Allard et al v. Canada Federal Court Decision Favours Patient’s Rights and LPs

Today, Judge Michael Phelan delivered his long awaited decision. Judge Phelan ruled that prohibiting medical marijuana patients from growing their medical marijuana violates their Section 7 rights under Canada’s Charter of Rights and Freedoms. He declared the MMPR unconstitutional and therefor invalid; however, he suspended his declaration of invalidity for six months to allow the government to come up with new regulations. For Licensed Producers and MMAR producers and users nothing has changed for now, but big changes within six months are now certain.

The government has six months before the Court’s declaration of invalidity becomes effective. The government has three choices: 1) amend the MMPR to make it constitutional, 2) enact a new or parallel medical marijuana regime that renders the regulatory regime constitutional or 3) do nothing and let the MMPR die in which case marijuana possession and production of any kind (including under the MMPR) would become criminal, except that specific enforcement activity would be constrained by the Charter i.e. persons with a medical prescription or authorization would be entitled to possess, use, grow and/or distribute marijuana.

Our view is that the government is likely to amend the MMPR and enact a parallel medical marijuana regime for individuals and personal caregivers and that both patients and LPs have good reason to celebrate the Court’s decision in Allard.

Here’s why the future regulatory regime is likely to be good for patients and LPs:

– the regime is likely to include the right for individuals to grow their own medicine and, potentially, for other individuals under their personal care;
– the regime is likely to permit patients to access marijuana in the quantity (i.e. grams/day) and format (i.e. oils, edibles and concentrations) prescribed by doctors;
– there will be additional legal sources for LPs and individuals to legally obtain starting materials;
– it may become easier for patients to source marijuana from more than one LP;
– more licenses will be granted under the MMPR to increase the quantity and variety of the available supply and to promote affordability for patients;
– there is no constitutional basis for regulating the pricing practices of LPs; and
– LPs may be permitted to open retail locations so that the legal supply available to patients is made more accessible.

In our view, the future regulatory regime will not include MMAR-like dispensaries and other “grey area” license pools because that structure was allowed to exist as a result of the constitutional flaws in the MMAR and the MMPR. If the government gets it right or, at least more right, the constitutional basis for permitting large-scale illegal growing and selling will disappear.

The future regulatory regime is likely to put more pressure on doctors as not just the gatekeepers but also the quantitative and qualitative regulators. Any government imposed limits, i.e. 5 grams per day, are arbitrary and unconstitutional. In addition, municipal governments could soon be faced with passing by-laws applicable to home marijuana production activities.

On the other hand, the government could avoid having to design, implement and administer a constitutionally valid regulatory regime for medical marijuana by legalizing uncontrolled marijuana access for all Canadians. While this solution would be appealing for its simplicity, it is highly unlikely for public safety and lost tax-revenue reasons. Also, Canada would be in violation of United Nations treaties to which it is a signatory.

If you have any questions or would like more information regarding the Marijuana for Medical Purposes Regulations or applying to be a licensed producer under the MMPR, call or email Koby Smutylo at 613 869 5440 or koby@lawyercorporation.ca.

Here is why the R. v. Smith SCC decision is good for MMPR Licensed Producers?

The Supreme Court of Canada’s release of the R. v. Smith decision yesterday morning was greeted with much excitement by patients, activists and Licensed Producers (“LPs”) under Canada’s Marihuana for Medical Purposes Regulation (“MMPR”).  For patients and activists the significance and impact of the decision are fairly obvious.  For LPs, the significance is a little less obvious.

Since LPs are governed by, and licensed under, the MMPR, until the MMPR is amended LPs may only legally sell dried marijuana.  R. v. Smith doesn’t change this reality.  Nonetheless, the R. v. Smith ruling is good for LPs.

