (1) Subsection 31(1) of the Regulations is replaced by the following:

31. (1) No pharmacist shall sell or provide narcotics except in accordance with this section and sections 34 to 36 and 45.

(2) The portion of subsection 31(2) of the Regulations before paragraph (a) is replaced by the following:

(2) A pharmacist may sell or provide a narcotic other than methadone or dried marihuana to a person

(3) Paragraph 31(2)(b) of the French version of the Regulations is replaced by the following:

(4) Section 31 of the Regulations is amended by adding the following after subsection (3):

(4) If authorized by the person in charge of the hospital, a pharmacist practising in a hospital may sell or provide dried marihuana in accordance with subsection 65(2.1).

213. Subsection 45(1) of the English version of the Regulations is replaced by the following:

45. (1) A pharmacist may, on receiving a written order for a narcotic

214. (1) The portion of section 46 of the Regulations before paragraph (a) is replaced by the following:

46. The Minister shall provide in writing any factual information about a pharmacist that has been obtained under the Act, these Regulations or the Marihuana for Medical Purposes Regulations to the provincial professional licensing authority responsible for the registration or authorization of the person to practise their profession

(2) Clauses 46(a)(ii)(B) and (C) of the Regulations are replaced by the following:

215. (1) The portion of subsection 48(1) of the Regulations before paragraph (a) is replaced by the following:

48. (1) In the circumstances described in subsection (2), the Minister must issue a notice to the persons and authorities specified in subsection (3) advising them that licensed dealers, pharmacists practising in the notified pharmacies and licensed producers must not sell or provide to the pharmacist named in the notice one or more of the following:

(2) Paragraph 48(2)(c) of the Regulations is replaced by the following:

(3) Subsection 48(3) of the Regulations is amended by adding the following after paragraph (a):

(4) Paragraph 48(4)(f) of the Regulations is replaced by the following:

216. The portion of section 49 of the Regulations before paragraph (a) is replaced by the following:

49. The Minister must provide the licensed dealers, licensed producers, pharmacies, and provincial professional licensing authorities who were issued a notice under subsection 48(1) with a notice of retraction of that notice if

217. (1) Subsection 53(1) of the Regulations is replaced by the following:

53. (1) No practitioner shall administer a narcotic to a person or animal, or prescribe, sell or provide a narcotic for a person or animal, except as authorized under this section, the Marihuana Medical Access Regulations or the Marihuana for Medical Purposes Regulations.

(2) Subsection 53(1) of the Regulations, as enacted by subsection (1), is replaced by the following:

53. (1) No practitioner shall administer a narcotic to a person or animal, or prescribe, sell or provide a narcotic for a person or animal, except as authorized under this section or the Marihuana for Medical Purposes Regulations.

(3) Subsection 53(2) of the Regulations is replaced by the following:

(2) Subject to subsections (3) and (4), a practitioner may administer a narcotic other than dried marihuana to a person or animal, or prescribe, sell or provide it for a person or animal, if

(4) Section 53 of the Regulations is amended by adding the following after subsection (4):

(5) A health care practitioner may administer dried marihuana to a person or prescribe or transfer it for a person if

218. (1) The portion of subsection 54(1) of the Regulations before paragraph (a) is replaced by the following:

54. (1) A practitioner who sells or provides a narcotic other than dried marihuana to a person for self-administration or for administration to an animal shall, whether or not the practitioner charges for the narcotic, keep a record showing the name and quantity of the narcotic sold or provided, the name and address of the person to whom it was sold or provided and the date on which it was sold or provided, if the quantity of the narcotic exceeds

(2) Subsection 54(2) of the Regulations is replaced by the following:

(2) The practitioner shall keep the record in a place, form and manner that will permit an inspector readily to examine and obtain information from it.

219. Paragraph 55(a) of the Regulations is replaced by the following:

220. (1) The portion of section 57 of the Regulations before paragraph (a) is replaced by the following:

57. The Minister shall provide in writing any factual information about a practitioner that has been obtained under the Act, these Regulations or the Marihuana for Medical Purposes Regulations to the provincial professional licensing authority responsible for the registration or authorization of the person to practise their profession

(2) Clauses 57(a)(ii)(B) and (C) of the Regulations are replaced by the following:

221. (1) The portion of section 58 of the Regulations before paragraph (a) is replaced by the following:

58. A practitioner may make a written request to the Minister to send to licensed dealers, licensed producers and pharmacies a notice, issued under section 59, advising them of one or more of the following requirements:

(2) Section 58 of the Regulations is amended by striking out “or” at the end of paragraph (c) and by adding the following after paragraph (d):

(3) Section 58 of the Regulations, as amended by subsection (2), is amended by striking out “or” at the end of paragraph (f), by adding “or” at the end of paragraph (e) and by repealing paragraph (g).

(4) Section 58 of the Regulations, as amended by subsections (2) and (3), is amended by striking out “or” at the end of paragraph (e), by adding “or” at the end of paragraph (d) and by repealing paragraph (f).

222. (1) Subsection 59(1) of the Regulations is amended by striking out “or” at the end of paragraph (a) and by adding the following after paragraph (a):

(2) Subsection 59(1) of the Regulations is amended by adding the following after paragraph (b):

(3) Subsection 59(1) of the Regulations, as amended by subsection (2), is amended by striking out “or” at the end of paragraph (d), by adding “or” at the end of paragraph (c) and by repealing paragraph (e).

(4) Subsection 59(1) of the Regulations, as amended by subsections (2) and (3), is amended by striking out “or” at the end of paragraph (c), by adding “or” at the end of paragraph (b) and by repealing paragraph (d).

(5) Paragraph 59(2)(c) of the Regulations is replaced by the following:

(6) Subsection 59(3) of the Regulations is amended by adding the following after paragraph (a):

(7) Subsection 59(4) of the Regulations is amended by adding the following after paragraph (a):

(8) Paragraph 59(4)(f) of the Regulations is replaced by the following:

(9) Section 59 of the Regulations is amended by adding the following after subsection (5):

(6) In this section, “health care practitioner” means

223. The portion of section 60 of the Regulations before paragraph (a) is replaced by the following:

60. The Minister must provide the licensed dealers, licensed producers, pharmacies and provincial professional licensing authorities who were issued a notice under subsection 59(1) with a notice of retraction of that notice if

224. Paragraph 63(a) of the Regulations is amended by striking out “and” at the end of subparagraph (vi) and by adding the following after subparagraph (vii):

225. (1) Subsections 65(2) to (4) of the Regulations are replaced by the following:

(2) Subject to subsection (5), on receipt of a prescription or a written order, signed and dated by a practitioner, the person in charge of a hospital may permit a narcotic other than diacetylmorphine (heroin) or dried marihuana to be administered to a person or an animal under treatment as an in-patient or out-patient of the hospital, or to be sold or provided for the person or to the person in charge of the animal.

(2.1) On receipt of a prescription, a written order or a medical marihuana document, signed and dated by a health care practitioner, the person in charge of a hospital may permit dried marihuana

(3) Subject to subsections (5) and (5.1), the person in charge of a hospital may permit a narcotic other than dried marihuana to be provided, for emergency purposes, to a hospital employee or practitioner in another hospital on receipt of a written order signed and dated by a pharmacist in the other hospital or a practitioner authorized by the person in charge of the other hospital to sign the order.

(3.1) Subject to subsection (5.2), the person in charge of a hospital may permit dried marihuana to be provided, for emergency purposes, to a hospital employee or health care practitioner in another hospital on receipt of a written order signed and dated by a pharmacist in the other hospital or a health care practitioner authorized by the person in charge of the other hospital to sign the order.

(4) Subject to subsection (5.1), the person in charge of a hospital may permit a narcotic other than diacetylmorphine (heroin) or dried marihuana to be sold or provided, for emergency purposes, to a pharmacist on receipt of a written order signed and dated by the pharmacist.

(2) Section 65 of the Regulations is amended by adding the following after subsection (5.1):

(5.2) No person in charge of a hospital shall permit dried marihuana to be sold or provided under subsection (3.1) unless the signature of the pharmacist in the other hospital or of the health care practitioner authorized by the person in charge of the other hospital to sign an order is known to the person who sells or provides the dried marihuana or has been verified.

226. The Regulations are amended by adding the following after section 65:

65.1 (1) The person in charge of a hospital who permits dried marihuana to be sold or provided iunder subsection 65(2.1) to an out-patient or an individual responsible for that patient shall ensure that

(2) If the person to whom dried marihuana is sold or provided as described in subsection (1) returns it to the hospital, the person in charge of the hospital may, subject to paragraph (1)(b), permit it to be replaced with an equal quantity of dried marihuana.

(3) The quantity of any dried marihuana that is replaced under subsection (2) is to be excluded for the purpose of calculating the total quantity referred to in paragraph (1)(a).

65.2 The person in charge of a hospital who permits dried marihuana to be sold or provided under subsection 65(2.1) to an out-patient or an individual responsible for that patient shall ensure that

65.3 The person in charge of a hospital may, on receiving a written order for dried marihuana, permit it to be

227. Section 67 of the English version of the Regulations is replaced by the following:

67. The Minister may, on application for it, issue a licence to any person who, in the opinion of the Minister, is qualified to cultivate, gather or produce opium poppy or cannabis for scientific purposes, on any terms and conditions that the Minister considers necessary.

228. Subsection 73(2) of the Regulations is replaced by the following:

(2) The Minister may communicate to a nursing statutory body any information concerning any member of that body obtained under the Act, these Regulations or the Marihuana for Medical Purposes Regulations.

Marihuana Medical Access Regulations

229. Subsection 1(1) of the Marihuana Medical Access Regulations (see footnote 2) is amended by adding the following in alphabetical order:

“client” has the same meaning as in subsection 1(1) of the Marihuana for Medical Purposes Regulations. (client)

“licensed producer” has the same meaning as in subsection 1(1) of the Marihuana for Medical Purposes Regulations. (producteur autorisé)

230. Paragraph 5(1)(e) of the Regulations is replaced by the following:

231. Subsection 11(2) of the Regulations is amended by striking out “and” at the end of paragraph (f), by adding “and” at the end of paragraph (g) and by adding the following after paragraph (g):

232. Section 13 of the Regulations is replaced by the following:

13. (1) Subject to subsection (2), an authorization to possess expires 12 months after its date of issue or, if a shorter period is specified in the application for the authorization under paragraph 6(1)(d), at the end of that period.

(2) An authorization to possess expires not later than March 31, 2014.

(3) For greater certainty, subsection (2) applies

13.1 (1) For the purpose of paragraph 11(2)(h), the reference date that is to be indicated on an authorization to possess is the date that is 12 months after the date of issue of the authorization or, if a shorter period is specified in the application for the authorization under paragraph 6(1)(d), the date on which that period ends.

(2) The “shorter period” referred to in subsection (1) begins on the date of issue of the authorization to possess.

233. Subsection 21(2) of the Regulations is replaced by the following:

(2) If an application is submitted on or before September 30, 2013 to amend an authorization to possess to increase the daily amount of dried marihuana specified in the authorization and the authorization is consequently amended, the Minister shall, if applicable, amend the licence to produce that was issued on the basis of the authorization to reflect the change in

(3) For greater certainty, the Minister shall not amend the licence to produce in the manner referred to in subsection (2) if the application is submitted after September 30, 2013.

234. The portion of subsection 26(1) of the Regulations before paragraph (a) is replaced by the following:

26. (1) An application for a personal-use production licence shall be considered only if it is submitted on or before September 30, 2013 and is made by a person who

235. Section 32 of the Regulations is amended by striking out “or” at the end of paragraph (d), by adding “or” at the end of paragraph (e) and by adding the following after paragraph (e):

236. Section 33 of the Regulations is replaced by the following:

33. (1) Subject to subsection (2), a personal-use production licence expires on the earlier of

(2) A personal-use production licence expires not later than March 31, 2014.

237. The portion of subsection 36(1) of the Regulations before paragraph (a) is replaced by the following:

36. (1) An application for a designated-person production licence shall be considered only if it is submitted on or before September 30, 2013 and is made by a person who

238. Section 41 of the Regulations is amended by striking out “or” at the end of paragraph (b), by adding “or” at the end of paragraph (c) and by adding the following after paragraph (c):

239. Section 42 of the Regulations is replaced by the following:

42. (1) Subject to subsection (2), a designated-person production licence expires on the earlier of

(2) A designated-person production licence expires not later than March 31, 2014.

240. Section 45 of the Regulations is replaced by the following:

45. The Minister shall refuse to renew a licence to produce for any reason referred to in paragraphs 32(a) to (e) or 41(a) to (c), whichever applies.

