Thinking about shipping medical marihuana from Canada to another country? Here are four threshold questions that Canadian exporters and foreign importers should consider before entering into any agreement for a cross-border sale of medical marihuana.
1. Is the international trade in medical marihuana permitted in the importing and exporting countries?
Make sure the exporting and importing countries permit the international trade of medical marihuana. International trade in marihuana is controlled under the Single Convention on Narcotic Drugs, 1961, as amended by the Protocol Amending the Single Convention on Narcotic Drugs (1972). The Single Convention seeks to balance the manufacture and distribution (domestic and international) of narcotic drugs for medical and scientific purposes with the economic and social problems caused by illicit use of these drugs. Parties to the Single Convention are free to prohibit the cultivation, production and distribution of marihuana, so always check to see if the proposed transaction is permitted under the laws of the country of export and the country of import.
The Marihuana for Medical Purposes Regulations (MMPR) implements Canada's obligations regime for the controlled importation and exportation of medical marihuana in accordance with the Single Convention. Health Canada administers imports and exports of medical marihuana, with the support of the Canada Border Services Agency (CBSA). Health Canada will not issue an export permit for medical marihuana if the export shipment will contravene the laws of the country of final import or any country of transit or transshipment.
2. Are the exporter and importer each licensed to engage in the international trade of medical marihuana and have they each obtained a permit for the transaction?
The Single Convention requires that if a party to the convention permits international trade in medical marihuana, both the exporter and the importer must be licensed by the relevant authority in their home jurisdictions. The importer and exporter must each obtain a shipment-specific permit for each international shipment. Keep in mind that the licensing and permit requirements are distinct: a licence holder is not allowed to import or export medical marihuana without a permit. Holding a licence does not guarantee that the relevant authorities will issue the necessary import and export permits to facilitate the shipment. Importers and exporters are advised to address this uncertainty in their commercial agreements.
Under the MMPR, only a Licensed Producer (LP) can apply for an export permit from Health Canada. Health Canada has discretion in granting an export permit and can impose conditions on the permit to comply with an international obligation (including the Single Convention), or reduce any potential public health, safety or security risk, including the risk of the marihuana being diverted to an illicit market or use.
3. does your commercial agreement account for MMPR requirements?
Canadian exporters and foreign importers need to be aware of the commercial implications of the MMPR export permit requirements. For example, export permits are shipment-specific, meaning that Health Canada will not issue a blanket permit to export a given quantity of medical marihuana to a specific importer over the course of a year. Each shipment for export requires its own export permit. Also, the quantity, type, intended use and composition of the medical marihuana that is shipped must match the information on the import and export permits and the importer, port of exit from Canada, and shipping route must remain the same. If the importer and exporter change these elements late in the day, new permits may have to be obtained, likely causing significant delays.
4. Have you considered the requirements of other government departments and agencies?
Health Canada is not the only government department that oversees the international trade in medical marihuana. The LP which exports the goods will have to comply with CBSA registration and reporting requirements applicable to all exporters. Also, the competent authority in the country of import may require that the exporter obtain phytosanitary or similar certificates, to establish that the medical marijuana is free of pests or pesticides or satisfies compositional standards, in which case the LP will have to engage with the Canadian Food Inspection Agency.
While these are four vital considerations, there are other issues involved with the regulatory requirements for the export of medical marihuana from Canada. If you are considering acting as a foreign importer or Canadian exporter of medical marihuana, it would be prudent to seek the advice of legal counsel. At Bennett Jones we have a team of professional advisors that can provide guidance on all facets of the medical marijuana industry as it continues to advance.