Shifting Legal Frameworks Straining Canada’s MMJ Producers


Under the Marijuana for Medical Purposes Regulations (MMPR), first introduced in 2013, over 1,400 companies in Canada have applied to become licensed producers. The rules aimed to centralize production in only a few dozen secured factories, while the older rules permitted patients to grow their own for consumption. A court ruling from this past February, however – one which argues that patients do indeed have the right to grow their own marijuana – has called the entire legal framework into question.

Currently, only 26 companies nationwide are licensed producers, seven of which are in British Columbia. While the introduction of the MMPR system inspired a “dumb money gold rush,” according to marijuana stock analyst Brayden Sutton, it has been a difficult few years for these companies as many have criticized Health Canada’s “inordinately slow” approval processes and “opaque” decision-making. There is also a problem of competition with dispensaries which may have both legal and illegal output, especially near the American border. “The average dispensary sells 500 pounds a month – that they admit to,” says Sutton. “Few MMPRs are even at that.”

Ongoing legal developments and changing frameworks have further hindered companies’ abilities to sustain themselves in the new market. The stock of Toronto-based PharmaCan Capital Corp. has dropped from $0.82 in 2014 to about $0.20 in 2016; in June 2015, Nanaimo-based Tilray eliminated nearly one-third of its staff of 187 and delayed a six-fold expansion of its factory; and the Victoria-based public MMPR company Emerald Health Therapeutics Inc. lost about $2.9 million in the first nine months of 2015.

Ottawa-based lawyer Trina Fraser of BrazeauSeller LLP, who has worked with MMPR applicants, believes the court ruling in February could put pressure on the Trudeau government, which has been optimistic but “tight-lipped” about reforming the medical marijuana industry and potentially decriminalizing the drug in the future.

Here are B.C.’s largest licensed medical marijuana producers:

  • THC Biomed Intl Ltd. – $10.99 million
  • PharmaCan Capital Corp. – $10.78 million (PharmaCan’s licensed producer, In the Zone Produce Ltd., is based in B.C.’s Okanagan Valley)
  • Vodis Pharmaceuticals Inc. – $8.7 million
  • Emerald Health Therapeutics Corp. – $8.09 million