Pubdate: Sat, 22 Aug 2015
Source: Vancouver Sun (CN BC)
Copyright: 2015 Postmedia Network Inc.
Contact:  http://www.canada.com/vancouversun/
Details: http://www.mapinc.org/media/477
Author: Lori Culbert
Page: A8

MARIJUANA BUSINESS NO GOLD RUSH

Licensed Growers Dial Back Expectations While Illegal Dispensaries Flourish

The gold rush excitement created by Health Canada licensing medical 
marijuana businesses appears to be cooling, in part because of B.C.'s 
illegal dispensaries and pot users who are challenging federal 
government rules in court.

As of March, 25 commercial operators in Canada - six in B.C. - have 
been authorized by Health Canada to produce or sell marijuana grown 
under strict conditions and mailed to clients with doctor's prescriptions.

Ottawa, which drastically changed the rules for getting medical pot 
when it banned patients in 2014 from growing their own bud, has 
rejected 901 business applications. Another 324 are being reviewed 
for things like security clearance and pre-licensing inspections. 
More than one-third of those under-review applications, or 116 of 
them, are from B.C.-based companies. Health Canada says it will not 
update the number of licences issued until September at the earliest.

(Ottawa will not identify the name or location of the 116 applicants 
hoping to start new medicinal pot operations in B.C. A Sun 
investigation, with the help of marijuana-industry marketing company 
MMJ Hype, confirmed 22 of the applicants and posted them on an 
interactive map at vancouversun.com.)

In the meantime, one of B.C.'s licensed companies, Tilray in Nanaimo, 
over-projected demand, and recently laid off a third of its workers. 
Other companies who believed they were close to getting licences have 
sunk millions of dollars into buildings and staff, only to be stuck 
in a holding pattern.

Many of these companies have recruited former politicians and 
high-ranking police officers to bolster their business acumen and 
security cachet.

There is demand for medicinal marijuana, as more doctors and elected 
officials - such as Liberal leader Justin Trudeau - acknowledge it 
can ease suffering for some patients.

But in Vancouver, many of those patients - along with many more 
recreational users - are simply visiting the 100 or so illegal 
dispensaries, recently regulated by city hall.

In addition, B.C. residents who used to be federally authorized to 
grow their own weed sued Ottawa, arguing the new rules were overly 
restrictive. Until the Federal Court judge rules on the case, those 
who were allowed to possess and grow marijuana under the old system 
continue to do so under a temporary injunction.

So, although there is demand, the supply picture is a complicated mess.

"On the surface it looks pretty straight forward, but below the 
surface you have all this craziness happening," said former B.C. 
premier Mike Harcourt.

Harcourt is chairman of True Leaf Medicine Inc., which he hopes is 
close to gaining final approval after providing 1,500 pages of 
information requested by Health Canada. While waiting for the 
licence, True Leaf is using its Lumby location and staff to produce 
pet food containing hemp (but none of the THC that provides the high 
in marijuana).

Initially frustrated by the slow pace of the licence approvals, 
Harcourt said it is now perhaps a blessing that True Leaf hasn't sunk 
millions into the medicinal marijuana operation.

"The whole thing has been pretty nutso for the last six months or a 
year with the dispensaries, and it may have been not a bad idea to 
not get a licence to build and spend a whole bunch of dough ... to 
then get clobbered by the dispensaries," he said.

Harcourt, who said his company's philosophy is not about the "get 
high" side of marijuana but the "get well" aspect, is confident the 
future will get rosier for companies like his and Tilray. One reason 
is that the new Vancouver regulations could force as many as 
two-thirds of the city dispensaries to close.

The long-term solution to this marijuana debate, he argues, is to 
follow the example of Colorado and Washington state.

"The answer is legalization. But that won't happen until we see what 
happens Oct. 19," Harcourt said, referring to the federal election. 
"It is a very rapidly changing game right now."

Kash Heed, former B.C. solicitor general and former West Vancouver 
police chief, is a strategic consultant with National Green BioMed, 
which has applied to grow medicinal marijuana near Mission. The 
company, which recently gave $1 million to the University of B.C. to 
to study the therapeutic effects of cannabis, is chaired by Herb 
Dhaliwal, a former Vancouver MP and federal cabinet minister.

