The Canadian Press Posted: Sep 29, 2013 3:52 PM ET
The Conservative government is launching a $1.3-billion free market in medical marijuana on Tuesday, eventually providing an expected 450,000 Canadians with quality weed. Health Canada is phasing out an older system on Monday that mostly relied on small-scale, homegrown medical marijuana of varying quality, often diverted illegally to the black market. In its place, large indoor marijuana farms certified by the RCMP and health inspectors will produce, package and distribute a range of standardized weed, 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 the department, said in an interview. "It's a whole other ball game."The sanctioned birth of large-scale, free-market marijuana production comes as the Conservatives pillory Liberal Leader Justin Trudeau's campaign to legalize recreational marijuana.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, with the first two receiving licences just last week.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, 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 the department, but officials project that number will swell more than 10-fold, to as many as 450,000 people, by 2024. (more)
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Canada chocolate factory may get new life as marijuana farm
By Julie Gordon Thu Sep 26, 2013 8:02pm EDT (Reuters) -
A Canadian start-up wants to turn an empty chocolate factory in eastern Ontario into a production facility for medical marijuana, a possible boost for a local economy that has been hurting since the landmark Hershey plant shut down in 2008. The old factory, which for decades churned out Hershey chocolate bars, has been conditionally sold to a start-up called Tweed Inc, which plans to use about a third of the 470,000 square foot plant to grow medical marijuana. "It's an exciting opportunity," said Mark Zekulin, Tweed's vice president of community engagement. "There is a demand and there's good opportunity in this market." Tweed Inc has applied to Health Canada for a permit to grow medical marijuana at the factory in Smith Falls, Ontario, some 350 km (220 miles) from Toronto. It will distribute its product to patients across Canada who have permission to use the drug. Canada legalized medical marijuana in 2001, authorizing an initial 500 people to grow and smoke the drug. That number has since ballooned to about 30,000, causing headaches for those who regulate and police marijuana use. The government earlier this year responded with a plan to take legal production out of private homes and license private companies to produce medical marijuana for authorized patients. Hence Tweed's efforts to get into the legal growing and distribution game. The company, which expects to hear back from regulators soon, plans to spend about C$1.5 million ($1.45 million) retrofitting the old chocolate factory. Once up and running, the plant will employ about 100 people.(more)
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Facts and figures on changing medical marijuana rules in Canada
Dean Beeby, The Canadian Press Published Sunday, September 29, 2013 2:17PM EDT
OTTAWA -- Facts and figures on the medical marijuana regime in Canada, which is changing rules by March 31, 2014, to encourage large private-sector growers:
Current number of medical marijuana users approved by Health Canada: 37,359, up from 477 in 2002.
Number of patients with personal licences to grow marijuana for themselves: 25,600 (ends March 31, 2014)
Number of growers licenced to produce marijuana for a maximum of two patients each: 4,200 (ends March 31, 2014)
Current number of entrepreneur applications to grow medical marijuana under new rules allowing larger facilities: 156
Health Canada's current price for medical marijuana produced under contract: $5 a gram (government sales end March 31, 2014)
Health Canada's projection of profitable private-sector price in 2014 after the new free-market kicks in: $7.60
Projection of average price as market matures in several years: $8.80
Advertised price of products of CannaMed, the first licensed distributor in the new system: $9 to $12 a gram
Current estimated cost of black-market dried marijuana purchased on the street: $10 to $15 a gram
Projected total additional cost to all approved patients as a result of the new system: $166 million a year for 10 years
Health Canada projection of number of approved medical marijuana patients in 2014: up to 58,000
Projection of number of patients by 2024: Up to 450,000
Sales projections for the new industry by 2024: $1.3 billion a year.
Sources: Health Canada; CannaMed
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