ate Medical MariJuana production new on-reserve industry
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n its place, large indoor marijuana farms certified by the RCMP and health inspectors will produce, package and distribute a range of standardized marijuana, all of it sold for whatever price the market will bear. The first sales are expected in the next few weeks, delivered directly by secure courier. “We’re fairly confident that we’ll have a healthy commercial industry in time,” Sophie Galarneau, a senior official with Health Canada, said in a recent newspaper interview. The current number of registered medical marijuana users approved by Health Canada is 37,359, up almost 80 percent from the 477 who were registered in in 2002. Some recent statistics on the industry show that: • The number of patients who currently hold personal licences to grow marijuana for themselves is 25,600 however that right expires in March 31, 2014 and from then on they will have to buy from licensed facilities. • The number of growers licenced to produce marijuana for a maximum of two patients each is 4,200 and these licenses also expire on March 31, 2014. • Th e current number of entrepreneur applications (as of November 30th, 2013) to grow medical marijuana under the new rules allowing larger facilities is 156. •H ealth Canada’s current price for medical marijuana produced under contract is $5 a gram, •H ealth Canada’s projection of a profitable private-sector price in 2014 after the new free-market kicks in is $7.60 per gram. The
projection of average price as the market matures in several years is $8.80 per gram. • The current advertised price per gram of products from CannaMed, the first licensed distributor in the new system, is between $9 and $12 per gram. Liberal Leader Justin Trudeau took his stance on marijuana a step further in a public appearance in Kelowna, B.C. in December. “I’m actually not in favour of decriminalizing cannabis, I’m in favour of legalizing, taxing and regulating it,” he said, over a burst of applause from the crowd. Trudeau gave his opinion without being asked a direct question, in response to a sign advocating the decriminalization of cannabis. “It’s one of the only ways to keep it out of the hands of our kids,” he added. His next sentence of “Liberals understand the need to consider ending the prohibition of marijuana and addressing the root causes of crime to see real results,” raised big cheers from the crowd. In response to Trudeau’s comments, Minister of Justice and Attorney General Peter MacKay’s spokesperson said the Conservative government has no intention of legalizing or decriminalizing marijuana. “These drugs are illegal because of the harmful effect they have on users and on society. We will continue protecting the interests of families across this country,” wrote Paloma Aguilar, a spokesperson for the Minister, in an email to Global News. Health Canada is placing no limits on the number of these new capital-intensive facilities, which will have mandatory vaults and security systems. Private-dwelling production will be banned. Imports from places such as the Netherlands will be allowed. Already 156 firms have applied for lucrative producer and distributor status since June of 2013, with the first two receiving licenses in late November of 2013. The old system fostered only a cottage industry, with 4,200 growers licensed to produce for a maximum of two patients each. The Mounties have complained repeatedly these grow-ops were often a front for criminal organizations. The next six months are a transition period, as Health Canada phases out the
old system by March 31 of 2014, while encouraging medical marijuana users to register under the replacement regime and to start buying from the new factory-farms. There are currently 37,400 medical marijuana users recognized by Health Canada, but official’s project that number will swell more than 10-fold, to as many as 450,000 people, by 2024. The profit potential is enormous. A gram of dried marijuana bud on the street sells for about $10 and Health Canada projects the legal stuff will average about $7.60 next year, as producers set prices without interference from government. Saskatoon-based Prairie Plant Systems, and its subsidiary CanniMed Ltd., were granted the first two licenses under the new system and are already advertising their new products on the web. Prospective patients, including those under the current system, must get a medical professional to prescribe medical marijuana using a government-approved form. The changes in the system have raised the interest of a number of First Nations communities and individuals across the country. As these new production facilities can be anywhere, as all product is shipped by courier, they may be a way of creating employment on reserves that are geographically challenged to create employment. Of course any medical marijuana facility opened on-reserve will be controversial, but as they will be so tightly regulated and controlled there is little chance of any illegal sales in the communities where they may be located. According to statements from current license applicants an investment of as little as $300,000 can create up to 10 full-time jobs, as well as profit for the owners of upwards of $500,000 per annum once the facility is in in full production. That’s a very attractive proposition for First Nations communities struggling to create employment and discretionary income! So will we see First Nations communities applying for licenses for this new industry in the near future? It will be interesting to see how the debate evolves.
Aboriginal Marketplace - January/February 2014 17