45.1 (1) This section applies if

(2) In the renewed licence to produce the Minister shall not specify an amount greater than the amount specified in the previous licence in respect of

241. The Regulations are amended by adding the following before section 46:

45.2 The holder of a licence to produce shall not change the location of the production site during the period beginning on October 1, 2013 and ending on December 15, 2013, unless

45.3 The holder of a licence to produce shall not change the location of the production site after December 15, 2013.

45.4 (1) This section applies if

(2) The holder shall, at least 30 days before the day on which the change of address occurs,

(3) Subsection (2) does not apply if

242. (1) Section 46 of the Regulations is amended by adding the following after subsection (1):

(1.1) An application concerning a proposed change in the location of the production site shall be submitted on or before September 30, 2013.

(2) Paragraphs 46(2)(b) and (c) of the Regulations are replaced by the following:

243. Sections 47 and 48 of the Regulations are replaced by the following:

47. (1) Subject to subsection (2) and section 48, if an application complies with subsections 46(1.1) and (2), the Minister shall amend the licence to produce.

(2) If an application concerns a proposed change in the location of the production site, the Minister shall not amend the licence after December 15, 2013, regardless of the day on which the application was submitted.

48. The Minister shall refuse to amend a licence to produce for any reason referred to in paragraphs 32(a) to (e) or 41(a) to (c), whichever applies.

244. Subsections 50(1) and (2) of the Regulations are replaced by the following:

50. (1) The holder of a licence to produce shall, within 10 days after the change, notify the Minister in writing of

245. Section 60 of the Regulations is amended by adding the following after subsection (2):

(3) Subsection (2) does not apply in the case of a revocation referred to in subsection 62(3).

246. Section 62 of the Regulations is amended by adding the following after subsection (2):

(3) If, in accordance with item 7 of the table to section 256 of the Marihuana for Medical Purposes Regulations, a licensed producer notifies the Minister that the holder of an authorization to possess has become a client of the producer, the Minister shall, not earlier than 30 days after the day on which the holder was registered, revoke the authorization and any licence to produce issued on the basis of the authorization.

247. The portion of section 64 of the Regulations before paragraph (a) is replaced by the following:

64. The Minister shall not revoke an authorization to possess or a licence to produce under subsection 62(1) or (2) or section 63 or 63.1 unless

248. The Regulations are amended by adding the following after section 69:

69.1 For the purpose of item 10 of the table to section 256 of the Marihuana for Medical Purposes Regulations, if the medical practitioner named in the authorization to possess supporting a client’s registration with a licensed producer has advised the Minister in writing that the continued use of dried marihuana by the client is no longer supported for clinical reasons, the Minister shall so advise the licensed producer in writing.

249. Section 70.4 of the Regulations is replaced by the following:

70.4 A medical practitioner who, in accordance with section 24 of the Narcotic Control Regulations, has obtained dried marihuana from a licensed dealer who produced it under contract with Her Majesty in right of Canada may provide the marihuana to the holder of an authorization to possess who is under the practitioner’s professional treatment.

250. The Regulations are amended by adding the following after section 72:

72.1 If an application under these Regulations is received by the Minister before the day on which the Marihuana for Medical Purposes Regulations come into force, but the processing of the application has not been completed before that day, the Minister must process the application in accordance with these Regulations as they read on that day.

New Classes of Practitioners Regulations

251. Section 3 of the New Classes of Practitioners Regulations (see footnote 3) is renumbered as subsection 3(1) and is amended by adding the following:

Dried marihuana

(2) As provided by the Marihuana for Medical Purposes Regulations, a nurse practitioner, as a practitioner, may conduct an activity in respect of dried marihuana in accordance with section 3 or 128 of those Regulations if

Definition of “dried marihuana”

(3) For the purpose of subsection (2), “dried marihuana” has the same meaning as in subsection 1(1) of the Marihuana for Medical Purposes Regulations.

252. Paragraph 4(2)(b) of the Regulations is replaced by the following:

TRANSITIONAL PROVISIONS
Interpretation

Definitions

253. (1) For the purpose of sections 254 to 266, “authorization to possess”, “designated-person production licence”, “medical practitioner” and “personal-use production licence” have the same meaning as in subsection 1(1) of the Marihuana Medical Access Regulations.

Medical declaration

(2) For the purpose of sections 254 to 266, “medical declaration” means a medical declaration that is made by a medical practitioner in accordance with sections 6 and 8 of the Marihuana Medical Access Regulations.

Registration Based on an Authorization to Possess

Applicable period

254. Sections 255 and 256 apply until March 31, 2015.

Registration based on authorization to possess

255. (1) For the purpose of subsection 108(2), an individual applying to become a client of a licensed producer may include an authorization to possess with their application, instead of a medical document.

Ongoing validity of authorization to possess

(2) An authorization to possess that was valid immediately before the repeal of the Marihuana Medical Access Regulations remains valid solely for the purpose of being used as specified in subsection (1).

Modified application of Regulations

256. If, in accordance with section 255, a registration application under section 108 is made on the basis of an authorization to possess, the provisions of these Regulations, other than section 129, apply with the following modifications:

TABLE

Item

Column 1
Provision

Column 2
Modified text

1.

paragraph 5(a)
  • (a) in the case of dried marihuana obtained from a licensed producer in accordance with an authorization to possess, the quantity specified in the authorization;

2.

subparagraph 67(a)(ii)
  • (ii) the name of the medical practitioner that appears on the authorization to possess,

3.

subparagraph 67(a)(iv)
  • (iv) the daily quantity of dried marihuana determined by the formula
  • A / 30
  • where
  • A is the maximum quantity of dried marihuana specified in the authorization to possess,

4.

paragraph 101(1)(b)
  • (b) in respect of a individual who is a client of the producer, the daily quantity of dried marihuana determined by the formula
  • A / 30
  • where
  • A is the maximum quantity of dried marihuana specified in the authorization to possess supporting the client’s registration.

5.

subparagraph 108(1)(f)(iii)
  • (iii) subject to section 109, the address of the medical practitioner who made the medical declaration supporting the authorization to possess referred to in subsection 108(2).

6.

subsection 109(1)

(1) If the shipping address specified in a registration application is the one referred to in subparagraph 108(1)(f)(iii), the applicant must include with the application a statement, signed and dated by the medical practitioner who made the medical declaration supporting the authorization to possess referred to in subsection 108(2), indicating that the practitioner consents to receive dried marihuana on behalf of the applicant.

7.

section 110

110. (1) A licensed producer who receives an application under section 108 and intends to register the applicant as a client must communicate with the Minister to confirm the date of issue and date of expiry of the authorization to possess and, if applicable, the reference date indicated on the authorization and to confirm that the authorization has not been revoked.

(2) If the licensed producer registers the applicant as a client, the licensed producer must immediately notify the Minister in writing of the registration and the date of the registration, and provide the Minister with a copy of the authorization to possess.

8.

section 112

112. A client’s registration expires at the earlier of

  • (a) the date that is one year after the date of issue of the authorization to possess supporting the registration, and
  • (b) either
    • (i) the reference date indicated on that authorization, or
    • (ii) the date of expiry of that authorization, if that authorization has no reference date.

9.

paragraphs 113(d) to (f)
  • (d) the registration would begin after the reference date indicated on the authorization to possess submitted with the application;
  • (d.1) in a case in which the authorization to possess has no reference date, the authorization has expired;
  • (e) the name or date of birth of the applicant is different from the name or date of birth that appears on the authorization to possess;
  • (f) the Minister informs the licensed producer that the authorization to possess has been or will be revoked; or

10.

paragraphs 117(1)(d) and (e)
  • (d) the Minister informs the licensed producer in writing that the medical practitioner named in the authorization to possess supporting the client’s registration with the licensed producer has advised the Minister in writing that the continued use of dried marihuana by the client is no longer supported for clinical reasons; or
  • (e) the medical practitioner named in the authorization to possess is named in a notice issued under section 59 of the Narcotic Control Regulations that has not been retracted under section 60 of those Regulations.

11.

subsection 124(1)

(1) A licensed producer must not sell or provide to a client in any 30-day period a total quantity of dried marihuana that exceeds the maximum quantity specified in the authorization to possess supporting the client’s registration.
Registration Based on a Medical Declaration

Applicable period

257. Sections 258 and 259 apply until March 31, 2014.

Registration based on medical declaration

258. For the purpose of subsection 108(2), an individual applying to become a client of a licensed producer may include a medical declaration with the application instead of a medical document.

Modified application of Regulations

259. If, in accordance with section 258, a registration application under section 108 is made on the basis of a medical declaration, the provisions of these Regulations, other than paragraph 110(a) and section 129, apply with the following modifications:

TABLE

Item

Column 1
Provision

Column 2
Modified text

1.

paragraph 5(a)
  • (a) in the case of dried marihuana obtained from a licensed producer in accordance with a medical declaration, 30 times the daily amount specified in the medical declaration;

2.

subparagraph 67(a)(ii)
  • (ii) the name of the medical practitioner who made the client’s medical declaration,

3.

section 112

112. (1) A client’s registration expires at the earlier of

  • (a) the day that is one year after the day on which the medical declaration supporting the registration was signed by the medical practitioner, and
  • (b) if applicable, the day on which the period of usage specified in the medical declaration expires.

(2) For the purpose of paragraph (1)(b), the period of usage begins on the day on which the medical declaration was signed by the medical practitioner.

4.

paragraphs 113(d) to (f)
  • (d) more than one year has elapsed since the day on which the medical declaration submitted with the application was signed by the medical practitioner;
  • (d.1) if applicable, the period of usage specified in the medical declaration has expired, with that period being deemed to have commenced on the day on which the medical declaration was signed by the medical practitioner;
  • (e) the name or date of birth of the applicant is different from the name or date of birth that appears on the medical declaration;
  • (f) the medical practitioner who made the medical declaration informs the licensed producer in writing that the use of dried marihuana by the applicant is no longer supported for clinical reasons; or

5.

subsection 124(1)

(1) A licensed producer must not sell or provide to a client or an individual who is responsible for the client in any 30-day period a total quantity of dried marihuana that exceeds 30 times the daily amount specified in the medical declaration supporting the client’s registration.
Sale or Provision of Marihuana to Licensed Producer

Applicable period

260. Sections 261 to 266 apply until March 31, 2014.

Sale or Provision by Holder of a Personal-use Production Licence

Authorized sale

261. The holder of a personal-use production licence may sell or provide marihuana plants or seeds to a licensed producer if the holder does so in accordance with a notice of authorization issued by the Minister under subsection 263(2).

Application for authorization

262. (1) The holder of a personal-use production licence who proposes to sell or provide marihuana plants or seeds to a licensed producer must submit to the Minister an application for authorization of the proposed sale or provision that contains the following information:

Signature

(2) The application must be signed and dated by the holder of the personal-use production licence and by the licensed producer’s senior person in charge and include a statement by each of them indicating that all of the information submitted in support of the application is correct and complete to the best of that person’s knowledge.

Verification by Minister

263. (1) The Minister must, after examining the application and information required under section 262, verify if the following conditions are met:

Notice of authorization

(2) If the conditions are met, the Minister must send to both parties a notice of authorization of the proposed sale or provision that

Notice of refusal

(3) If the conditions are not met, the Minister must send to each of the parties a notice of refusal of the proposed sale or provision that sets out the reasons for the refusal.

Opportunity to be heard

(4) The parties may, within 10 days after the receipt of a notice of refusal, provide the Minister with reasons why the refusal is unfounded.

Sale or Provision by Holder of a Designated-person Production Licence

Authorized sale

264. The holder of a designated-person production licence may sell or provide marihuana plants or seeds to a licensed producer if the holder does so in accordance with a notice of authorization issued by the Minister under subsection 266(2).

Application for authorization

265. (1) The holder of a designated-person production licence who proposes to sell or provide marihuana plants or seeds to a licensed producer must submit to the Minister an application for authorization of the proposed sale or provision that contains the following information:

Signature

(2) The application must be signed and dated by the holder of the designated-person production licence, the holder of the authorization to possess and the licensed producer’s senior person in charge and include a statement by each of them indicating that all of the information submitted in support of the application is correct and complete to the best of that person’s knowledge.

Separate applications

(3) If a person is the holder of more than one designated-person production licence and proposes to sell or provide marihuana plants or seeds produced under each of those licences, a separate application must be submitted in respect of each licence.

Verification by Minister

266. (1) The Minister must, after examining the application and information required under section 265, verify if the following conditions are met:

Notice of authorization

(2) If the conditions are met, the Minister must send to the holder of the designated-person production licence, the holder of the authorization to possess and the licensed producer a notice of authorization of the proposed sale or provision that

Notice of refusal

(3) If the conditions are not met, the Minister must send to each of the persons referred to in subsection (2) a notice of refusal of the proposed sale or provision that sets out the reasons for the refusal.

Opportunity to be heard

(4) The recipients of a notice of refusal may, within 10 days after the receipt of the notice, provide the Minister with reasons why the refusal is unfounded.

REPEAL

267. The Marihuana Medical Access Regulations (see footnote 4) are repealed.

COMING INTO FORCE

Registration

268. (1) Subject to subsections (2) to (4), these Regulations come into force on the day on which they are registered.

October 1, 2013

(2) Section 244 comes into force on October 1, 2013.

