Pubdate: Wed, 25 May 2016
Source: National Post (Canada)
Copyright: 2016 Canwest Publishing Inc.
Author: Peter Koven
Page: FP1


Has overcome 'skepticism'

Toronto MP Bill Blair offered a glowing endorsement of Canada's
licensed medical marijuana producers on Tuesday, an indication that
they are well positioned to serve the recreational market in the future.

Blair, the former Toronto police chief and current parliamentary
secretary to the minister of justice and attorney general, is the
federal government's point man on legalizing recreational pot use. He
said the licensed producers offer a very strong model to build upon as
Ottawa tries to build a functional market.

"I have come to believe it is possible=C2=85 for marijuana to be produced

in a way that maximizes safety for Canadians," he told the audience at
a marijuana regulation conference in Toronto.

Blair said he was "personally skeptical" that pot could be produced in
a healthy way until he visited the Bedrocan production facility in
Toronto, which is now owned by industry leader Canopy Growth Corp.

Blair was very impressed with the standards that were being upheld at
the facility and the degree to which it was following Health Canada's
stringent regulations.

"The regulations are really quite extraordinary," he said.

The federal government is putting together a task force to look at how
to legalize, regulate and restrict access to marijuana. The task force
is expected to report back with its findings by November, paving the
way for the federal government to unveil its legalization plans next

Blair said the task force will be consulting experts of all stripes
across the country, but noted that the business community will be
playing a "very significant role" in the process.

That is good news for the licensed producers. While they are excited
about the prospects of their tiny medical market turning into a
massive recreational market, the industry is currently clouded with
uncertainty. Illegal dispensaries are selling marijuana to legitimate
and illegitimate patients in full view of police, and a recent court
decision is forcing Health Canada to go back to the drawing board and
rewrite its pot regulations.

While it was always assumed the licensed producers would be playing a
leading role in serving the recreational market, Blair's endorsement
provides the industry with some confidence that their current business
model is one that can work in a legalization scenario.

Canada's medical marijuana industry came to life in April 2014, when
Ottawa introduced rules forcing medical marijuana patients to buy
their product from licensed producers.

Dozens of marijuana companies popped up on Canadian stock exchanges,
and they are now gradually getting whittled down to a much smaller
group of producers capable of generating profits.

There are currently just 65,000 to 70,000 patients signed up to the
medical marijuana program, meaning the industry is worth less than
$200 million a year. By contrast, Blair said the marijuana black
market in Canada is worth perhaps $7 billion to $10 billion a year.

The licensed producers may provide a solid model for how marijuana
should be produced, but Blair acknowledged that other aspects of
legalization are uncertain.
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