On 1st April, 2014 the new regulations of Canada opened up the medical marijuana supply to licensed large scale growers. In spite, the industry is in its infancy, several public companies are involved, such as, Lexaria, Enertopia, Creative Edge Nutrition, Supreme Pharmaceuticals, Medican and Tweed.
Under the previous regulations, which was known as MMAR (Medical Marijuana Access Regulations) medical users were permitted to grow their personal marijuana, or a third party can also grow it for them. Around 30,000 out of the 40,000 registered users did this, at the same time as the remainder bought from sole supplier of Health Canada at a subsidized price of $5 per gram.
The new regulations of MMPR are intended to control illegal sales, and put tighter controls on the medical marijuana quality. Under the new laws, the growing of marijuana at home would be illegal, and patients will have to purchase it from a limited number of large scale licensed suppliers.
Tweed Marijuana Inc, a well-known public company has already entered this industry. It trades on the TSX venture exchange under the symbol TWD and on the grey market in the United States. Other licensed growers are also showing interest to go public by manner of reverse takeovers, and multiple other public companies have publicized proposals to enter the medical marijuana business and to apply for a production license in Canada.
If a Company wants to grow marijuana, it has to get a license from Health Canada. The process to apply for a license includes filling out a set of security clearance, a 15 page application form and sending details of the proposed growing facility. The main personnel involved in the processing and growing of marijuana have to have a security clearance that actually verifies that they have no preceding criminal record.
As soon as the application is submitted, it will be reviewed for completeness. The security clearance forms will be sent to the police for proper checking. This process may take several months. Once security checks are finished, the Health Canada will assess and review the plans for the proposed facility. The main purpose of this review is to make sure that the facility will have the essential security features. The end user should deal with the grower directly, although licensed growers are permitted to sell medical marijuana to one another.