March 31, 2014

(3) Subsections 203(2), 217(2), 221(3) and 222(3) and section 267 come into force on March 31, 2014.

March 31, 2015

(4) Subsections 221(4) and 222(4) come into force on March 31, 2015.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the regulations.)

Executive summary

Issues: In 2001, the Marihuana Medical Access Regulations (MMAR) were promulgated. The MMAR set out a scheme for Canadians to access marihuana for medical purposes, if they have the support of a medical practitioner.

Over the years, stakeholders expressed various concerns about the Marihuana Medical Access Program (the Program or MMAP). Program participants generally disliked the application process, and the fact that only a single strain of marihuana was available for purchase from Health Canada. Other stakeholders expressed health, safety, and security concerns relating to the production of marihuana by individuals in homes and communities. Their specific concerns related to the potential for diversion of marihuana to the illicit market due to limited security requirements, the risk of violent home invasion by criminals attempting to steal marihuana, fire hazards due to faulty or overloaded electricity installation to accommodate high intensity lighting for its cultivation, and humidity and poor air quality. Individual producers who were ill may have been more vulnerable to health risks associated with mould. As more individuals received licences to produce marihuana for medical purposes, the overall risk to Canadians increased.

Rapid growth in the number of authorized users also had significant implications for the administration of the Program, leading sometimes to long application processing times and higher Program administration costs for Health Canada. Finally, over the years, Canadian courts found various parts of the MMAR to be invalid, resulting in changes that affected program delivery.

Description: The Marihuana for Medical Purposes Regulations (MMPR, or the Regulations) will treat dried marihuana as much as possible like other narcotics used for medical purposes by creating a licensing scheme for the commercial production and distribution of dried marihuana for medical purposes. The MMPR will modify the New Classes of Practitioner Regulations (NCPR) and the Narcotic Control Regulations (NCR) and eventually repeal the MMAR. At the same time, changes to the Marihuana Exemption (Food and Drugs Act) Regulations (MER) will also be made. Health Canada will no longer issue authorizations to possess marihuana for medical purposes to individuals. This is expected to make accessing marihuana for medical purposes more efficient for individuals. It will also give them more options with respect to obtaining the support of an authorized health care practitioner, more choices of strains and suppliers, and provide increased access to quality-controlled marihuana. This, as well as ending Health Canada’s role in the production and supply of marihuana, will also reduce the cost of running the Program.

Following a transition period, individuals will no longer be licensed to produce marihuana, an activity which often occurs in homes. This will address the public health, safety and security concerns raised by stakeholders.

The MMPR will authorize three key activities: the possession of dried marihuana for medical purposes by individuals who have the support of an authorized health care practitioner; the production of dried marihuana by licensed producers; and the sale and distribution of dried marihuana by licensed producers and hospitals to individuals who can possess it. Licensed producers will be subject to regulatory requirements related to security; good production practices; packaging, labelling and shipping; record keeping and reporting; and distribution. They will also be subject to Health Canada inspections.

Upon coming into force, the MMPR will allow the holder of an authorization to possess or an individual who had obtained a medical declaration from their medical practitioner under the MMAR to obtain their supply of marihuana from a licensed producer by registering as a client with that producer. The MMAR will be repealed on March 31, 2014. All authorizations and licences issued under the MMAR will no longer be valid after this date. However, individuals will be able to use their expired authorizations to possess to register as a client with a licensed producer for up to one year after their date of issue, unless a period of usage of less than 12 months had been indicated in the medical declaration. No new Personal Use Production Licences (PUPLs) and Designated-Person Production Licences (DPPLs) will be issued if the application is submitted after September 30, 2013. Similarly, existing PUPL and DPPL holders will not be able to apply to change the location of their production site or to increase the daily amount as of this date.

Cost-benefit statement: The main economic cost associated with the MMPR will arise from the loss to consumers who may have to pay a higher price for dried marihuana. The analysis assumes a price increase from an estimated $1.80/g to $5.00/g in the status quo to about $7.60/g in 2014, rising to about $8.80/g, with a corresponding average annualized loss to consumers (in consumer surplus terms) due to higher prices of approximately –$166.1M per year for 10 years. The major benefits of the MMPR are projected to include reduction in safety and security risks posed by marihuana cultivation in homes, reduction in Program administrative costs, and benefit to producers due to a higher market price and a reduction in economic inefficiency from the removal of government subsidies on marihuana sold by Health Canada. On average, the estimated total annualized benefit is $149.8M per year. Consequently, the quantitative analysis indicated an overall discounted net loss of –$109.7M for the first 10 years of the MMPR (2014 to 2024) or, an annualized average value of approximately –$16.35M a year.

Given the unique nature of the Regulations and the need to make assumptions about some aspects of what, until now, has been an illicit market with the exception of the supply produced under licences to produce, and under contract with Health Canada, the quantitative analysis was supplemented by a comprehensive qualitative evaluation of potential benefits which could not be quantified or monetized. These were considered highly contingent on a number of economic, social and regulatory factors which have been factored into the Program evaluation, but which may not emerge until near the end of, or after, the 10-year projection period for the quantified cost-benefit analysis (CBA).The qualitative analysis, however, showed that these benefits are likely to be significant. Further details can be found in the “Non-quantified benefits” section of this document.

“One-for-One” Rule: Canadian courts have determined that, under the Canadian Charter of Rights and Freedoms, individuals who have demonstrated a medical need for marihuana have a right to reasonable access to a legal source of marihuana for medical purposes. At the same time, marihuana is a controlled substance for which there is considerable risk of diversion to the illicit market. Thus, there is a need to ensure that sites which produce marihuana for medical purposes are secure and have secure distribution methods. Hence, while it is recognized that the MMPR will impose administrative burden on business, it is also recognized that the unique and exceptional circumstances, in combination with the findings of Canadian courts that individuals who need marihuana for medical purposes have a right to reasonable access to a legal source of marihuana under the Charter, merit an exemption from the “One-for-One” Rule. Health Canada will not be required to offset the burden associated with this proposal with an equivalent reduction in administrative burden.

Domestic and international coordination and cooperation: The MMPR is consistent with Canada’s international trade obligations, as well as its commitment to maintain control over the production and distribution of marihuana, as required by international conventions on the control of narcotic drugs and psychotropic substances. In addition, Health Canada notified the United States Drug Enforcement Administration that a new program was under consideration in which individuals would no longer be licensed to produce their own marihuana and licensed producers would be the only legal source of marihuana supply. Federally, the MMPR establish new requirements that are consistent with Health Canada’s responsibility to regulate activities with controlled substances. The Regulations take provincial/territorial jurisdiction into consideration, particularly concerning issues such as establishing requirements for local businesses and the delivery of health services.

Performance measurement and evaluation: An evaluation of the MMPR will occur five years after implementation and every five years thereafter. The evaluation will assess the achievement of outcomes of the MMPR along with those of any administrative and program support systems put in place.

Background

Marihuana for medical purposes is regulated under both the Controlled Drugs and Substances Act (CDSA) and the Food and Drugs Act (FDA). The CDSA and its regulations provide a legislative framework for the control of substances that can alter mental processes and that may produce harm to the health of an individual and to society when diverted or misused. The legislative framework prohibits the possession, trafficking, production, importation and exportation of controlled substances except where authorized, such as under regulations.

The FDA and its regulations provide a framework to regulate the safety, efficacy and quality of drugs. The Food and Drug Regulations (FDR) set out a framework for the authorization of drugs for sale in Canada. Drug manufacturers submit evidence on the efficacy dosage, route of administration, contraindications, side effects, and quality of a drug. If Health Canada reviewers conclude that the overall benefits of the drug outweigh its risks, the product will be authorized for sale in Canada.

There are a number of products containing cannabis which have been authorized for sale under the FDR in Canada. These include

In all of these cases, the manufacturers were required to meet the requirements of the FDA and its regulations in order to sell these products in Canada.

To date, scientific studies do not demonstrate conclusively that dried marihuana is safe and effective for medical use. Most scientific studies to date focus on chemicals sourced from marihuana, not dried marihuana itself. Consequently, dried marihuana has not been authorized as a therapeutic product in Canada or in any other country. However, Canadian courts have found that individuals who need marihuana for medical purposes have a right to reasonable access to a legal source of marihuana. Therefore, production of dried marihuana in the past was exempted from application of the FDA and its regulations with the exception of marihuana sold or imported to be used for the purpose of a clinical trial.

Canadians have been able to access dried marihuana for medical purposes since 1999, when the Marihuana Medical Access Program (the Program) was first established. At the time, individuals were authorized to possess dried marihuana and/or produce a limited number of marihuana plants for medical purposes via the issuance of an exemption under section 56 of the CDSA.

In 2000, the Ontario Court of Appeal (R. v. Parker) held that the prohibition on the possession of marihuana violated the right to liberty and security of a person under the Charter, because Mr. Parker could not find a practically available legal route to possess dried marihuana for medical purposes. In response, the MMAR were established in 2001 and set out a scheme by which seriously ill Canadians could, with the support of a medical practitioner, obtain an authorization to possess dried marihuana for their own personal medical use. Under the MMAR, authorized persons had three options to obtain a supply of dried marihuana:

The supply and distribution scheme established by the MMAR was amended several times. In some cases, this was the result of concerns expressed by stakeholders; in others, it was to address Court decisions that invalidated sections of the Regulations, which were found to hinder access.

In 2003, the Ontario Court of Appeal (Hitzig v. Canada) held that the MMAR were constitutionally defective because they did not provide for reasonable access to a legal source of supply of marihuana for medical purposes. The Court invalidated five provisions of the MMAR that it found constituted barriers to eligibility and supply but acknowledged that the Government could choose to adopt a fundamentally different approach. The MMAR were amended to give national effect to certain elements of the Court’s remedy, and also to implement an option for authorized persons to obtain access to a legal supply of dried marihuana and marihuana seeds. However, the requirements for a medical document and for a daily limit fixed by a medical practitioner were found to be reasonable by the Court.

In 2005, based on a broader review of the MMAR and on input received from stakeholders during a comprehensive consultation process, Health Canada proceeded with a second phase of amendments to the MMAR. The primary objective of the amendments was to streamline the regulatory requirements associated with applying for an authorization to possess. Both the applicant’s declaration and the medical declaration were therefore simplified. The MMAR were also amended to provide limited authority for pharmacists to supply marihuana to authorized persons. These amendments were intended to maintain an appropriate balance between providing seriously ill persons with reasonable access to a legal source of marihuana for medical purposes and the need to regulate it.

In 2009, the MMAR were amended to raise the limit on the number of production licences a designated person could hold from one to two. This followed a 2008 Federal Court of Appeal decision (Sfetkopoulous v. Canada) to uphold the Federal Court’s declaration that the one producer to one user ratio set out in the MMAR unjustifiably limited the ability of authorized persons to access marihuana for medical purposes. The Federal Court was of the view that licensed producers having larger operations could make economies of scale and a level of income that would allow them to put in place quality control and security measures. The Court also observed that with fewer producers having larger operations, a system of inspection would be much easier to sustain than the system of one consumer to one producer. The amendment was an interim measure intended to address the Court’s decision while the Program and the MMAR were being reassessed.

In 2010, Health Canada amended the MMAR to address the 2009 British Columbia Supreme Court decision (R. v. Beren) that struck down the one producer to one user ratio as well as the limit of three producers per location. The Court adopted the reasoning in Sfetkopoulos and was of the view that licensed producers having larger operations could provide an adequate supply, carry out research on the efficacy of varying strains of marihuana and make economies of scale. The Government had already addressed the producer to user ratio issue by raising the limit on the number of production licences a designated person can hold from one to two. This regulatory initiative introduced a new limit of four to the number of production licences that could be issued with reference to the same production site. In other respects, the Court ruled that the MMAR requirement for the support of a physician was justified.

The Court decisions leading to the 2009 and 2010 amendments support Health Canada’s position that dried marihuana for medical purposes should be produced and distributed as much as possible like other narcotics used for medical purposes.

Issue

Growth in Program participation has had unintended consequences for the administration of the MMAR, but more importantly, for public health, safety and security as a result of authorizing individuals to produce marihuana for medical purposes under PUPLs and DPPLs in private dwellings.

In 2002, 477 individuals were authorized to possess marihuana for medical purposes. As of April 16, 2013, this had grown to 29 888 individuals. If the Program continues to grow at this pace, it is estimated that by 2014, over 50 000 individuals will be authorized to possess marihuana for medical purposes.

One result of increased participation in the Program is increased application volume for Health Canada. This results in increased staffing costs, but more importantly, it results in a 10-week service standard for processing applications. Many Program participants have expressed concerns regarding the length of time it takes to obtain an authorization to possess.

Of the 29 888 Program participants on April 16, 2013, 12% access Health Canada’s supply of dried marihuana, 67% produce under a PUPL, and 16% produce under a DPPL. The remaining 5% indicate in their application that they will buy from Health Canada, but ultimately do not. Health Canada does not have access to information regarding where these Program participants obtain their supply of marihuana for medical purposes.

