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Medical Marijuana Program Regulations

Posted on April 24 2014 | Author: Doug Knox

The recent change in the Medical Marijuana regulations has resulted in a flurry of activity in attempts by many entrepreneurs to establish a licensed growing facility. With the exit of the government’s involvement with the growing operations and the discontinuing of the licenses to grow for personal use by individuals, the new government regulations for commercial production growing is an attempt to mitigate the growing need for the prescribed products.

To date, there are twelve licensed operators in or very near production of their first crop. There are locations in British Columbia, Saskatchewan, Manitoba, and Ontario. However, there are a huge number of applicants in the license queue.

License seekers face several hurdles in their quest.

  • Applicants must present Health Canada with a comprehensive plan for the proposed site including an acceptable security implementation for the proposed site.
  • Depending on the location facility, the security build-out requirements could require implementation costs upward of $1 million or more. The plan must be executed before production begins.
  • There will be no direct marketing to prescribed patients.
  • Producers must ship directly to prescribed patients by secure courier.
  • Current financing options are limited since none of the major banks are willing to enter into the risk associated with the projects.
  • Private investment is the most likely course. At least one of the companies has secured financing from US capital sources.

The Tweed facility in the decommissioned Hershey building in Smith’s Falls is the first to become a public company. Trading for the company commenced April 4,2014.

“Tweed rose to $2.52 at 2:07 p.m. in Toronto Friday, up 183% from the issue price of 89 cents based on a private placement on March 7. The shares sank from an opening price of $5.10 at the start of public trading and were the third-most traded in Canada with 9.64 million shares changing hands.” (Financial Post 2014-04-04)

It will be interesting to follow the list of licensees as the industry establishes itself!

Check out the list at: http://www.hc-sc.gc.ca/dhp-mps/marihuana/info/list-eng.php

Doug Knox
VP Technology

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