In order for the MMPR to be a viable alternative to the illegal market, Health Canada will eventually change the law to permit LPs to produce and sell extracts.  Because patients want extracts and edibles, this will help LPs gain market share at the expense of the illegal cannabis market and the MMAR grandfathered market.  Furthermore, by allowing LPs to produce extracts and edibles, LPs will be able (i) to differentiate their product offering from other LPs, (ii) use more of the cannabis plan (i.e. plant product that is now garbage can be used to create extracts) (iii) create higher margin product and (iv) expand the patient market to include persons that would not use cannabis treatment if smoking is the only available method of ingestion.

If you have any questions or would like more information regarding applying to be a licensed producer under the MMPR, Canada’s Marijuana for Medical Purposes Regulations, call or email Koby Smutylo at 613 869 5440 or koby@lawyercorporation.ca.

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What does the Supreme Court of Canada’s decision in R v. Smith mean for patients, MMAR producers and MMPR licensed producers?

Earlier this morning, we published a concise summary of the SCC’s decision in R. v. Smith released today. See here. While the Court’s decision is clear, what is less clear is what it means for those patients authorized to possess and use marijuana for medical purposes under Canada’s MMAR and MMPR, for “Designated-Person” producers under Canada’s MMAR and for “Licensed Producers” under Canada’s MMPR.

For patients authorized to possess and use medical marijuana under the MMAR or the MMPR, the significance of the R. v. Smith ruling is clear: persons legally authorized to possess marijuana may legally create, possess and consume non-dried forms of medical marijuana.

For “Designated-Person” producers under Canada’s MMAR and “Licensed Producers” under Canada’s MMPR, the decision should not be interpreted as authorizing them to process and sell marijuana in forms other than dried. The Supreme Court did not rule on this issue. In fact, in R. v. Smith the constitutionality of the criminal charges against Mr. Smith was not challenged. Rather, at the trial level the Crown chose not to adduce any evidence and, as a result, Mr. Smith was acquitted.

If you have any questions or would like more information regarding applying to be a licensed producer under the MMPR, Canada’s Marijuana for Medical Purposes Regulations, call or email Koby Smutylo at 613 869 5440 or koby@lawyercorporation.ca.

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Supreme Court of Canada Judgement in R v. Smith: Court Rules Restriction to Dried Marijuana Violates Charter

The Supreme Court of Canada in a very strong ruling released this morning found that a medical marijuana access regime that only permits access to dried marijuana unjustifiably violates the guarantee of life, liberty and security of the person contrary to section 7 of Canada’s Charter of Rights and Freedoms. The Supreme Court ruled this violation of section 7 of the Charter is not reasonable and justified under section 1 of the Charter. According to the Court, the disconnect between the prohibition and its object renders it arbitrary under section 7 and also frustrates the requirement under section 1 of the Charter that the limit on the right be rationally connected to a pressing objective. For this reason the Supreme Court of Canada concluded the infringement of section 7 is not justified under section 1 of the Charter.

The Supreme Court of Canada ruled the appropriate remedy in the circumstances is a declaration that sections 4 and 5 of the Controlled Drugs and Substances Act (Canada) “are of no force and effect, to the extent that they prohibit a person with a medical authorization from possessing cannabis derivatives for medical purposes”.

If you have any questions or would like more information regarding applying to be a licensed producer under the MMPR, Canada’s Marijuana for Medical Purposes Regulations, call or email Koby Smutylo at 613 869 5440 or koby@lawyercorporation.ca.

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The Cookie and The Court – Medical Marijuauna Extracts