Increases in the number of licences, as well as the co-location of up to four licences on one site, can result in large quantities of marihuana being produced in homes and communities. In addition, the average daily amount (i.e. “dosage”) has continually increased since 2002 to almost 10 g per day now which, if produced indoors, is approximately 49 plants. Under the MMAR, the number of plants that may be produced under a licence to produce is calculated based on the daily amount agreed upon by the medical practitioner and the applicant. Program participants who either produce their own or have designated producers are the group where the daily amount has increased the most. There are now approximately 70% who produce 25 plants or more.

Municipalities and first responders, such as fire and police officials, have raised serious public health and safety concerns regarding production of marihuana in private dwellings. Under the Program, applicants are not required to disclose their intent to produce to local authorities. Production sites, most often in private dwellings that are not constructed for large-scale horticultural production, are often in locations unknown by local authorities. Production activities are also linked to the presence of excess moisture in homes creating a risk of mould (particularly associated with drying of marihuana); electrical hazards creating a risk of fire; and exposure to toxic chemicals like pesticides and fertilizers creating risk to residents, including children. Such issues may not only have an impact on individual producers, but also potentially on those living at the same address, adjacent residential units, and/or in the surrounding community, who may not even suspect the existence of these risks. Because the MMAR were never intended to permit larger-scale marihuana production, they do not adequately address these public health, safety and security concerns. There are practical difficulties in imposing stringent quality and safety standards on production operation by producers of marihuana for medical purposes that may lack the capacity to implement them.

Police have also raised concerns that residential production activities leave the Program vulnerable to abuse, including criminal involvement and diversion to the illicit market, particularly given the attractive street value of marihuana ($10–$15/gram for dried marihuana). It is impossible to conduct effective inspection of the numerous production sites across the country, particularly given the legal requirement to obtain either permission or a warrant to enter a private dwelling. Finally, production in homes may leave residents and their neighbours vulnerable to violent home invasion by criminals who become aware that valuable marihuana plants are being produced and stored in the home.

Another implication of Program growth is an increase to the cost of producing and distributing dried marihuana for Health Canada. The existing supply contract has a value of $16.8 million (excluding GST) for a three-year period, ending on March 31, 2013. An additional option year has been built into the contract, and has been exercised. It is estimated that this additional year will cost Health Canada $9.7 million. These high contract costs are despite the fact that only a minority of Program participants indicate this supply option in their application. Health Canada heavily subsidizes the cost of marihuana for medical purposes by covering the shipping costs and charging only $5/gram, an amount substantially below the cost of production and distribution. The Government collected approximately $1,686,600 in revenue from sales of dried marihuana and seeds in the 2011–2012 fiscal year.

Objectives

The objective of the MMPR is to reduce the risks to public health, security and safety of Canadians, while significantly improving the way in which individuals access marihuana for medical purposes.

To reduce the risks to public health, security and safety of Canadians, a new supply and distribution system for dried marihuana that relies on commercial production of marihuana for medical purposes will be established. Security requirements will be in place for the production site and key personnel of the licensed producer. Standards for packaging, transportation and record keeping will contribute to achieving security objectives.

The process for individuals to access marihuana for medical purposes will no longer require applying to Health Canada. Individuals will be able to obtain marihuana, of any strain commercially available, with information similar to a prescription from an authorized health care practitioner (a physician or, potentially, a nurse practitioner, where supporting access to marihuana for medical purposes is included under their scope of practice or in legislation). Quality and sanitation standards appropriate for a product for medical use will be in place. In line with other controlled substances, personal and designated production will be phased out. This will reduce the health and safety risks to individuals and to the public while allowing for a quality-controlled and more secure product for medical use.

Health Canada will no longer receive and process applications or issue authorizations and licences for personal production, nor continue to produce and supply marihuana for medical purposes. Health Canada will not enter into future contractual arrangements for the production and distribution of marihuana for medical purposes. The new regulatory scheme returns Health Canada to its traditional role of regulator rather than producer and service provider, while striking a better balance between access and risks to public health and safety.

Description

The Marihuana for Medical Purposes Regulations will authorize the following key activities:

The MMPR will also allow individuals who hold an authorization to possess under the MMAR to transition to the new framework using their authorization for up to one year after its date of issue (unless a period of usage of less than 12 months has been indicated in the medical declaration). Individuals could also transition using a medical declaration issued under the MMAR.

Licences to produce issued under the MMAR will be phased out, while renewals will continue normally. New licences to produce will not be issued if the application is submitted after September 30, 2013, because there will not be enough time to produce a crop before the repeal of the MMAR on March 31, 2014. Applications to amend a licence for a site change or increase the daily amount will not be issued if the application is submitted after September 30, 2013, for the same reason (see “Implementation, enforcement and service standards”). All personal production licences (i.e. PUPL and DPPL) will end on March 31, 2014.

1. Possession of dried marihuana by individuals who have the support of an authorized health care practitioner
Possession of dried marihuana

Individuals will no longer have to apply to Health Canada for an authorization to possess dried marihuana for medical purposes. Instead, individuals who require marihuana for medical purposes will be able to legally possess dried marihuana if it was obtained under the MMPR from a licensed producer with a supporting medical document from an authorized health care practitioner. Similarly, an individual responsible for a person who requires marihuana for medical purposes will be able to legally possess dried marihuana under these circumstances. Individuals will be authorized to possess the lesser of 150 g or 30 times the daily quantity stipulated by the authorized health care practitioner.

Under the MMPR, individuals will be able to demonstrate that they are in legal possession of dried marihuana by showing a law enforcement official a client-specific label affixed to the product, or an accompanying client-specific document, as well as an appropriate piece of photo identification (see “Packaging and labelling”). Licensed producers will also be required to confirm to a member of a Canadian police force, in the context of an investigation, whether a named individual is a registered client or an individual responsible for a registered client.

Obtaining a supply of dried marihuana

To obtain dried marihuana for medical purposes, an individual will see an authorized health care practitioner and obtain a medical document, requirements for which are specified in the MMPR, signifying the health care practitioner’s support for their access to marihuana and indicating, among other things, the supported daily quantity in grams. Individuals can then send the original medical document to a licensed producer of their choice. A medical document will allow an individual to register with a licensed producer for the period of use indicated by the authorized health care practitioner, but for no more than one year. After registering as a client, individuals will be able to order dried marihuana from the licensed producer. However, licensed producers will not be allowed to sell or provide more than 30 times the daily amount in any 30-day period, taking into consideration the expected length of time for the shipment to reach the registered client, nor will they be able to ship more than 150 g at a time. Health Canada will publish the name and contact information of each licensed producer on its Web site to help individuals select a supplier. If an individual wishes to purchase a variety of strains that are not all available from one licensed producer, the MMPR will permit the individual to do so by obtaining a new medical document. They will have to discuss this with their health care practitioner. The health care practitioner will have to divide the daily quantity between multiple medical documents.

A registration will not be transferable from one licensed producer to another. If an individual wants to change licensed producers, they will be required to obtain a new original medical document which they will use to register with another licensed producer. This is consistent with practices for prescription narcotics, as these are not transferable from pharmacy to pharmacy. The CDSA requires individuals seeking or obtaining an authorization to obtain a controlled substance from a practitioner to disclose to the practitioner the particulars of any controlled substance they obtained or any authorization to obtain any controlled substance that they received in the 30 previous days.

Authorized health care practitioners

Health Canada maintains that the determination as to whether the use of dried marihuana for medical purposes is appropriate for a particular individual is best made through a discussion with their authorized health care practitioner. The MMPR will include a new definition of authorized health care practitioner that includes physicians in all provinces and territories (P/Ts), and will also include nurse practitioners in P/Ts where supporting access to marihuana for medical purposes is included under their scope of practice or in legislation. This is consistent with Health Canada’s approach to other controlled drugs and substances used for medical purposes in the New Classes of Practitioners Regulations (NCPR).

In the NCPR, marihuana is listed as a substance that nurse practitioners are not able to prescribe; however, following consideration of feedback received during stakeholder consultations, the MMPR amend the NCPR to remove this exclusion.

This role will not be expanded beyond nurse practitioners. Nurse practitioners are regulated professionals in all provinces and territories. With the exception of Yukon, they are authorized to autonomously diagnose and treat health conditions and prescribe medications. This is because they have gained additional competencies through training and education, as well as substantial clinical experience. In most jurisdictions, they have also been deemed to have the competencies required to prescribe medications that contain controlled substances.

The MMPR do not include categories of symptoms and conditions, and there will no longer be a requirement for some individuals to obtain the support of a specialist in addition to that of their primary care physician in order to access marihuana for medical purposes. An individual who needs to access dried marihuana for medical purposes could obtain a medical document from an authorized health care practitioner. The medical document will contain similar information to that on a prescription. Specifically, the authorized health care practitioner will have to indicate their licence information, the location of the medical assessment, the name and date of birth of their patient, a period of use of up to one year, and a daily quantity of marihuana in grams.

The ability of authorized health care practitioners to sell or provide marihuana for medical purposes to patients under their care has been removed from the MMPR, following publication of the proposed Regulations in the Canada Gazette, Part I (i.e. prepublication). Health care practitioners, medical associations, professional regulatory bodies and others submitted strong objections during the comment period concerning the potential for conflict of interest affecting physicians and nurse practitioners who may have been in the position to both prescribe and also sell dried marihuana (see section on consultation). In response to such comments, Health Canada made the decision to remove the authority for health care practitioners to sell or provide dried marihuana to patients under their care from the Regulations. This has been replaced with the authority for health care practitioners to “transfer” (that is, provide dried marihuana without consideration) to a person under their professional care or to an individual who is responsible for that person. The authority to “transfer” does not permit an authorized health care practitioner to provide dried marihuana in exchange for something of value from an individual. In their role as health care providers and first point of contact for patients, authorized health care practitioners support access by signing the medical documents with which an individual may obtain dried marihuana under the MMPR. In a hospital setting, a health care practitioner may administer or transfer dried marihuana to a patient as permitted by the person in charge of the hospital and as authorized under the NCR.

These revisions address some significant concerns expressed by stakeholders. However, it is not expected to adversely affect an individual’s access to marihuana for medical purposes from licensed producers.

Under the MMAR, physicians who sign medical declarations must sign a statement indicating they are aware that no notice of compliance has been issued under the FDR relating to the safety or efficacy of dried marihuana, as well as a statement indicating that conventional treatments have been tried or considered and are ineffective or medically inappropriate. The MMPR will not require authorized health care practitioners to make specific declarations with respect to the use of marihuana for medical purposes, the effectiveness or appropriateness of other therapies, or the regulatory status of marihuana. This is expected to reduce the complexity of the physician’s role in access to marihuana for medical purposes.

Authorized health care practitioners may wish to receive more comprehensive information about the potential risks and benefits of using marihuana for medical purposes in order to guide them in their discussions with their patients. Health Canada has established an expert advisory committee to assist in providing comprehensive scientific information about the uses of marihuana to authorized health care practitioners.

2. Production of dried marihuana by licensed producers

The MMPR set out a licensing scheme that is intended to allow for larger-scale production, comparable to that for other narcotics used for medical purposes. This will permit commercial production while regulating the quality and security of dried marihuana, thus reducing public health, safety and security risks.

Production sites will only be located indoors, and not in a private dwelling. This will reduce the risks of diversion posed by outdoor production and the health and safety risks associated with producing marihuana in a private dwelling. Indoor production also addresses the risk of cross-contamination with other nearby crops, particularly industrial hemp.

Licensing

Either an individual or a corporation will be eligible to become a licensed producer. In their application, applicants will have to describe the activities they wish to conduct with marihuana and the purpose for conducting those activities. Licensed producers could also become licensed to conduct certain activities with standardized samples of chemicals that occur naturally in the marihuana plant in order to conduct analytical testing of dried marihuana. For example, they will need to possess pure samples of THC and cannabidiol in order to determine the percentage of THC and cannabidiol in marihuana. In the MMPR, and in this document, cannabis is an inclusive term that is used to capture all of the substances in the scope of the MMPR (e.g. substances such as THC and cannabidiol, as well as marihuana). (see footnote 6)

A number of conditions will have to be met before the issuance of a licence. The licensed producer will have to designate key personnel under their licence. The senior person in charge will have overall responsibility for management of the activities carried out at the licensed site, while the responsible person in charge (RPIC), and alternate RPICs if applicable, will supervise all activities being carried out with marihuana and cannabis other than marihuana (i.e. pure samples of THC and cannabidiol). Key personnel, along with directors and officers in the case of a corporation, will have to hold a valid security clearance, issued by the Minister of Health (see “Security” section for further details).

