Clint Sharples, CEO of Heritage Cannabis, gives a potted history of the medical cannabis industry in Canada, its current legal status, provincial variations in patient registrations, financial performance, the impact of COVID-19, and where the field is headed for the future.
The cannabis plant has been used as a therapeutic substance for thousands of years.
“Medical cannabis” or “medical marijuana” refers to any products made from cannabis or its active ingredients — primarily cannabinoids and terpenes — intended for health purposes. The Canadian government first legalized cannabis for medicinal purposes in 2001. In the decades following, the sector has seen continuous evolution to its governance, allowing Canada’s cannabis production companies to become power players on the international export market while granting its citizens access to regulated medicine.
A Brief History of Medical Cannabis in Canada
The passing of the Marihuana Medical Access Regulations (MMAR) on July 30, 2001, made cannabis a legal option for treating certain health conditions and allowed registered patients the right to either grow their own medicine, designate someone to grow it on their behalf, or purchase it directly from Health Canada.
This original bill was replaced and repealed by the Marijuana for Medical Purposes Regulations (MMPR) in June 2014, which established a licensing system for medical cannabis production, forcing patients to purchase their medicine solely from producers licensed by Health Canada. However, this decision made medicine unaffordable for a number of patients. In 2016, a Court ruled that the MMPR was unconstitutional because it did not provide patients with reasonable access to medical marijuana. The federal government was given six months to introduce replacement regulations.
Accordingly, on August 24, 2016, Access to Cannabis for Medical Purposes Regulations (ACMPR) came into force, with the overarching goal of improving access to medical cannabis. The new law included a personal cultivation regime, allowing patients to grow their own medicine, or designate a grower for them, harking back to the regulations around MMAR. Under Health Canada’s new registration scheme as part of the new law, personal and designated growers are each required to apply for a registration certificate. Patients are still able to purchase their medicine from licensed producers, which supply medical cannabis to patients throughout the country via a mail-order system.
A 2017 Marijuana Business Daily research report stated that the number of registered medical cannabis patients in Canada increased from 7,914 patients in Q1 of 2014 to 201,398 in Q2 2017. As of September 2018, 340,000 people were registered under ACMPR.
The Current State of Medical Cannabis in Canada
In October 2018, Canada became the first G7 nation to legalize cannabis for adult-use with the passing of Bill C-45, the Cannabis Act, allowing adults 18 years of age and older to possess, use, cultivate and purchase cannabis without the fear of persecution. However, it is important to note that self-medicating with recreational cannabis is not a safe substitute for supervised cannabinoid therapy.
In the year after adult-use cannabis was legalized, the number of active medical marijuana registrations in Canada appears to have plateaued, according to the latest data from Health Canada. As of March 2020, 35,227 individuals were registered with Health Canada for personal and designated cultivation of cannabis for their own medical purposes. 329,038 medical cannabis registrations were active with a federally licensed producer. That’s a decrease of 11 percent from the peak of 369,614 active registrations in September 2019, and nearly 5 percent lower than the 345,520 registered patients in October 2018.
Medical marijuana oil now accounts for about half of all cannabis sales in Canada. The average authorized amount of dried cannabis for medical purposes has decreased from 2.1g per day to 2g.
In order to obtain an ACMPR License from Health Canada under the Cannabis Act, individuals must first be prescribed medical cannabis by a certified Canadian medical practitioner. There are numerous companies that offer this service, pairing patients with legal, certified practitioners who, after a short consultation, will write a prescription. Patients can then purchase cannabis for medical purposes directly from a federally licensed seller.
Medical Cannabis by Province
The different provinces across Canada have seen different results with active registrants.
According to Health Canada, Ontario — the largest regulated medical market in the country — has 171,107 registered medical patients as of March, which is more than half of Canada’s total registered medical patients. This figure is up from 160,374 in October 2018 and represents an increase of 6.7 percent since legalization.
Alberta was home to 110,189 active medical marijuana registrations in October 2018, but as of March, that number has declined to 73,629 — a reduction of 33 percent.
Quebec has seen an increase of nearly 60 percent, up from 10,708 active registrants in October 2018 to 16,904 in March 2020.
Financial Returns of Canada’s Licensed Cannabis Producers
Economic figures surrounding medical cannabis revenue have been robust for both Aurora and Canopy, Canada’s two largest medical cannabis producers.
Aurora Cannabis reported 86,674 active registered patients as of March 31, 2020, down from 90,307 the previous quarter. For the fourth quarter of 2019, Aurora’s net cannabis revenue rose 61 percent to CA$94.6 million, with medical cannabis revenue increasing 10 percent to CA$29.7 million.
Canopy disclosed approximately 73,600 registered Canadian medical patients for the quarter ending in March 2019. The company earned CA$226.3 million in total net revenue, with CA$78.9 million coming from global medical sales and CA$140.5 million from recreational sales.
Canadian Cannabis as International Medicine
The Canadian government legalized cannabis on a federal level, giving producers the ability to export products and establish operations in other countries. Reports suggest that cannabis exports now “represent a considerable growth opportunity for licensed producers” and Canada’s largest producers have taken the opportunity to position themselves in emerging international markets.
According to Marijuana Business Daily, federally regulated producers in Canada exported roughly 3,740 kilograms (8,245 pounds) of dried cannabis for medical and scientific use in 2019, with just over 94 percent going to Germany.
Cannabis, Canada and COVID
Cannabis was considered an essential industry in Canada amid the coronavirus pandemic, with some companies, including Canopy, opting to move from brick and mortar dispensary sales to online sales and delivery.
According to recent Statistics Canada figures, the change had a positive impact on sales, with $181 million worth of cannabis sold in March, up 19.2 percent from the previous month.
In response to the COVID-19 pandemic, Health Canada has extended the expiry date to anyone registered with Health Canada or licensed sellers by six months.
Additionally, the Canadian Chamber of Commerce’s National Cannabis Working Group is asking the Canadian government to temporarily waive the 2.3 percent annual regulatory fee for part of 2020 “in order to support the country’s still-developing cannabis industry during the COVID-19 pandemic.”
“Health Canada is in a position to help the industry weather the impact of the crisis and position it for success afterward by providing license holders temporary relief by waiving payment of the 2.3 percent annual regulatory fee,” reports Marijuana Business Daily.
The Future of Medical Cannabis in Canada
According to Health Canada, the Canadian Institutes of Health Research (CIHR) is “investing significantly in research on cannabis and cannabinoids including, but not limited to, research related to use for medical purposes.” This will greatly benefit the Canadian citizens who rely on cannabinoid medicine to maintain a higher quality of life. It is also another example of just how far the industry has come in Canada since the legalization of medical cannabis in 2001. While there is no way to predict the future of the industry as perspectives and legislation continue to evolve, the impact of COVID-19 on cannabis will continue to reverberate well into 2021.