In R. v Owen Smith, the BC trial judge found that the regulatory scheme breached s. 7 of the Charter, was arbitrary, and could not be justified. He struck the word “dried’ and the definition of “dried marijuana” from the Regulations. A majority of the BC Court of Appeal dismissed the appeal, but varied the trial judge’s order by suspending the effect of the declaration for one year to give Parliament a chance to respond.
This decision was appealed by the Crown and is scheduled to be heard by the Supreme Court of Canada on March 20, 2015.
Until the SCC rules, the R. v Owen Smith decision makes it constitutionally protected in BC to possess and consume extracts by MMAR patients subject to the Allard injunction.  The decision does not cover MMPR patients per se but an MMPR patient charged in B.C. should be able to use the reasoning in the R. v Owen Smith decision to successfully defend against the charge.  Since this is a BC court decision, it is not binding on courts in other provinces and territories of Canada. So, neither MMAR nor MMPR patients outside of BC risk being charged and, potentially, convicted for marijuana extract possession and consumption.   I say “potentially” because Court of Appeal decisions are considered by lower courts in other provinces, so a person charged may use the same charter grounds to avoid a conviction.
In March, if the SCC upholds the BCCA decision than all Canadian MMAR injunction-protected patients and MMPR patients could use R. v. Owen Smith to avoid a conviction and Parliament would have one year to respond.  However, there are other possible outcomes….For example, the SCC could find that Owen Smith did not have standing to argue the constitutionality of the law and in doing so the SCC could avoid the issue altogether.  Also, even if the BCCA decision is upheld, there would continue to be uncertainty until Parliament reacts and, even then, such a reaction may be subject to further constitutional challenges.
Bottom line is that barring a strong decision by the SCC overturning R. v Owen Smith on constitutional grounds (i.e. not standing) we are in for a long period of uncertainty regarding the legality of extracts.

If you have any questions or would like more information regarding applying to be a licensed producer under the MMPR, Canada’s Marijuana for Medical Purposes Regulations, call or email Koby Smutylo at 613 869 5440 or koby@lawyercorporation.ca.

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MMPR – License Process and Update From Health Canada

On October 22, 2014, Health Canada issued a letter to applicants for Canada’s Marijuana for Medical Purposes Regulation licenses.  This letter provided certain interesting statistics, including the following:

  • as of the date of the letter, there were 21 licensed producers authorized to produce a total of approximately 45,000 kilograms per year;
  • as of June 30, 2014, there were approximately 7,900 clients registered with the licensed producers;
  • registered clients purchased 148 kg of marijuana in June 2014; 
  • as of the date of the letter, Health Canada had received 900 license applications.

The letter also provides an overview of the application process, certain additional guidance for LP applicants and also re-iterates that Health Canada’s objective is to balance its need to “ensure reasonable access to marijuana” with its mandate of of “protecting public health, safety and security”.

If you have any questions or would like more information regarding applying for a producer license under the MMPR or Canada’s Marijuana for Medical Purposes Regulations, call or email Koby Smutylo at 613 869 5440 or koby@lawyercorporation.ca.

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Security, You Own It! Written By Norm Boucher, Security Specialist

When dealing with the production and storage of high value items, security planning does not only make sense but, as in medical marihuana and other prescription drugs, it is required by applicable legislation such as the Marihuana for Medical Purposes Regulation (“MMPR”). In today’s world of fully integrated electronic systems, a good security system provider can help you meet many of Health Canada’s security requirements. Such security companies can provide a solid plan of all access controls and physical barriers but these components should not be mistaken for your company’s security plan nor should external security system providers be relied upon for your company’s security plan.  The licensed producer or other company with high value items should “own” its security plan.  

Full video coverage of a room is a good deterrent but it can be easily circumvented, especially if more than one person work in concert. And any physical barrier can be breached for a period. Employees can both be part of your security measures, and they can be a threat. A security plan is the integration of all aspects of a company’s activity to achieve maximum security while maintaining productivity. This difficult balance can only be achieved through a careful evaluation of threats and risks, a thorough examination of operational needs, building layout, personnel, and building architecture, to identify appropriate security measures.

The physical security requirements laid out under the MMPR and the Directive on Physical Security Requirements for Controlled Substance (DPSRCS) provide a starting point from which your security plan can be designed and implemented. From this, a fully comprehensive approach can be achieved where electronic access controls, physical barriers, alarm monitoring services, and security guard personnel can be combined with functional building layouts, operations protocols, and effective policies and procedures. A security plan is all those things working together to form an integral part of your business identity.