The applicant for a production licence would also have to provide a written notification of their application to the local police force, local fire authority and local government. The notice will have to specify the activities for which the licence will be sought, and the address of the site at which activities would be conducted. In response to comments received during prepublication, the MMPR have been revised to include a requirement for licensed producers to also communicate with local authorities when there is a change in the status of their licence. A provision has been added to the revised Regulations to require a licensed producer to notify the same authorities previously notified, when the licence is granted, an amendment is approved, the licence is suspended or revoked for any reason, or when the licence is reinstated. Further, the revised Regulations allow the Minister of Health to confirm licence information to the authorities originally notified by an applicant upon receipt of such a request.

The applicant will have to provide information that allows Health Canada to assess whether the applicant has certain key measures in place. The applicant will have to provide the following:

The MMPR also outline a number of reasons for which the Minister of Health (the Minister) will be required to refuse to issue, renew or amend a licence. These include

Once issued, a licence will be valid for up to three years, and could be renewed. The MMPR also set out a process for amendments to any information on the licence (e.g. the licensed producer wishes to increase its production yield or change sites).

Obtaining starting materials

Licensed producers will be able to legally obtain their starting materials in several ways. With a specific authorization from Health Canada, they will be able to purchase marihuana seeds or marihuana plants from individuals who hold valid PUPLs and DPPLs, or they will be able to import marihuana with the appropriate permits (see “Import and export”). They could also purchase Crown stock seeds from Health Canada. Finally, the MMPR will permit licensed producers to obtain marihuana from one another or from a licensed dealer under the NCR.

Import and export

Licensed producers will be permitted to engage in the import or export of marihuana if they have obtained an import or export permit from Health Canada. The import/export permit scheme will be similar to that for other controlled substances and is intended to maintain control over the movement of controlled substances, consistent with Canada’s obligations under international conventions on the control of narcotic drugs and psychotropic substances.

Good production practices

The FDA will apply to marihuana produced under the MMPR and will prohibit licensed producers from selling dried marihuana that had been produced under unsanitary conditions or that had been adulterated.

Licensed producers will also be subject to good production practices (GPPs) outlined in the MMPR. These requirements will require cleanliness of the premises and equipment. The licensed producer will also be required to employ a quality assurance person with appropriate training, experience, and technical knowledge to approve the quality of dried marihuana prior to making it available for sale. Finally, licensed producers will have to test dried marihuana for microbial and chemical contaminants and ensure they are below generally accepted tolerance limits for herbal medicines for human consumption, as established in any publication referred to in Schedule B to the FDA (i.e. various pharmacopoeia and formularies). These requirements will provide individuals who require marihuana for medical purposes with access to a product that does not — by reason of the manner in which it was produced, packaged, labelled or stored — pose undue risk to the health of an individual.

To date, dried marihuana has not been subject to all requirements of the FDA and its Regulations. Therapeutic products, such as echinacea or acetaminophen used for medicinal purposes, are subject to manufacturing controls. In moving to treat marihuana as much as possible like other narcotics used for medical purposes and taking into consideration concerns about quality control and other aspects governed by the FDA, the FDA will apply to activities of licensed producers. The FDR will apply as set out in the new MER.

Packaging and labelling

Dried marihuana will have to be packaged in a tamper-evident and child-resistant container. The maximum package size will be 30 g. Each package will contain standard information about the product, including the weight in grams, the percentage by weight of delta-9-tetrahydrocannabinol (THC) and of cannabidiol, the packaging date, the expiry date if one has been established by stability testing, and a warning statement to “KEEP OUT OF REACH OF CHILDREN.”

The licensed producer will also have to affix a client-specific label, similar to a patient-specific prescription drug label, to the package of dried marihuana. This label will contain the names of the client and the authorized health care practitioner who provided the medical document, the daily quantity of dried marihuana and the end of the validity period as indicated on the medical document. The label will also include the shipping date and the anticipated date of delivery to the registered client. The licensed producer will have to produce a separate duplicate document of this label to send to clients. This duplicate document or the product label, as well as an appropriate piece of photo identification, could serve to demonstrate legal possession (see “Possession of dried marihuana” above).

Each package of dried marihuana sold to a client will also need to be accompanied by a copy of the most recent version of the Health Canada document entitled Information on the Use of Marihuana for Medical Purposes. This document indicates that the safety and efficacy of dried marihuana for medical purposes has not been established and provides a summary of the known information about the uses and risks of marihuana for medical purposes so that individuals could be informed about their treatment choice.

The FDA provisions will also apply to prohibit labelling, packaging or selling in a manner that is false, misleading or likely to create an erroneous impression about the character or safety of the drug. For example, unsubstantiated health claims cannot be put on product packaging. Advertising any narcotic to the general public is prohibited under the NCR, and this prohibition will continue to apply to dried marihuana. As with other narcotics, this is intended to prevent known and potential harms to the health of Canadians who are vulnerable with respect to advertising of prescription drugs because they do not have the level of expertise to make informed choices regarding their use. To help individuals select a supplier, Health Canada will publish the name and contact information of licensed producers on its Web site.

3. Direct sale and distribution of dried marihuana to individuals authorized to possess it

Individuals who require marihuana for medical purposes have different avenues to obtain it under the MMPR. Dried marihuana could be sold or provided directly to registered clients by the licensed producer through secure shipping only. It could also be sold or provided by hospitals, which could purchase it directly from licensed producers.

Distribution through licensed producers

The primary means of distribution of dried marihuana will be directly from the licensed producer to the registered client using secure shipping methods, as the MMPR do not allow for store-front or retail distribution centres. This is how PPS has distributed dried marihuana and marihuana seeds to Program participants since 2003. This method has proven to be secure and to adequately mitigate the risk of diversion.

Health Canada will not regulate the price of marihuana under the MMPR. It will be up to licensed producers to set the price.

Before selling dried marihuana to an individual, a licensed producer will have to register the individual as a client. In the process of registering a client, licensed producers will have to verify that the supporting authorized health care practitioner is entitled to practice their profession in the province in which they were consulted by the prospective client and that they have not been prohibited from prescribing narcotics. These tasks are similar to those conducted by a pharmacist when filling out a prescription. The licensed producer will also have to confirm with the office of the authorized health care practitioner that the information in the medical document, including the daily quantity, is correct and complete.

Shipping

Dried marihuana will have to be shipped directly to a registered client using a shipping service that includes a means of tracking the package during transit. It will have to be sent in only one shipment per order. Finally, dried marihuana will have to be securely packed and shipped in a container that will not allow the contents to be identified visually or by odour.

Dispensing dried marihuana through pharmacists

The MMAR enabled pharmacists to dispense marihuana that had been produced by a licensed dealer under contract with Her Majesty in right of Canada to the holder of an authorization to possess. This provision was added in 2005 when some provinces and territories expressed an interest in allowing pharmacists to undertake this activity. Dispensing of marihuana for medical purposes by pharmacists has never been done to date.

The ability of pharmacists to dispense marihuana for medical purposes has been removed from the MMPR, following prepublication. Pharmacists and pharmacists’ associations and professional licensing bodies, as well as provinces and territories, submitted comments expressing concerns with the dispensing of dried marihuana through pharmacies (see “Consultation” section). To address these concerns, Health Canada has revised the MMPR to remove the authority for pharmacists to dispense marihuana for medical purposes as long as their activities were also authorized under P/T legislation. Like other hospital employees, a pharmacist who is a hospital employee may order, administer or sell or provide dried marihuana to a patient at the hospital, if permitted by the person in charge of the hospital to do so, and as authorized under the NCR.

Other overarching requirements
Security

According to law enforcement officials, organized crime groups are involved in the trafficking of marihuana, and the profits derived from this activity allow them to support themselves and participate in the trade of other illicit commodities. The security measures required in the MMPR are therefore designed not only to ensure that licensed producers take steps to ensure the physical security of their site, but also to prevent infiltration by criminal groups who may wish to exploit the lawful production of marihuana for medical purposes for illicit purposes. In contrast, licences to produce issued under the MMAR did not carry any prescriptive physical security requirements; therefore, the associated production sites are more vulnerable to violent intrusions, theft and diversion.

Health Canada’s Directive on Physical Security Requirements for Controlled Substances establishes security requirements for the storage of all controlled substances. These requirements are scaled to the illicit market value of the controlled substance and to the crime rates in various areas. This directive will apply to the storage of cannabis other than marihuana plants, by licensed producers.

The MMPR also set out physical security requirements for the entire site, as well as for areas within a site where cannabis is present. These will include all areas where a licensed activity is conducted with marihuana and cannabis other than marihuana (i.e. a lab, the production room, the area where dried marihuana is packaged and labelled). Access to these areas will have to be restricted only to individuals whose presence is required because of their work responsibilities. Licensed producers will have to put systems in place to ensure that access is controlled at all times, as well as 24-7 visual monitoring systems to detect unlawful conduct. The restricted areas will also have to be secured by an intrusion detection system that will detect attempted or actual unauthorized access to the area. The same principles of visual monitoring and intrusion detection will apply to the perimeter of the entire site. Licensed producers will also have to ensure the site and its restricted areas include physical security barriers designed to prevent unauthorized entry. Personnel monitoring the security and surveillance systems of a licensed site must take action in response to a detected incident and record the details of the action(s) taken. Should an applicant for a licence fail to demonstrate that they have put in place appropriate physical security measures as outlined in the MMPR, the production licence will be refused.

The MMPR also include requirements that the holder of the production licence, directors and officers (in the case of a corporation) and all key personnel must hold enhanced security clearances prior to the issuance of a producer’s licence. To obtain an enhanced security clearance, these individuals will be required to submit an application with personal information and documents to Health Canada, so that checks and verifications of relevant files of law enforcement agencies could be conducted. As well as criminal record checks, these clearances will involve a global evaluation of the applicant’s potential associations with criminal or violent organizations, associations with individuals linked to such organizations, and the risk of whether the applicant might be induced to assist, abet or commit any act that will pose a risk to the control of the production and distribution of cannabis. Should the applicant not successfully obtain a security clearance, the production licence will be refused.

Information sharing

The MMPR include provisions that will require licensed producers to share information with appropriate authorities in certain circumstances. For example, as with the MMAR, law enforcement needs a way to verify whether a named individual is a registered client of the producer. If a member of a Canadian police force requires information in the course of an investigation, a licensed producer will be required to confirm as soon as practicable whether the individual is a registered client or an individual who is responsible for a registered client and the daily quantity of dried marihuana specified in the medical document.

Record keeping

As described under the MMPR, licensed producers will have to keep records of their activities with cannabis, including all transactions (sale, exportation, and importation), all dried marihuana returned from clients, and an inventory of cannabis (e.g. seeds, fresh harvested marihuana, dried marihuana and packaged marihuana). All records will have to be kept for a period of at least two years, in a format that will be easily auditable, and will have to be made available to Health Canada upon request.

In addition to the revisions to the MMPR following prepublication in the Canada Gazette, Part I, on December 15, 2012, described above, other changes have been made to clarify and/or refine the Regulations as well as to make minor corrections. Of more significance were the following:

Regulatory and non-regulatory options considered

In addition to the approach described above, the following options were considered.

Health Canada continues to authorize individuals to possess dried marihuana for medical purposes, but the MMAR supply options would be replaced with licensed production by private industry

Under this option, Health Canada would establish a licensing framework to allow for a commercial industry for the production and distribution of dried marihuana for medical purposes. Personal and designated production of dried marihuana for medical purposes would be eliminated, and Health Canada would no longer produce and distribute marihuana directly to individuals, eliminating related contract costs. However, Health Canada would continue to authorize individuals to possess dried marihuana for medical purposes. This would mean that individuals would have to apply to Health Canada for an authorization prior to registering as a client with a licensed producer. Health Canada would continue to issue authorization documents and maintain a database of all authorized persons.

This is not the preferred option because it is inconsistent with one of the key objectives of reform, which is to treat marihuana as much as possible like other narcotics used for medical purposes. Furthermore, as the numbers of users of marihuana for medical purposes are expected to continue to grow, Health Canada would continue to incur high administrative costs by maintaining this role.

Status quo

Under this option, Health Canada would maintain the Program under the MMAR in its current form. Health Canada would continue to issue authorizations to possess, PUPLs and DPPLs to program applicants. In order to manage the expected growth in applications, Health Canada would have had to review its administrative processes and its Program infrastructure to look for additional efficiencies. Given that the numbers of individuals in the Program continued to rise, costs for such a contract would have also continued to rise on an annual basis.

Additionally, Health Canada could consider raising the price of dried marihuana to cover the actual cost of production and distribution.

Health Canada could also have expanded its capacity to inspect PUPLs and DPPLs. However, an effective inspection program for thousands of sites across the country would have been costly. In addition, Health Canada’s inspectors would not have been able to address public health, safety and security concerns expressed by stakeholders, such as electrical hazards, humidity and poor air quality in personal and designated production sites.

The status quo did not respond to stakeholder concerns about the health and safety risks of personal production. Also, as legal challenges against the MMAR continue, and as the number of individuals entering the Program would continue to rise, Health Canada would face rising pressures that would be difficult to contain.

Benefits and costs

The cost-benefit analysis (CBA) was based on a projected scenario that represents the most likely outcome of the regulatory change. A sensitivity analysis of the results was undertaken for a range of key parameters to capture the effect of uncertainty for each variable used in the analysis of the estimated costs and benefits.

