Pubdate: Mon, 30 Mar 2015
Source: Law Times (Canada)
Copyright: 2015 Canadian Lawyer Magazine Inc.
Contact:  http://www.lawtimesnews.com/
Details: http://www.mapinc.org/media/3095
Author: Shannon Kari

MEDICAL MARIJUANA CONTINUES TO BE SOURCE OF LITIGATION

Change to new regulatory regime among issues sparking legal
challenges

There has been one constant since the Ontario Court of Appeal struck
down the prohibition against possession of marijuana for medical
reasons in 2000: the subsequent rules imposed by the federal
government have been subject to repeated court challenges.

The courts have found the regulations that govern medical marijuana to
be invalid on more than one occasion and there are two current
proceedings before the courts that could again require the federal
government to go back to the drawing board.

A Federal Court judge in British Columbia is presiding over an ongoing
challenge to regulations that require those authorized to possess
medical marijuana to buy from approved producers in the private
sector. Late last month, the Supreme Court of Canada reserved its
decision in an appeal from British Columbia on whether the rules
permit only cannabis in dried form for medical marijuana patients.

The result is ongoing uncertainty in an area where the government has
rarely addressed the complaints of the medical marijuana community
without a court challenge. At the same time, it's a field where a
number of private sector investors are eagerly trying to get into what
they see as a growth market with even Health Canada officials
estimating there could be at least 400,000 legally registered medical
users by 2024.

To add to the complicated legal landscape, a Tax Court judge ruled
last year that even approved medical marijuana is subject to the goods
and services tax because it's more like an over-the-counter product
than a prescription drug.

Meanwhile, a new medical marijuana policy adopted earlier this year by
the College of Physicians and Surgeons of Ontario states that
approving cannabis use for a patient is equivalent to a
prescription.

For both people who are registered medical users and individuals and
companies seeking to grow cannabis, it's a confusing time. "I
sympathize with the patients," says John Fowler, a lawyer and
president of Supreme Pharmaceuticals Inc., a Toronto-based company
seeking a production licence.

"We have had Band-Aid solutions," he adds.

The Federal Court trial, which began in February in Vancouver, stems
from an action launched by Neil Allard and three other individuals
legally authorized to possess or produce marijuana under the marijuana
medical access regulations that the government repealed in March 2014.
The new framework, the marijuana for medical purposes regulations,
requires users to obtain their medicine from a licensed producer.

The new framework doesn't allow patients to produce marijuana for
themselves or obtain it from an authorized caregiver as was possible
under the previous regulations. The plaintiffs obtained an injunction
last year, which the Federal Court of Appeal upheld last year inCanada
v. Allard 2014.

The ruling permits licensees under the old scheme to continue to
produce marijuana for medical patients until the constitutional
challenge makes its way through the courts.

The Federal Court proceeding has heard evidence so far that the costs
for patients could be four to five times higher if they have to buy
from private producers as the new regulations don't regulate price. As
well, certain strains of cannabis they have developed to deal with
their symptoms wouldn't necessarily be available.

In the meantime, Health Canada is continuing to slowly approve new
producers for the medical marijuana market under the new
regulations.

Health Canada had received almost 1,200 applications for a production
licence as of the end of 2014, according to an affidavit filed in the
Federal Court proceeding. It receives about 15 new applications each
week. So far, Health Canada has issued production licences to 23 companies.

These companies have registered nearly 15,000 clients, says Health
Canada, and had sold about 1,600 kilograms of medical marijuana by the
end of last November. The court documents also suggest the price can
vary wildly from less than $2 per gram to as high as $15 per gram,
although some companies offer discounts to low-income
individuals.

Fowler, whose past experience was within the medical marijuana
community, says he understands the suspicion towards the private sector.

"It will take some time before people transition," says Fowler.
However, he suggests the old approach was a "broken system" that
didn't serve patients well with many of them having to obtain their
medicine on the black market.

"We have a friendly black market in Canada. But there is no quality
control," says Fowler.

"The quality of medicine will improve dramatically over the next few
years," he suggests, citing the prospect of private sector
competition.

His publicly traded company has a large property in southwestern
Ontario and a management team that includes a horticulture professor,
business executives, and people with ties to the medical marijuana
community.

Fowler agrees that securities and health regulators need to have a
strong oversight role to ensure the burgeoning industry has the
confidence of investors and medical users. "The more we regulate, the
more credibility there will be in this industry and the better it will
be for patients," says Fowler.

Jennifer Thorne, a defence lawyer in Kelowna, B.C., who also advises
clients seeking production licences, says the best regulatory
framework would treat marijuana similarly to other prescription
products available at a pharmacy. "It should be dispensed in a medical
setting, where you can consult with someone who knows the product,"
says Thorne.

In addition to deciding exactly who can produce for the medical
marijuana community, there's still the unresolved issue of what form
cannabis must be in to gain the legal approval of the federal government.

The Supreme Court of Canada heard arguments on March 20 in an appeal
by the federal government over a decision that found a prohibition on
oral or topical cannabis products, such as oils, was
unconstitutional.

The B.C. Court of Appeal ruled 2-1 last year in R v. Smith that the
restriction was arbitrary and there was no evidence that cannabis use
in edible products, teas or oils presented any greater a risk than
smoking dried marijuana.

One of the interveners at the Supreme Court representing three
HIV/AIDS organizations argued the onus is on the state if the use of a
therapy might attract criminal sanction. "If a patient sincerely
believes that the use of an alternative unapproved drug therapy might
alleviate their pain and suffering, section 7 of the Charter prevents
the state from criminalizing that patient's choice of medication,"
wrote lawyer Paul Burstein in arguments filed with the court.

The federal government disagrees. There's no right under the Charter
of Rights and Freedoms "to obtain or produce drugs based on a
subjective belief in their therapeutic value," wrote Paul Riley and
Kevin Wilson, two government lawyers involved in the case.

The Supreme Court's decision in Smith may turn out to be the most
significant court ruling related to medical marijuana because it could
significantly expand the industry, Thorne suggests. "If we are talking
about a medical product, it should be available in the form that is
most effective," she says.
- ---
MAP posted-by: Matt