Health Canada’s MMPR Struggles to Find Solid Ground
February 2nd, 2015
Policy, Top News
Health Canada’s Marijuana for Medical Purposes Regulations (“MMPR”) was designed to simplify the process of growing and selling medical marijuana within the country. Unlike the old Medical Marijuana Access Regulations (“MMAR”) that it replaced, the MMPR program sought to license private and public corporations to grow and distribute medical marijuana in a much more cost-effective and controlled manner than government and individual growing.
Since its implementation in 2012-2013, the MMPR program has approved just 23 licensed producers (“LPs”) – instead of the 60 that it originally projected by this time – and costs associated with reviewing applications alone has exceeded $2 million.
Several companies in the space have complained that Health Canada continues to “move the goal posts” when it comes to regulatory approval, creating a lot of uncertainty for both management teams and investors in these projects. Of course, many more companies are unwilling to discuss their frustrations publicly for fear of incurring Health Canada’s wrath.
The other problem is that existing LPs have already run into issues with medical marijuana production. Peace Naturals has already recalled two batches of medical marijuana citing contamination issues, while Tweed Marijuana Inc. [stockquote symbol=TWMJF] reportedly had some of its medical marijuana shipments seized by the Canadian police. With these problems already occurring with just 23 LPs, the agency may be hesitant to approve many others.
The high level of uncertainty within the industry hasn’t helped many public companies that are pursuing regulatory approvals. Over the past year, many public companies in the space have seen their shares decline significantly as approvals become increasingly uncertain. Many of these companies have also spent millions of dollars building out facilities after receiving “Ready to Build” letters only to wait to hear back from the agency.
These dynamics have led some companies to move into ancillary businesses that are focused on selling into the United States markets, where many U.S. states have already implemented programs. With both medical and adult-use approvals in many states, the United States has seen its marijuana industry dramatically expand over the past year. The problem is that there is uncertainty on a federal level as to how long legalization will last.
In the end, many Canadian companies waiting for MMPR approvals will continue to wait as the agency works through its backlog.
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
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