The study focused on the consumption of marihuana, obtained from legal sources of supply, for medical purposes. The broader issue of illicit market supply and use was considered to be outside the scope of the analysis.

Marihuana for medical purposes is not an approved therapeutic product and the scientific studies of its safety and efficacy are not conclusive. The CBA made no attempt to measure real or perceived health costs or benefits in terms of therapeutic effects or improvements to quality of life. Instead, the study relied on estimating purely economic impacts on the basis of a change in consumer surplus that could arise from the MMPR.

Projected number of potential users

The number of persons using marihuana for medical purposes was projected over the 10-year forecast period, from 2014 to 2024, based on historical patterns of use under the Program and an estimated upper limit. This limit represents the number of people who indicated they used marihuana for medical purposes in the most recent (2011) population-level survey of Canadians aged 15 years and over.

Under both the status quo scenario and the MMPR, the analysis assumed the historical growth rate in authorized users of approximately 40% per annum to continue over the policy impact period (2014–2024). Under the status quo scenario, the number of potential users of marihuana for medical purposes was projected to increase from a base number of 57 799 in 2014 to about 433 688 in 2024, slightly below the upper limit of 450 000. While the absolute number of legal users is still expected to increase over time, this increase was projected to be approximately 30% less over the 10-year period under the MMPR compared to the status quo scenario. This will mean an increase from a low projected estimate of 41 384 in 2014 to approximately 308 755 users by the end of the 10th year of implementation.

Benefits

The analysis quantified and monetized the beneficial impacts of the MMPR in terms of the reduction in risks associated with residential marihuana cultivation such as electrical fire hazards, potential home intrusions by criminals and the risks of sustaining serious injury or death in either case. Benefits were also estimated in terms of economic efficiency impacts.

Reduction in residential fire risks

The focus on safety impacts was on the risk and consequence of residential fires resulting from faulty electrical wiring, overloading of electrical circuits, tampering with electrical usage monitoring and other electrical system malfunction arising from indoor marihuana cultivation. The analysis assumed that under the MMPR, the risks of property damage, personal injury or death resulting from marihuana production-related fires will be significantly reduced but not completely eliminated. The social cost of adverse safety events related to the production of marihuana for medical purposes was estimated to be reduced, over the period from 2014 to 2024, by about 40% under the MMPR, at a total present value of $64.32 million. This represents annualized savings (avoided costs of property damage, injury and death from residential fires) of approximately $9.58 million per year for 10 years.

Reduction in risk of break-ins / home invasions

The focus of the security impacts was on the risk and consequences of home invasion, violence targeting residential production involved in misuse, and criminal activity related to marihuana distribution on the illegal market. Information from Canadian law enforcement authorities on misuse of production licences, home invasions and shootings was used as the basis to estimate the risk of violence. Overall, the analysis valued the projected reduction in the risks of break-ins / home invasions due to the MMPR at $0.38 million in 2014, rising to $26.48 million in 2024. The present value of security cost savings under the MMPR was estimated at approximately $89.03 million over the policy impact period, with an average annualized value of $13.27 million. The MMPR will have lower security costs (over 40% lower than under the status quo) due to the reduction in misuse activity that results from the expectation that eliminating personal and designated production in favour of a commercial licensing scheme will deter individuals interested in exploiting the Program.

Program administration cost savings

Government administration costs of the Program have increased significantly as the number of Program participants has grown. In the absence of regulatory changes, the analysis assumed a continuation of the growth in Program applications and corresponding substantial increases in the cost to Health Canada to authorize legal possession and license production of marihuana for medical purposes. The CBA estimated that the administration cost of the Program would have increased from $20.63 million in 2014 to over $120 million in 2024, in the absence of any changes. These costs include salary, employee benefits and accommodation costs associated with dedicated staff, operations and maintenance costs, training, supplies and other corporate overhead costs.

Under the MMPR, Health Canada will eliminate the role it plays in determining the eligibility of persons to access a legal supply of marihuana for medical purposes and return to its traditional role as a regulator of industry. This will result in significant administrative cost savings over the policy impact period. Under the scenario assumed for the new regulated market, the regulatory proposal was estimated to lead to more than a 90% reduction in Health Canada’s administrative expenditures. The present value of administration cost savings over 10 years was estimated at $478 million. On average, the MMPR are expected to generate annualized administrative cost savings of approximately $71.24 million per year over this period. (This estimate does not include potential savings in contract supply costs or subsidies.)

Producer surplus gains (see footnote 7)

The MMPR will establish a regulated commercial market for the production and sale of marihuana for medical purposes. Private industry participation in the regime is expected to yield benefits to society. Under the status quo, marihuana is either produced through private arrangements or at a cost to the taxpayer. There were no benefits to society at large beyond the benefits to the individuals involved. Under the MMPR, there will be beneficial impacts for the industry, over and above the benefits to the individuals involved in the market. The analysis measured this change in welfare by estimating a change in producer surplus gains under the policy. No producer surplus is derived in the status quo. The CBA found that the new regulated market will generate an overall producer surplus of $2.64 million in the first year of implementation (2014–15), rising to about $110 million in 2024 as the market expands. The present value of producer surplus gains over the policy horizon (2014–24) was estimated at $339.85 million or about $50.65 million (annualized average) per year for 10 years.

Reduction in deadweight loss (see footnote 8)

The CBA also estimated the deadweight loss under the marihuana access regime from the effective subsidy to supply that resulted in excess demand relative to what a market equilibrium quantity will be. The value of this economic efficiency loss was relatively small as the Government supply component in the CBA model was comparatively small. The analysis assumes the imposition and payment of the regular consumption tax (HST) by consumers of marihuana under the framework. Both the presence of an effective subsidy in the Government supply market for the status quo and the assumed, potential imposition of tax on purchases in the commercial market were projected to cause welfare losses to society by distorting market signals and causing sub-optimal allocation of scarce resources.

The economic efficiency loss under the status quo was estimated to be reduced by about $1.51 million during the first year of implementation (2014) of the MMPR, rising to about $7.70 million in 2024. This represents an average annualized reduction of about $5.03 million or a total present value of approximately $33.74 million over 10 years. Overall, the reduction in deadweight loss is small and not a significant benefit of the regulatory change.

In total, the present value of benefits of the MMPR was estimated to be $1.005 billion from 2014 to 2024. On average, this represents an annualized savings of approximately $149.77 million each year for 10 years.

Costs

The CBA projected the negative impacts of the MMPR on social welfare on the basis of a change in the welfare of the individuals most directly affected by the regulatory change. Because the available scientific evidence does not conclusively support the use of dried marihuana for therapeutic purposes, the causal relationships between the use of the substance and purported medical benefits are inconclusive. Thus, the analysis measures the change in individual welfare under the policy directly by estimating the change in users’ consumer surplus. Economic theory does not require the existence of scientifically proven medical benefit in order to measure the welfare implications of a public policy change. The observation that some in society are willing to pay to obtain marihuana for medical reasons was deemed as a sufficient basis for measuring a change in consumer welfare.

Loss of consumer surplus (see footnote 9)

Consumer surplus was estimated as the area under the demand curve and above the price consumers will potentially pay for marihuana under the MMPR. Under the MMPR, the analysis projected a reduction in the number of legal marihuana users vis-à-vis the status quo, and a reduction in the quantity consumed due to a potential increase in the price of marihuana in the regulated market. Under this scenario, the CBA predicted a significant loss of consumer surplus from this policy change. The analysis assumes a price change from about $7.60 per gram to about $8.80 per gram over the 10-year period. This assumption reflects the potentially higher cost of producing marihuana in the new commercial market, compared to personal or designated production under the MMAR. The higher price also reflects the potentially higher product quality due to quality control measures to limit contaminants and toxic substances and to ensure a product of consistent quality over time. The analysis assumes that this projected price change will lead to a decrease in the relative number of legal users by about 30% over the next 10 years compared to the status quo. The total quantity of marihuana consumed was also estimated to decrease. On average, the loss in consumer surplus (representing the total social costs of the MMPR) was estimated to be about –$166 million per year. The present value over 10 years was estimated to be about $1.115 billion. (The study did not estimate consumer surplus for any consumption derived from illicit supply sources.)

Business compliance costs

Business compliance costs were estimated as 10% of overall supply cost. Based on this, the CBA estimated that business compliance costs will be about double under the MMPR. As business compliance costs are already included in the supply cost estimate for both the status quo and policy cases, they were not independently estimated again in the analysis.

Net benefits

The scenario representing the most likely outcome of the cost-benefit model was the focus of the quantified results for estimating the present value of the net benefits of the regulatory proposal. The estimated net present value (NPV) was –$109.7 million, with an average annualized value of –$16.35 million. This represents an overall net loss to society due solely to a reduction in consumer surplus.

This loss in consumer surplus results from reduced relative growth in consumption and a higher supply price due mostly to the shift from cheaper home production to a commercial market with appropriate regulatory controls and oversight.

A full assessment of the sensitivity of the NPV to all key variables was undertaken using Monte Carlo probabilistic methods. The results showed that there was substantial variability in the estimate (range: –$26 billion to +$10 billion; mean: –$1,688 million).

The status quo scenario was modelled on the assumption that Government resources required to administer the MMAP would continue to grow over time to fully accommodate the required Program uptake in terms of numbers of persons wanting to access a legal source of marihuana for medical purposes. The Program administration cost was projected to increase from $13.8 million (FY 2013–14) to over $120 million (FY 2023–24). In reality, it is highly unlikely that such additional resources would be available to accommodate the forecast increase in Program participation in an era of fiscal restraint.

This qualification is useful when interpreting the overall results. The impact of a resource constraint was analyzed using a simulation model. The simulation results indicated that the number of authorizations to possess in a constrained status quo scenario might be only one-third of the unconstrained case (i.e. perhaps only 150 000 authorizations to possess could be accommodated in the Program over the forecast period in practice, compared with the assumed unconstrained growth of up to 450 000 users).

Non-quantified benefits

Not all significant impacts of the MMPR were included in the quantitative results presented above. A few of these potential impacts were not quantified due to insufficient data on which to base estimates. Others were felt to be smaller in magnitude than the costs and benefits which were estimated. Nonetheless, some were considered to be substantial over the longer term but were excluded from the quantitative analysis because they were considered highly contingent on a number of economic, social and regulatory factors and will likely start to be measurable only near the end of, or after, the 10-year projection period assumed for the quantified CBA.

These impacts were assessed qualitatively. Major attention was given to (i) additional safety and security issues, impacts and possible benefits; (ii) reductions in information, administration and other transactions costs for users, the medical community and other stakeholders; (iii) the possible longer-term benefits from the full establishment of a large, competitive and innovative legal industry for marihuana users, the economy and Canadian society; and (iv) the longer-term possibility that a fully functioning and reasonably competitive, efficient and innovative market will promote increased uptake by individuals who obtain marihuana through the illicit market.

The results of the qualitative analysis showed potentially highly beneficial effects. The results of the qualitative assessment are included in the full CBA report, which is available upon request.

Cost-benefit statement
 

Year 1 (2014)

Year 5 (2019)

Year 10 (2024)

Present Value

Annualized Average

A. Quantified impacts (million CAN$, 2012)

Benefits

            

Canadians

Reduction in risk of residential fire

$1.16

$7.19

$19.26

$64.32

$9.58

Reduction in risk of home invasion

$0.38

$16.79

$26.48

$89.03

$13.27

Industry (see footnote 10)

Producer surplus gain

$2.64

$44.33

$110.03

$339.85

$50.65

Government

Program administration costs savings

$18.70

$70.66

$117.50

$478.01

$71.24

Reduction in deadweight loss

$1.51

$5.55

$7.70

$33.74

$5.03

Total benefits

  

$24.40

$144.52

$281.00

$1,004.94

$149.77

Costs

            

Consumers

Loss of consumer surplus (years 3–10)

$11.21

–$135.39

–$410.37

–$1,114.66

–$166.12

Net present value (NPV at 8%)

        

–$109.72

–$16.35

B. Quantified impacts in non-$ — e.g. from a risk assessment

Positive impacts

            

Canadians

Residential production licences avoided

38 481

178 451

289 065

    

Industry (see footnote 11)

New businesses established

51

61

61

    

Negative impacts

            

Consumers

Consumers projected to pay potentially higher prices for marihuana

41 384

189 486

308 755

    

Relative reduction in legal consumers

–16 415

–78 283

–124 933

    

Relative reduction in legal quantities consumed

–40 838 kg

–203 098 kg

–357 221 kg

    

C. Qualitative impacts

Consumers

Participants in MMAP: Reduced risk of illness due to mould caused by improper growing methods. Continued access to marihuana for medical purposes. Better-quality product, on average. Treatment is driven by relationship with authorized health care practitioners instead of Health Canada.

Non-participants in MMAP: Potential availability of more data on impact of use of marihuana for medical purposes due to possible licensed producers (LP) R&D investments.