When dealing with security, each business location and activity is unique and should be looked at from an independent and fresh perspective. Each security plan is unique. This is a security feature in itself, ensuring that vulnerabilities of one site are not repeated in another. Furthermore, a good security plan, based on a careful evaluation of threat and risk, characterizes the integrity and strength an enterprise; it protects business continuity and contributes to the identity of the company by ensuring that processes and public relations efforts are both protected and supported.

The DPSRCS highlight the need for each enterprise to conduct a risk assessment before considering security measures. And Health Canada recognizes the need for producers to take ownership of their security by ensuring that every applicant submits its own version of security planning.

Take ownership of your security. Entering into a new venture offers many challenges, but it also provides an opportunity to create and integrate all aspects of security so that they meet budget requirements while seamlessly protecting your operations.

Written by Norm Boucher, Security Consultant and Retired RCMP Security Specialist.  Norm may be reached at 613.869.9154 or by email at norm@bouchermanagementgroup.com.  Norm consults with licensed producers and applicants on their security plans, often reviewing and improving, from a cost and security perspective, the proposals provided by third party vendors. 

 

 

Medical Marijuana License Application Process

In the past few months, we have had calls from would-be licensed producers under Canada’s Medical Marijuana Producer Regulations (“MMPR”) and also from investors inquiring about investing in a licensed producer applicant.  Both of these groups are wondering, for different reasons, about the process of obtaining a medical marijuana producer license under Canada’s MMPR.  

According to Health Canada, there are six steps to the process once your application has been received:

– Screening: the application is verified to make sure all relevant information has been provided, and required documents attached.  If information is missing, the application may be returned to you.

– Security clearance checks: Once all information is deemed present in your application, security clearance forms will be sent for processing. Note that until such a time as we receive the results from the security checks, there will be no further communications with the applicant. The time required to conduct these security checks varies with each application and you can expect that it will take a few months. Health Canada and the RCMP will not be able to provide you with updates.

– Reviewing: Once all security checks are obtained, the application will be reviewed to validate the information and documents provided.  Physical security plans will be reviewed and assessed.

– Ready to build (if required by applicant):  Once the application is deemed satisfactory, Health Canada will issue a notice informing the applicant that, if built to the specifications on the proposed plan, the security measures would meet the requirements of the MMPR.  Applicants must then build the security measures if this is not already done. 

– Pre-licence inspection: Upon confirmation from the applicant that the security measures are in place, a pre-licence application will be scheduled.  Upon completion of the inspection, the applicant must address any deficiencies identified.

– Issuance: Once the inspection is deemed satisfactory, the licence will be issued.

There are no guarantees that a license will be granted to an applicant, but Health Canada has advised that each complete application, that satisfies all the requirements, will receive a license.  

If you have any questions or would like more information regarding applying for a producer license under the MMPR or Canada’s Marihuana for Medical Purposes Regulations, call or email Koby Smutylo at 613 869 5440 or koby@lawyercorporation.ca.

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How to Advertise Medical Marijuana? A Short Primer for Licensed Producers

“If you grow it they will buy it” seems to be the mantra of the day.  But, in a world of tens – and soon to be hundreds  – of licensed producers under Canada’s Marihuana for Medical Purposes Regulations (“MMPR”), how will each licensed producer differentiate itself from the others?  Price and product experience are probably the obvious ways.  The challenge for licensed producers will be, in a competitive marketplace, how to communicate “product experience”.   There are, of course, quantitative measures to advertise such as % of THC and % of CBD.  However, there will be lots of producers advertising product with similar percentages of THC and CBD.   And, they are all telling consumers their products are “premium”, “high quality” and “the best” marijuana – whether or not the product price is $7/gram or $12/gram.

Should medical marijuana licensed producers take a lesson from the wine, beer or coffee industry for ways to market and differential their marijuana products?  This will be tempting, but illegal and likely to at best generate unwanted attention from Health Canada and at worst fines and jail time.   Big pharma is where licensed producers should be looking to for advertising and marketing lessons.

