4 Potential Pitfalls in the Process of Becoming a Licensed Medical Marijuana Producer in Canada

The Marihuana for Medical Purposes Regulations (MMPR), effective April 1, 2014, is a new set of rules for growing, purchasing and selling medical marijuana in Canada. Replacing the previous rules of the Marihuana for Medical Access Regulations (MMAR) (officially repealed on March 31, 2014), the MMPR provides the framework for the first commercial medical marijuana industry in Canada.

While hundreds, if not thousands, of hopeful entrepreneurs are rushing to cash in on what has been coined the Green Rush, there are several hurdles to becoming a Licensed Producer (LP) under the MMPR. With hundreds of applications submitted, Health Canada has only 13 authorized LPs listed on their website as at May 5, 2014. In an effort to increase the quality of a potential applicant's application, below are four potential pitfalls to avoid when applying to become an LP.

Proposed Site & Physical Security Measures

The MMPR brought an important change in production possibilities and specific guidance on physical security measures. The most significant change is that production sites must be indoors and not in a private dwelling (i.e., a place of residence). Further, Division 3 of the MMPR sets out guidelines for physical security measures which must be observed at the proposed site, some of which include: visual monitoring; intrusion detection systems; visual recording devices; monitoring by personnel; and restricted access. Health Canada has published several guidance documents to assist applicants with understanding these requirements.

The lesson: Applicants should complete appropriate due diligence on their proposed site and ensure it will meet MMPR standards prior to submitting an application. Consider engaging a specialized consultant to help you through this process.

Product Quality

Applicants need to familiarize themselves with the regulations relating to "Good Production Practices," which include product testing, storage of dried marihuana, equipment, the sanitation program, standard operating procedures, recall of product and quality assurance personnel.

The lesson: LPs and hopeful LPs are cautioned to follow the regulations and seek guidance when necessary to avoid possible refusal, suspension or revocation of an LP's licence on the basis of risks to public health, safety or security.

Stakeholders

Prior to submitting an application to become an LP, an applicant must provide written notice to several stakeholders of their intention to become an LP. Failing to inform the local police force, local fire authority and local government (i.e., City of Toronto) will likely result in a rejected application.

The lesson: Consider obtaining letters of support from key stakeholders to bolster your application.

Expertise

Applicants will want to provide comfort to Health Canada that their proposed team has the required qualifications to enable them to become an LP. Specifically, a quality assurance person must be designated and must have the appropriate qualifications. Health Canada will verify the accuracy of the information provided.

The lesson: Securing a talented and qualified quality assurance person will assure the quality of your application.

Applicants are encouraged to read and understand the MMPR, Health Canada's guidance document "Application To Become a Licensed Producer Under the Marihuana For Medical Purposes Regulations" as well as the other applicable guidance documents Health Canada has published to date. Applying to become an LP is a time consuming and potentially expensive process. Completing the appropriate due diligence in advance may help you avoid pitfalls and ultimately improve the quality of your application. At Bennett Jones we have a team of professional advisors that have been through the process with our MMPR clients and we would be happy to help you navigate the process.

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