Government: Reduced criminal activity in residential areas due to banning of legal marihuana production. Property taxes / local jobs for areas with LPs in their jurisdiction.

Note: Policy impact period from 2014 to 2024, assumed social discount rate of 8%.

Revisions to the CBA following prepublication

The revised Regulations include changes and clarification of wording related to specific requirements including security. These changes were considered to have an impact on the cost of compliance for licensed producers. In the CBA, however, business compliance cost was included as a component of the supply cost of marihuana produced by licensed producers and did not independently enter into the analysis. To determine whether, a revision of the CBA results was necessary as a result of the revisions to the Regulations, the effect of the changes in requirements on business compliance cost was first assessed. The results showed that the impact of the revisions to the Regulations on business compliance costs was insignificant and would not affect the magnitude of the estimates or the conclusions made in the CBA.

Impacts on economy, businesses and consumers

Government, and ultimately, the Canadian taxpayer, are the main beneficiaries of regulatory change through the reduction in Program administration costs. Business, especially medium-sized business, is also a beneficiary in terms of producer surplus benefits and the expansion of the legal marihuana supply industry that could grow to more than $1.3 billion per year in annual sales by the end of the forecast period. It is important to note that producer surplus is not related to profitability and should not be taken as an indicator of profitability.

Users of a legal source of marihuana for medical purposes are the stakeholder group that is impacted in terms of the reduced consumer surplus. The general public, in contrast, benefits slightly in terms of reduced deadweight loss and the reduced safety costs which will be borne through residential insurance.

The principal impact on the economy will be the replacement of the MMAR regime — a combination of personal production by private citizens and a heavily subsidized Government supply option — by a commercial industry. This will significantly reduce the burden on the Government of Canada and Canadian taxpayers. By 2024, rather than attempting to regulate potentially up to 450 000 individuals, Health Canada will likely be dealing with a significantly smaller number of licensed businesses.

Much of the societal risk and burden created by the MMAR are created from the indirect impacts of allowing individuals to produce marihuana at home. By shifting the production of marihuana for medical purposes from seldom-inspected private homes to more rigorously regulated, secure licensed producers, these impacts will be significantly reduced or altogether eliminated.

Additionally, there is a significant impact on “enforcement clarity” for law enforcement. Since producing marihuana for medical purposes in private dwellings is legal under the existing regime, police have sometimes expressed difficulty investigating suspected illicit production sites operating under the cover of a licence. Under the MMPR, all home production of marihuana will be illegal and only licensed producers will be authorized for legal production.

Health Canada anticipates that the social ills caused by home production of marihuana for medical purposes would have increased if the Program had continued. Due to the rapid historical growth of the Program, the adverse consequences would only have compounded over time. The Program participant base under the MMAR has been difficult to monitor and regulate effectively, and exponential growth would have made it more so. The MMPR are designed to minimize the detrimental impacts of the MMAR.

Moreover, with commercial entities cultivating marihuana for medical purposes, it is reasonable to expect that resources will be invested in improving the quality of the product and in researching the effects of marihuana. This could result in a growing body of scientific information that could advance society’s knowledge about uses of the plant.

Impacts by region

Several regions will have negative overall impacts because they have a high concentration of Program usage; thus, they have disproportionate shares of consumer surplus reduction. These regions are British Columbia and the Atlantic (primarily Nova Scotia). Other regions will have positive overall impacts. Savings from lower administrative costs will positively impact Ontario, because the Program is largely administered from Ontario. It will also positively impact the Prairie region because that is where government-contracted marihuana production occurs.

“One-for-One” Rule

While the MMPR could impose administrative burden costs on business, they are exempted from the “One-for-One” Rule because they are addressing unique and exceptional circumstances. Canadian courts have found that individuals who have demonstrated a medical need for marihuana have a right under the Charter to reasonable access to a legal source of marihuana for medical purposes. Therefore, the Government must establish a legal framework which provides access to this controlled substance.

According to the United Nations World Drug Report, marihuana is the most trafficked illicit drug in North America. The Royal Canadian Mounted Police (RCMP) estimate that the illegal marihuana market in Canada alone represents a multi-billion dollar per year industry. Because marihuana is a highly divertible controlled substance, and given that all controlled substances must be tracked and reported internationally, some administrative burden is justified. Security measures therefore account for a large portion of the administrative burden on industry in the MMPR. These measures are included to address the risks to public health, safety and security that are associated with marihuana production.

Additionally, as there is no licit Canadian industry for the production of marihuana for medical purposes, the MMPR set out a scheme in which interested individuals or corporations could elect to participate in or not — it will not place an administrative burden on any existing business activities.

Consultation

Consultation prior to publication of the proposed Regulations in the Canada Gazette, Part I, on December 15, 2012 (prepublication)

Following the announcement of the changes to the Program by the Minister of Health on June 17, 2011 (the original proposal), a consultation document was posted on the Health Canada Web site and a 45-day public consultation was launched. Health Canada also organized targeted stakeholder consultations between August and November 2011 to gather comments on the proposed improvements to the Program. In addition, Health Canada notified the United States Drug Enforcement Administration and the International Narcotics Control Board that a new program was under consideration in which individuals would no longer be licensed to produce their own marihuana and supply would come from licensed producers.

A detailed summary of these consultations was published in June 2012. Most stakeholder groups welcomed Health Canada’s efforts to create a regulated industry. In particular, law enforcement, municipal governments and fire officials were supportive of the plans to eliminate personal and designated production in dwellings and to establish a commercial market. A large number of entities expressed an interest in becoming licensed to produce under the regulatory framework. Program participants, however, indicated that they did not want to give up the ability to produce their own marihuana, and expressed concerns that they would face higher costs for marihuana for medical purposes in the future. The medical community voiced its continued concerns with the lack of scientific evidence regarding the use of marihuana for medical purposes.

The full consultation report can be found on the Health Canada Web site at www.hc-sc.gc.ca/dhp-mps/consultation/marihuana/_2011/program/consult_reform-eng.php.

Comments received during the 75-day comment period following prepublication

Health Canada received a total of 1 663 comments during the 75-day comment period following prepublication. Of these, 1 433 comments were submitted by current licence holders and individuals; 93 were from the prospective industry; 54 were from municipalities, fire officials and law enforcement agencies; 43 were from health care practitioners, medical associations and pharmacists; 6 were from provinces and territories; 3 were from members of Parliament; and 31 were from other organizations. In addition, the Department also received 212 comments sent automatically from a public petitions Web site. These comments were pooled together and counted as one individual comment.

Program participants and individual Canadians

Issue: Elimination of personal production will adversely affect Program participants and individuals

Current program participants and individuals expressed concerns over the elimination of personal production and the impact it would have on an individual’s ability to purchase marihuana from licensed producers. Some suggested that Health Canada should consider “grandfathering” current personal production licences to ensure that these individuals could continue to afford their supply of dried marihuana.

Department of Health response

One of the objectives of the MMPR is to treat marihuana as much as possible like other narcotics used for medical purposes. Over the years, licensed production of marihuana in private dwellings has been associated with increased risks to public health and the safety of communities in which such growing operations take place. The MMAR were never intended to support the exponential growth in the number of participants that has taken place since 2001. In 2002, 477 individuals were authorized to possess marihuana for medical purposes. As of April 16, 2013, program participation had grown to 29 888 individuals. This rapid growth in program participation has placed a significant strain on the Department’s resources to supply, authorize possession, licence personal production and to monitor numerous production sites. The elimination of personal production under the MMPR is in response to concerns raised by many stakeholders including police, fire officials and municipalities regarding the public health, safety and security risks such growing poses to individual Canadians, first responders and communities at large. During prepublication, Health Canada also received a number of comments from individuals which were supportive of the elimination of personal production. Many of those who were in favour of the planned phase-out cited concerns such as the presence of strong odours, the increased risk of theft and a general sense of insecurity in affected residential neighbourhoods, and the lack of enforcement to ensure risks of diversion to the “street” was minimized. The MMPR address these risks by replacing licensed personal production with a new regulated system of commercial production that will be inspected and monitored to minimize these risks.

Health care practitioners, medical associations and pharmacists

Issue: There is a lack of scientific evidence regarding dosage, safety and efficacy of marihuana for medical purposes

Health care practitioners (physicians and nurse practitioners), pharmacists and their respective professional associations expressed concern about the absence of scientific evidence regarding issues such as dosage, safety and efficacy of dried marihuana for therapeutic purposes. They were of the opinion that Health Canada, under the MMPR, is setting up a prescription-like process for dried marihuana, even though it (dried marihuana) lacks the research and information about its uses that health care practitioners are accustomed to for all other prescribed medications that have been issued a Drug Identification Number (DIN) or Notice of Compliance (NOC). Physicians in particular noted that this could affect their ability to make informed decisions in the interest of their patients and increase their liability risks. It was suggested that Health Canada establish standardized and mandatory education or licensure for practitioners who support the use of dried marihuana to partly mitigate these risks.

Department of Health response

Although clinicians have had at their disposal the ability to prescribe cannabinoid-based medicines that have gone through the standard drug approval process and that have been issued DINs, the courts have said there must be reasonable access to a legal source of marihuana for medical purposes, even though marihuana has not gone through the standard FDA/FDR process. Since marihuana is not an approved therapeutic substance in Canada, no formal, comprehensive, scientific and medical information (e.g. formal drug monograph) on the risks and benefits of marihuana for therapeutic purposes has ever been published by any commercial sponsor. Health Canada has established an expert advisory committee (EAC) to provide advice and recommendations to Health Canada on the current information on marihuana for medical purposes, and any additional information/education materials that might be of assistance so that physicians can be better informed of the current science on marihuana. The EAC has assisted Health Canada in its efforts to revise an information document, similar to a formal drug monograph, containing comprehensive and up-to-date information on the potential risks and benefits associated with the use of marihuana for medical purposes. This revised information document will be made available to health care practitioners who may wish to receive such information to guide them in discussions with their patients. The Department considered the suggestion for mandatory education and decided not to impose additional requirements. Health care practitioner licensing and accreditation of continuing medical education are administered by provincial licensing bodies. A mandatory education requirement would create a barrier for practitioners who may be willing to support their patients’ use of dried marihuana and would not be consistent with the objective of reducing administrative burden or of maintaining access to marihuana for medical purposes for patients under the MMPR.

Issue: Sale of dried marihuana by health care practitioners would create a potential conflict of interest

Regulatory colleges expressed concern that the dispensing of dried marihuana by physicians/nurse practitioners enabled by the MMPR would place them in a potential conflict of interest situation by authorizing them to dispense a drug they may also “prescribe.” It was pointed out that physicians, for example, are required by their code of ethics to dispense medications only in situations where it can be demonstrated that dispensing of medication cannot be done by a third party, such as a pharmacist. Others in this stakeholder group noted that authority to “sell or provide” dried marihuana may also put the practitioner at risk and make his or her facility a target for increased crime.

Department of Health response

The Regulations have been revised to remove the authority for a health care practitioner to “sell or provide” dried marihuana to a patient. This has been replaced with the authority for the practitioner to “transfer” (that is, “provide dried marihuana without consideration”) to a registered client of a licensed producer who designates the practitioner’s office as their shipping address. The provision to “transfer” does not permit an authorized health care practitioner to provide dried marihuana in exchange for something of value from an individual. The revised provision allows the authorized health care practitioner to continue to support access as required while removing the potential incentive to prescribe higher doses had “providing with consideration” been retained.

Municipalities, law enforcement and fire officials

Municipalities, law enforcement agencies and fire officials from across Canada, including associations such as the Federation of Canadian Municipalities, the Canadian Association of the Chiefs of Police and the Canadian Association of Fire Chiefs, submitted comments during prepublication. These groups were very supportive in their feedback of the overall framework, viewing the elimination of personal production as a means to significantly reduce public health, safety and security risks in their communities. In the absence of pharmacy distribution (their preferred method of distribution), the move to commercial licensed production was well received. These groups of stakeholders were, however, concerned that the proposed Regulations did not go far enough with respect to the obligations placed on licensed producers and former personal production licence holders to ensure the safety and security of Canadians.

Issue: Licensed producers must be required to demonstrate compliance with applicable local laws as a condition for licensing

Municipalities raised the issue that, under the proposed Regulations, applicants were not required by law to demonstrate to Health Canada that they were in compliance with all applicable local zoning, fire, health, safety, building or other by-law prior to being granted a licence to produce marihuana. They requested that the MMPR be amended to require that they be notified when a producer licence is granted, modified, revoked or suspended.

Department of Health response

In response to similar concerns raised by municipalities during preliminary consultations, the MMPR require potential applicants for a licence to notify local government, police and fire officials in writing of their intention to apply for a producer’s licence and to submit proof in their application that this requirement has been complied with. The notice must specify the activities for which the licence will be sought, and the address of the site at which activities will be conducted. A provision has been made in the revised Regulations to require a licensed producer to also notify these same authorities when the licence is granted, when an amendment to the licence is approved by the Minister, when the licence is suspended or revoked for any reason, or when the licence is reinstated. Further, the revised Regulations enable the Minister of Health to confirm licence information to the authorities originally notified by an applicant when the Minister receives such a request.

