Medical Marijuana Delays Explained
September 19, 2014
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Health Canada has been “struggling” with issuing licences to marijuana producers since April, and many of our clients are concerned about these delays. Will they ever get approved? How long will they have to wait? I have some news and insight that will help.
First, nothing is as simple as it seems. And little background information is helpful here for those readers not familiar with the issue. The courts have ruled that Health Canada must make medical marijuana accessible to Canadians as of around a decade ago, and the first system (home grown goodness) became a security concern. Last year they came out with new Regulations requiring marijuana production/selling to be done only through commercial facilities through a pre-market licensing system. 13 companies were approved up until April or so, and then no new licences for production were being issued. Nothing since then, as of September 2014. Health Canada has received nearly 25 applications for production every week, and to date they have received around 1,000 applications. They have turned away 2/3 of these, as they did not meet their requirements. So of the 350 or so applications for production on their desk that are still “in queue”, there hasn’t been any movement.
Why it’s disturbing for industry is twofold. First, when you apply to become a producer, you really should have your facility location nailed down (owned or leased). These monthly payments get expensive. Also, many investors are weary to invest money into these start-up producers until they get a Letter of Intent (aka “comfort letter” or “pre-approval”) from Health Canada, which is issued shortly before the inspection date. Second, there are hundreds (if not thousands) of people and companies who want to start a business in marijuana production but are dismayed by the uncertainty of the process. Will they ever get approved? Will be take one or two years? Is it worth waiting? What if it just leads to rejection?
I have to give a lot of credit to Mr. Deepak Anand of the Canadian National Medical Marijuana Association (CNMMA), who has provided a tremendous amount of support and insight. Our company is an active member of the CNMMA, which is a non-profit association dedicated to support the growing medical marijuana communities in Canada. They are one of the very few stakeholder groups that Health Canada engages with on a regular basis, which means they are in a keystone position for understanding the regulatory challenges right now. If you’re not already a member and you are in the medical marijuana industry, you need to join – there are no fees as of now, and they are a great association to work with.
The problem of the backlog has to do with many different players behind the scene. RCMP is involved in the security clearances; the Justice Department is looking at current review policies as they relate to the recent court rulings and injunction; The Ministry of Public Safety is re-evaluating the public safety risks of producer locations; and Health Canada is at the drafting table again for its current guidance documents and policies for approving LP’s.
We know this from an experience standpoint. Health Canada is coming back to us with more requests of documentation than they did even 3 months ago. We had a hunch they were working on new guidance documents, and I am now told that they should be releasing these over the next few weeks. The Ministry of Public Safety is also providing guidance documents apparently, and which should be coming out shortly. Ultimately, Public Safety has to rule on a facility’s location in the community as to how it will affect the safety of the community at large. (I also believe this is where many applications are stuck.)
I am told that applications will start to be approved again in the next two months, once the industry has had a chance to comply with the new requirements that will be laid down shortly. It is greatly unclear to me what the new requirements will be, but my hunch is they will focus on site locations and quality assurance documentation. Once these are released, Health Canada will very likely begin to expedite application reviews. This does happen with Health Canada on a regular basis, and we have seen this especially with the Natural and Non-Prescription Health Products Directorate (NNHPD) – every few years they would get stuck in their backlog because they were in process of releasing new guidance documents and wanted more files under the new standards.
We also have contact information for RCMP to help our clients make inquiries as to what stage their security clearances are at. The fingerprinting and background checks are done by two different departments at RCMP. If an application appears to be “stuck”, it would be advantageous to find out if one or both of these stages are completed by RCMP. Let us know and we can help.
I feel that we are going to start seeing a lot more applications leave the queue, for better or worse, over the next 4 months. New applications going into Health Canada are encouraged to have every detail covered, to ensure it stays in queue. Our company can provide this – call us today for help.
Article by
Brian Wagner
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