Pubdate: Mon, 02 Jun 2014
Source: National Post (Canada)
Copyright: 2014 Canwest Publishing Inc.
Contact: http://drugsense.org/url/wEtbT4yU
Website: http://www.nationalpost.com/
Details: http://www.mapinc.org/media/286
Author: Dean Beeby
Page: A8

APPLICATIONS TO GROW POT TURN TO TORRENT

OTTAWA - Health Canada is struggling to process a mountain of 
applications for licences to grow medical marijuana as the country 
experiences a "greenrush" of firms wanting to grab a piece of the coming boom.

The department had received 858 applications as of late last month, 
and new ones were coming in the door at an average of 25 a week.

The application frenzy has drawn basement growers, well-heeled 
entrepreneurs with pharmacy expertise and even struggling junior 
mining firms trying to find a lucrative new business line.

Health Canada radically changed the rules for medical marijuana on 
April 1, moving approved production from a cottage industry of 
thousands of loosely regulated growers to a commercially competitive 
sector, with an anticipated 50 larger companies shipping high-quality 
weed in dozens of strains.

Prices are being set by the free market, and Health Canada is 
imposing no limit on the number of sanctioned indoor weed farms, as 
long as they can pass regulatory muster.

Officials began accepting applications for grow licences a year ago, 
but the initial trickle of forms has turned into a torrent.

In September, Health Canada was sorting through 156 applications - 
but the number tripled by February this year and then doubled in just 
the next three months.

So far, only 13 licenced suppliers have made it to the finish line, 
listed on the department's website as authorized marijuana sources 
for patients who have their doctor's approval to use cannabis for 
pain and other symptoms.

Meanwhile, business newcomers say they're frustrated by the inability 
of Health Canada to process their applications in a timely way, as 
their leased grow-space gathers dust and their investors become impatient.

"They're really an unfortunate bureaucracy under siege," says Umar 
Syed, president of Toronto-based CannMart Inc., which has been 
patiently waiting for a distribution licence since October.

"They're dealing with a situation they weren't prepared for. ... 
there's something really out of whack."

Syed, with a background as a clinical pharmacist, has had previous 
positive dealings with Health Canada. But he says the underfunded 
agency is suddenly struggling with a "tsunami" of applications, 
leaving his company and others in limbo.

"We're all dressed up and nowhere to go."

Syed's comments echo those of other applicants, who declined to go on 
the record for fear of jeopardizing their chance at a licence.

"They keep moving the goal posts," one West Coast-based applicant 
said of Health Canada's evolving review process.

The new regime has also been hit with two curve balls: a British 
Columbia court injunction in March that allows medical users 
accredited under the old system to continue to use home-grown pot for 
now; and two recent recalls of medical marijuana from licenced 
companies producing under the new system, for reasons of quality.

A spokeswoman for Health Canada did not respond directly to questions 
about the department's ability to handle the massive influx of 
licence applications.

But Sara Lauer said of the 858 received as of May 20, 370 were 
returned as incomplete, 149 were refused and 30 withdrawn.

That still leaves 289 applications stacked in the department's inbox 
for review, which is time-consuming.

"Before a licence is issued ... producers must demonstrate how they 
meet extensive personnel security checks, physical security 
requirements, record-keeping equipment, and quality control 
requirement," Lauer said.

"The review process includes a file review followed by site 
inspections. The licensing process is rigorous, considering the 
quality standards required and the risk of diversion of cannabis to 
the illicit market."

The potential market is huge. Health Canada estimates medical 
marijuana sales will hit $1.3 billion annually by 2024, with some 
450,000 registered users.

Under the old rules, more than 30,000 patients were authorized to 
possess medical marijuana. An estimated 500,000 Canadians currently 
use cannabis for medical purposes - acquired from all sources, 
official and illicit - based on survey projections from 2012.

Lauer says 5,120 patients have signed on with licenced producers 
under the new system, and there is sufficient supply to meet 
anticipated demand.

Even so, Health Canada has stockpiled some 500 kilograms of dried 
marijuana from its original supplier, Prairie Plant Systems, and has 
imported another 100 kilograms from The Netherlands. The department 
has also held discussions with Israel about possible imports.

About 60 strains of commercial marijuana are currently on offer from 
sanctioned suppliers, most priced at between $8 and $12 a gram. 
Medical users typically consume between one and three grams daily.
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MAP posted-by: Jay Bergstrom