Heed, who once ran the Vancouver police drug squad, has been asked 
for help from several frustrated licence applicants, and gives them 
all the same advice: "The board of directors and people in key 
positions need to be squeaky clean" to pass Health Canada's reviews.

He believes in the licensed producer model, arguing it provides 
pesticide-free pot, encourages clinical trials to determine which 
strains produce the best results for patients, and mails the weed 
directly to patients with doctor's prescriptions. The knock against 
the dispensaries is that patients don't know who supplies the 
marijuana, and whether it contains impurities or comes from organized crime.

Heed, who is also involved with a second medicinal marijuana 
applicant in Ontario with prime minister John Turner, thinks the 
future is bright for applicants with good people and good business plans.

In a brief email to The Sun, Ottawa denied the popular dispensaries 
will slow down licence approvals.

"Dispensaries are illegal and do not affect Health Canada's ... 
program that has strict requirements to become a licensed producer," 
spokesman Andre Gagnon said.

There are an estimated 100 dispensaries in Vancouver. Other 
communities, such as Victoria and the City of North Vancouver, are 
considering how to best handle these shops. North Vancouver District 
and Surrey prohibit dispensaries, but say those bylaws could be 
rescinded if the federal government regulated the businesses.

Some municipalities, such as Delta, Abbotsford and Chilliwack, have 
even passed restrictions on licensed marijuana growers. Other city 
halls, such as Nanaimo, have embraced them as good employers.

Neil Boyd, head of Simon Fraser University's criminology department, 
said there are three markets in B.C. for pot - the black market on 
the street, the illegal dispensaries, and the licensed producers - 
who are all in competition.

Prices on the street are dropping, mainly due to the industry's lower 
risk as a result of reluctance by police to lay charges for personal 
possession. Boyd is skeptical of the claims that marijuana production 
could be a multi-million industry for Canada, noting studies show 
only about 10 per cent of the population uses weed.

Like Heed, Boyd believes marijuana should be legalized.

Unlike Heed, Boyd is not a fan of the way Health Canada has 
structured this program.

"I would be wary of an investment in the commercial industry right 
now," he said.

For example, he doesn't think it makes sense for patients to receive 
their medicinal pot in the mail rather than from a doctor or 
pharmacist, and said the requirement to use weed for medical, not 
recreational, reasons is difficult to define.

"There's just so much uncertainty in the market place. The label we 
apply to medical versus recreational - that's a pretty fuzzy line at 
times," Boyd said. "Once you get into anxiety and stress release, how 
is (using pot for those) different from someone who comes home at the 
end of the day and has a glass of wine?"

Maxwell Duchaine, of the Vancouver marijuana-industry marketing 
agency MMJ Hype, said at the moment the supply of medicinal pot is 
simply outstripping demand. "I think Health Canada is being very 
cautious in their approval process," he said.

But he does believe in the long-run - as the stigma against pot 
slowly goes up in smoke and as using it becomes more acceptable - 
that more applicants will get licensed by Health Canada.

"Off the books, (marijuana) is the biggest industry in BC. We are 
doing our best to get as much of this on the books as possible. So we 
can get some of that tax revenue, so we can start benefiting society 
rather than the black markets," Duchaine said.

"Things are changing and changing for the better. People are getting 
access now to medical marijuana."

*

[sidebar]

Big Names

Medical marijuana production companies are backed by big names, 
including former politicians and police officers. Websites for 
companies applying for a Health Canada application to grow 
medicinalmarijuana say they have recruited some heavy hitters:

Larry Campbell, Liberal senator and former Vancouver mayor and former 
B.C. chief coroner - Vodis Pharmaceuticals, Vancouver

John Reynolds, former provincial cabinet minister and federal MP - 
Vodis Pharmaceuticals, Vancouver

Mike Harcourt , former B.C. premier - True Leaf, Lumby Herb Dhaliwal 
, former MP and cabinet minister - National Green BioMed, Mission

Kash Heed, former B.C. solicitor general and West Vancouver police 
chief - National Green BioMed, Mission

John Turner , former prime minister - new company in Pelham, Ont.

Barry Daniel, former Abbotsford police chief - Wildflower Marijuana, Parksville

Ross Rebagliati, Olympic gold medallist - Ross' Gold, Whistler

Ernie Eves, former Ontario premier - Timeless Herbal Care, Jamaica and Canada
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MAP posted-by: Jay Bergstrom