Issue: The MMPR must require the remediation of dwellings used for production under the MMAR

In their comments, fire officials and municipalities highlighted their concern that the proposed MMPR fail to address the issue of remediating buildings that may have been damaged as a result of their use for licensed marihuana production under the MMAR. These stakeholders further indicated in their comments that they would like Health Canada to disclose the addresses of such sites and accept responsibility for the remediation of affected buildings.

Department of Health response

The federal government does not have jurisdiction over land use patterns, local zoning laws or the issuing of building or construction permits in municipalities across Canada. Health Canada understands the issue of remediation to be a matter for local government which is best handled, as appropriate, by the local authorities most familiar with the issue. In addition, there are privacy concerns with broad disclosure of all addresses of individuals who were authorized to produce marihuana for medical purposes under the MMAR.

Provinces and territories (P/T)

Six provinces, including British Columbia (BC), Alberta, Manitoba, Ontario, Quebec (QC) and Nova Scotia (NS), and three elected officials, including two members of Parliament, submitted comments during the 75-day comment period. Overall sentiments were similar to those expressed during preliminary consultations held in 2011. Consistently, provinces raised concerns about the role of health care practitioners and pharmacists under the proposed MMPR. Provinces emphasized a need for more education and guidelines for physicians and/or other health care professionals in order to be able to make informed recommendations for their patients. Dosage was highlighted as a key concern in that area. Concerns included lack of research and lack of an evidence base on which marihuana is recommended as a medical therapy, especially given the health implications of using a smoked form of marihuana for medical purposes. Three of the six provinces, BC, NS and QC, raised concerns with the ability of health care practitioners to sell and provide marihuana for medical purposes. They expressed concerns that it is a conflict of interest for health care practitioners to both support a patient’s access and sell marihuana directly to their patients. These comments were similar to concerns raised directly by health care practitioners and the Department’s response has been provided earlier in the RIAS under the issues raised by “Health care practitioners, medical associations and pharmacists.” In addition, provinces and territories also expressed concern with the implications of a higher cost of dried marihuana to patients under the proposed MMPR.

Issue: Cost of dried marihuana under the MMPR will impact provinces and territories

Provinces and territories noted that a potentially higher price for dried marihuana under the proposed MMPR would put pressure on provinces and territories to subsidize the costs incurred by patients. They also noted that, without a common drug review and a drug identification number, marihuana for medical purposes is not likely to be dispensed by pharmacists nor covered under provincial drug plans.

Department of Health response

The MMPR will treat dried marihuana as much as possible like other narcotics used for medical purposes by creating conditions for a new, commercial industry that will produce and distribute dried marihuana. This new system will introduce a secure and efficient system that provides access to marihuana for those who suffer from illness or disease, while saving taxpayers’ money and reducing risks that are felt by Canadian communities. It is unknown at this time what the cost of marihuana for medical purposes will be under the new system as licensed producers will be responsible for setting the price. The Regulations introduce conditions for a competitive industry and it is possible that prices will fall over time in response to competition and technological innovation that could reduce cost of production.

Prospective industry

Issue: The price of dried marihuana under the MMPR may be unaffordable

Comments were received from a variety of parties interested in becoming a licensed producer under the proposed MMPR, including compassion clubs. The majority of comments received expressed concern over consumer cost for dried marihuana. Based on the price projected in Health Canada’s cost-benefit analysis for the Regulations (which estimated that an LP producing 500 kg of dried marihuana per year could set a price of $7.60/gram and maintain a profitable operation), many potential LPs felt that registered clients, especially those in the low income category due to a disability, would not be able to afford the quantities they need or are accustomed to. This was seen as a significant risk to the viability of the commercial market considering the size of the investment that the group believes will be necessary to enter the market. It was suggested that Health Canada work with P/Ts to explore the possibility of insurance coverage or consider some alternative forms of subsidy for individuals who may be unable to afford the price in the regulated market.

Department of Health response

The MMPR will treat dried marihuana as much as possible like other narcotics used for medical purposes by creating conditions for a new, commercial industry that will produce and distribute dried marihuana. This new system will introduce a secure and efficient system that provides access to marihuana for those who suffer from illness or disease, while saving taxpayers’ money and reducing risks that are felt by Canadian communities. Since 2001, the cost of the Program (issuing authorization/licences and subsidizing supply of dried marihuana) under the MMAR has consistently been rising as program participation has continued to experience exponential growth. With this growth projected to continue, the system of providing access to marihuana for medical purposes through a government supply contract or by issuing licences for personal production (i.e. PUPL/DPPL) is unsustainable. It is unknown at this time what the cost of marihuana for medical purposes will be under the new system as licensed producers will be responsible for setting the price in a manner similar to how prices for other narcotics used for medical purposes are set by their manufacturers. The Regulations introduce conditions for a competitive industry and it is possible that prices will fall over time in response to factors such as competition and changing technology. Health Canada has made available all relevant information and will continue to work with potential licence producers to help them make an informed decision on whether or not to enter the regulated market but the decision to do so will be a private business decision.

Issue: Marihuana-infused products should be allowed under the MMPR

Some potential licence producers expressed their dissatisfaction with the fact that under the proposed MMPR, marihuana will be available in dried form only and criticized the lack of product alternatives as a limitation on client choice. Some felt that the restriction to dried marihuana deprived registered clients and patients of access to marihuana in forms that may be preferred in terms of desired effects, routes of administration (e.g. ingestion or topical) and “dosage.” They noted that some users of marihuana for medical purposes may prefer marihuana-based products that are ingested or applied topically to those used primarily via inhalation, given the known dangers of smoking.

Department of Health response

The new Regulations will limit licensed producers to the production and distribution of dried marihuana only. The MMPR will not authorize extractions of active ingredients (e.g. resin) to be sold for the therapeutic purposes. The only clinical studies on the therapeutic uses of marihuana that have been carried out to date have only used dried marihuana that was either smoked or vaporized. There are no clinical studies on the use of cannabis edible (e.g. cookies, baked goods) or topical products for therapeutic purposes. As with other drugs, all products that claim to have a health benefit must first go through the drug approval process as outlined in the Food and Drug Regulations (FDR). The limited clinical data that exists is restricted to dried marihuana that was either smoked or vaporized and to cannabinoid-based medicines (dronabinol, nabilone, and nabiximols) that have gone through the appropriate drug approval channels. Under the MMPR, licensed producers will be required to include information leaflets prepared by Health Canada which warn consumers of the adverse effects of using marihuana. There are no restrictions on how dried marihuana is to be ingested or inhaled, and patients may choose to use it, for example in foods or by vaporizing. HC does not limit or recommend a particular method of administration.

Issue: Distribution by mail only is not a reliable system of delivery

Many potential LPs raised concerns with the requirement to distribute dried marihuana to clients by mail only. They argued that this system is not well tested and may fail to provide timely access to dried marihuana for registered clients and may even pose security risks to courier companies and their personnel. Others noted that this limitation may provide incentive for some to try to work around the shipping requirement under the proposed MMPR by hiring a health care practitioner or pharmacist to dispense dried marihuana directly to clients on-site.

Department of Health response

Secured mail-only delivery by companies specializing in mail delivery has been used under the MMAR to provide access to dried marihuana for clients who obtain their supply from Health Canada. Under the Program, dried marihuana is shipped by courier or, in remote locations, by Canada Post, to the authorized person, unless the authorized person has arranged for their medical practitioner to receive the dried marihuana on their behalf. In the absence of a role for pharmacies, P/T ministries of public safety, law enforcement, municipalities and fire officials indicated a preference for this system of delivery over the establishment of storefront retail outlets. Secured mail-only delivery is seen by this stakeholder group and others as a safer alternative to direct storefront retail and a way to minimize the potential for diversion. Health Canada believes that secured mail delivery strikes an appropriate balance between individuals’ need for access and communities’ need for safety and security.

Health Canada considered carefully the suggestion that enabling pharmacist dispensing could potentially lead to circumventing the restriction to distributing dried marihuana only by secured mail. However, Health Canada is of the opinion that as an employee of an LP, a pharmacist will be held to the same regulatory requirements and have the same prohibitions (i.e. secure shipping only) on direct sale to registered clients as an LP without a pharmacist on staff. Therefore, direct hiring of a pharmacist by an LP does not enable a storefront distribution model. However, in response to the concerns raised by pharmacists and pharmacists’ associations as well as by provinces and territories (see comments by provinces and territories), the MMPR have been revised to remove the authority for pharmacists to dispense dried marihuana outside a hospital, as long as their activities were also authorized under P/T legislation.

Other groups

Other groups who submitted comments include a wide range of non-governmental organizations. A majority of comments received in this category were from compassion clubs and marihuana advocacy groups. Stakeholders generally supported the removal of Health Canada’s application process and the categories of symptoms and conditions. Concerns similar to those raised by other stakeholders were also expressed. In particular, this group indicated dissatisfaction with physicians’ reluctance to support access to marihuana for medical purposes, the elimination of personal production licences, including designated person production, and the absence of authority under the proposed MMPR allowing for the production of cannabis-infused products.

Rationale

In recent years, a wide range of stakeholders have voiced concerns about the MMAP. Concerns include the risk of diversion of marihuana, the complexity and timeliness of the application and authorization process, health, safety and security issues associated with the production of marihuana in homes and communities, and the lack of adequate scientific evidence for the medical use of marihuana. A new regulatory framework is required to address these and other issues by providing reasonable access to a legal source of marihuana for medical purposes while continuing to regulate marihuana as a controlled substance.

The MMPR will impose a significant compliance and administrative burden on businesses that may wish to enter the market. However, the requirements included in the MMPR are considered necessary to achieving the goal of reducing the potential for abuse and exploitation of the system and reducing the risks to public health, safety and security, while still maintaining reasonable access to a legal source of marihuana for medical purposes, as per the decisions of Canadian courts, for Canadians with medical need.

The MMPR will provide a more efficient way of accessing marihuana for medical purposes, particularly by affording individuals with a medical need increased choice in terms of authorized health care practitioners, marihuana strains, and suppliers. Eliminating licensed marihuana production in homes will eliminate public health, safety and security concerns relating to those licensed activities, as well as eliminate ambiguities for law enforcement. Finally, the elimination of Health Canada’s role in authorizing individual access to marihuana for medical purposes, and production and distribution of marihuana, will significantly reduce the cost of administering the Program.

Implementation, enforcement and service standards

Repeal of the MMAR

The MMPR include a number of consequential changes to the MMAR, as well as two transitional registration schemes that will allow for gradual transition to the new regulatory regime. Upon coming into force, the MMPR will allow the holder of an authorization to possess to obtain their supply of marihuana from a licensed producer by registering as a client with that producer. Similarly, an individual who had obtained a medical declaration from their medical practitioner under the MMAR could register as a client with a licensed producer instead of applying to Health Canada for an authorization to possess.

The MMAR will be repealed on March 31, 2014. At that point, all authorizations and licences issued under the MMAR will no longer be valid. However, individuals will be authorized to use their expired authorizations to possess to register as a client with a licensed producer for up to one year after their date of issue, unless a period of usage of less than 12 months has been indicated in the medical declaration.

New PUPL and DPPL will no longer be issued if the application is submitted after September 30, 2013. Similarly, existing PUPL and DPPL holders will not be able to apply to change the location of their production site on the licence as of the same date. This is to avoid situations where a person receives a PUPL or DPPL as their supply option, but will not be able to produce a crop before the repeal of the MMAR.

Compliance and enforcement

In general, compliance and enforcement activities will be subject to the broader Health Canada compliance and enforcement policy for controlled substances and precursors. Compliance verification will largely take the form of pre-licensing inspections, and inspections of licensed sites. Inspections will occur under existing legislative authorities. Compliance will be assessed against the MMPR, the FDA, the NCR, and, during transition, the MMAR, as well as any relevant directives and guidelines. Potential responses to non-compliance could include placing conditions on a licence, the full or partial suspension of a licence, the revocation of a licence or permit, and the refusal to issue, amend, or renew a licence, or prosecution under the CDSA or FDA.

Performance measurement and evaluation

Health Canada has developed a Performance Measurement and Evaluation Plan (PMEP) to measure the performance and conduct an evaluation of the MMPR. This plan specifies the methods selected for ongoing monitoring of the MMPR, performance targets, indicators and data sources. These will be comprehensively tracked as part of the performance measurement strategy outlined in the PMEP. This PMEP is available upon request.

Contact

Medical Marihuana Regulatory Reform
Controlled Substances and Tobacco Directorate
Healthy Environments and Consumer Safety Branch
Health Canada
Address Locator: AL0302A
Ottawa, Ontario
K1A 0K9
Fax: 613-941-7240
Email: consultations-marihuana@hc-sc.gc.ca