After a decade-long battle, Health Canada has announced its intention to get out of the business of supplying medicinal marijuana to Canadians. On December 15, 2012, Health Canada published the proposed Marihuana for Medical Purposes Regulations (MMPR) in the Canada Gazette. The MMPR are intended to replace the current Marihuana Medical Access Regulations (MMAR) in the spring of 2013, and will dramatically change how medicinal marihuana is accessed and produced in Canada.

Introduced in 2001, the current MMAR were intended to comply with an Ontario Court of Appeal decision which held that the prohibition on the possession of marihuana violated the right to liberty and security of a person under the Canadian Charter of Rights and Freedoms. Under the current system, Canadians with a serious illness who are authorized to possess dried marihuana for their own personal medical use can obtain their marihuana either by producing their own supply, by designating an individual to produce it on their behalf, or by purchasing dried marihuana from Health Canada. However, many concerns about the current program have been expressed by various stakeholders. Production of marihuana in private dwellings has drawn the ire of police, has raised public health, safety and security issues, while growth in program participation has had unintended administrative consequences (such as delay in issuance of “personal use production licences”). Also, some participants have complained about the efficacy of the sole marihuana strain available through Health Canada’s official producer.

Under the proposed MMPR, supply and distribution of dried marihuana would rely on commercial production of marihuana for medical purposes. The MMPR would establish the conditions for a competitive industry of licensed producers which would offer individuals access to dried marihuana for medical purposes, produced under secure and sanitary conditions.  Security requirements would be in place for the production site and key personnel of the licensed producer and standards for packaging, transportation and record keeping would contribute to achieving security objectives.

In addition, the process for individuals to access marihuana for medical purposes would no longer require applying to Health Canada. Individuals would be able to obtain marihuana, of any strain commercially available, with information similar to a prescription from an authorized health care practitioner. New personal use production licences would not be issued, and all licences to produce would end on March 31, 2014.

The Regulatory Impact Analysis Statement (“RIAS”) forecasts that the expansion of the legal marihuana supply industry could grow to more than $1.3 billion per year in annual sales by the end of the forecast period (2024). Although the government’s cost-benefit analysis suggest that the government, and ultimately, the Canadian taxpayer, will benefit from this regulatory change through reductions in administration costs, the RIAS also suggests that the change will result in higher prices for medicinal marijuana users due mostly to the shift from cheaper home production to a more regulated commercial market. The estimated increase in price, from $1.80-$5.00/g to about $7.60/g in 2014, and rising to about $8.80/g, is expected to lead to a decrease in the relative number of legal users by about 30% over the 10-year projection period.

The proposed Regulations can be found at www.gazette.gc.ca/rp-pr/p1/2012/2012-12-15/html/reg4-eng.html.