Canada Sees Scramble For Marijuana Licence: Health Canada Goes Slow With Just Two Approvals So Far

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By Kalyan Kumar | September 3, 2014 6:13 PM EST

Canada's Health Ministry is facing a huge rush of institutional applicants seeking the lucrative medical marijuana licence. The number of applicants has crossed 1,000 in what is being described as the "green rush."

Reuters
A volunteer displays jars of dried cannabis buds at the La Brea Collective medical marijuana dispensary in Los Angeles, California, March 18, 2014.

So far, only two new licences have been approved. It is a slow process and the department is tightening the application rules. Many nervous investors are awaiting decisions on their multimillion-dollar bids, reported Cbc.Ca News.

The number of formal licence applications to grow the medical weed received at Health Canada as of Aug 25 was 1,009. The call for proposals came out in 2013. Right now, around 300 valid applications are under scrutiny.

New Marijuana Regime

The rules for medical marijuana changed on April 1, 2014 and ended home-grown weed production in favour of a regime for commercial products under a licensing system. The new regime seeks to create a private industry worth $1.3 billion in sales per annum with half a million customers.

Many applicants are aiming to position themselves in the medical marijuana market when recreational cannabis too becomes legal. As of August, 9,448 clients have registered under a new system to order medical marijuana from the newly licensed commercial producers.

Two Licences

Health Canada has been tightening the norms for prospective producers and increased the benchmark on security requirements to ensure that inventories of medical marijuana are stored in secure facilities. A spokesman of the department denied the argument that the new restrictive rules had affected the approval process. Its spokesman, Gary Scott Holub, said the security requirements had no impact on the processing of active applications. Some applicants assume that the move is aimed at discouraging small players from applying.

Those firms, not yet approved for licence, are under pressure from their investors who have already leased buildings, hired staff and paid legal fees. They are disturbed as they see no returns in sight.

Legalisation of recreational marijuana

The politics of marijuana is becoming a hot potato. Liberal Leader Justin Trudeau wanted it to be legalised, while the Conservatives have opposed the move, saying it would misguide the youth.

The government is also studying the proposal whether police should issue tickets for keeping marijuana.  Justice Minister Peter MacKay said such a step would help in unclogging the courts with criminal cases.

No Ceiling on License

So far, Health Canada has not set any limits on the number of licensed marijuana producers. An estimated 500,000 Canadians are believed to be using marijuana for medical purposes. But the concern is that majority of them do not obtain it through Health Canada-approved suppliers.

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(Photo: Reuters / Lucy Nicholson)
A volunteer displays jars of dried cannabis buds at the La Brea Collective medical marijuana dispensary in Los Angeles, California, March 18, 2014.
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