Marijuana is a narcotic and must be treated as such.  It is not a lifestyle, comfort or status product.   Marijuana must be treated as a medical product and the advertising and promotional activities available to marijuana producers licensed under MMPR are the same as those available to pharmaceutical companies in Canada except medical marijuana is approved by Health Canada for “medical purposes” but not for any specific treatment, which means the drug cannot be associated with any specific health claim.

A very much simplified summary of the law regarding advertising marijuana is as follows:

  • Advertisement to the general public is prohibited;
  • “Advertisement” is defined broadly to encompass any “representation” that “directly or indirectly” promotes the sale;
  • Advertising any drug to the general public as a treatment, preventative or cure for certain diseases, disorders or abnormal physical states, including depression, is prohibited.  Health Canada takes the position that if the primary purpose of the advertisement is to promote the sale of the drug, such advertisement may not be made to the general public;
  • Certain “help-seeking” and “reminder” ads are allowed, but these ads must not include a specific brand name or manufacturer or imply that a drug is the sole treatment available i.e. Ads that discuss a condition and suggest consumers ask their doctor about an unspecified treatment are permitted and no risk information is required to be included;
  • It is illegal to label, package, treat, process, sell or advertise any drug in a manner that is false, misleading or deceptive or is likely to create an erroneous impression regarding its character, value, quantity, composition, merit or safety;
  • Any advertisement must include the symbol “N”, “clearly and conspicuously”, to put consumers on notice that what is being advertised is a narcotic;
  • A licensed producer must include their name, as set out in their licence, on all the means by which the producer identifies themself in relation to cannabis, including advertising, product labels, orders, shipping documents and invoices;

So, how should an MMPR licensed producer of medical marijuana differentiate and “sell” its product?

Our advice is to focus on creating a brand focused on the producer – not the products.   Stand-out and be attractive to your target medical marijuana customers.

Second, have a “private” area on your website to promote marijuana products, but this private area should only be accessible to persons with medical marijuana prescriptions and certain other professionals (i.e. doctors and pharmacists).   It is important that the promotional information not be made “public”.

If you have any questions or would like more information regarding advertising medical marijuana or Canada’s Marihuana for Medical Purposes Regulations, call or email Koby Smutylo at 613 869 5440 or koby@lawyercorporation.ca.

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Federal Superior Court of Canada’s Injunction Welcomed by Applicants for Medical Marihuana Producer Licenses

In 2001, Health Canada granted access to marijuana for medical purposes by implementing the Marihuana Medical Access Regulations (“MMAR”).  Under MMAR, patients and other private persons were permitted to produce their own supply.  In 2013, the Government of Canada announced that MMAR would be replaced with new Marihuana for Medical Purposes Regulations (“MMPR”), thereby treating marijuana similar to the treatment of other narcotics approved for medical purposes.   Under MMPR, private production would be prohibited in favour of licensed medical marijuana production and distribution.  Health Canada’s authorization of the production of marijuana for medical purposes in private residences under MMAR will end March 31, 2014 and MMAR will be repealed and replaced on April 1, 2014 with the MMPR.

The prohibition on private production of medical marijuana is being challenged and in connection with this challenge, on March 21, 2014, a Federal Supreme Court of Canada judge granted an injunction that exempts currently licensed marijuana users and producers from the terms of the incoming MMPR.  Essentially, those exempt users and producers can continue to possess, use and produce medical marijuana under the MMAR rules.  Access to medical marijuana to treat chronic conditions was the basis for the Court’s decision to grant the injunction.

Surprisingly, applicants to become licensed producers under MMPR are welcoming the injunction since many will be sourcing their start-up marijuana plants from MMAR producers.  If an applicants does not receive its medical marihuana producer license by March 31, 2014 it faced losing its valuable supply and having to scramble for a new source.    The injunction is a temporary measure and it remains to be seen whether private production will ultimately be permitted to coexist with commercial licensed production.   If that is in fact the outcome, will licensed producers suffer from a reduction in their customer base?

If you have any questions or would like more information regarding the Federal Superior Court’s decision or the laws applicable to medical marijuana in Canada, call or email Koby Smutylo at 613 869 5440 or koby@lawyercorporation.ca.

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