FEDERAL REG

SOR/2016-230: Access to Cannabis for Medical Purposes Regulations

REGISTRATION OF FEDERAL REGULATION - VIA OIC DATABASE, PRIOR TO PART II OF THE GAZETTE

Registered
August 5, 2016


REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the regulations.) Executive summary Issues: In the decision rendered on February 24, 2016, in Allard v. Canada, the Federal Court of Canada found the Marihuana for Medical Purposes Regulations (MMPR) unconstitutional in that they do not provide Canadians with reasonable access to marihuana for medical purposes. The declaration of... (Click for more)


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Published on August 5, 2016

Bill Summary

SOR/2016-230: Access to Cannabis for Medical Purposes Regulations

REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the regulations.) Executive summary Issues: In the decision rendered on February 24, 2016, in Allard v. Canada, the Federal Court of Canada found the Marihuana for Medical Purposes Regulations (MMPR) unconstitutional in that they do not provide Canadians with reasonable access to marihuana for medical purposes. The declaration of unconstitutionality was suspended for six months from the date of the decision — until August 24, 2016 — to permit the Government to promulgate a new regime for marihuana for medical purposes. Not responding within the timeline mandated by the court would leave individuals with a need for cannabis for medical purposes without lawful access to cannabis. Further, there would be no legal framework to authorize the commercial production and sale of quality-controlled cannabis for medical purposes, creating health, safety, and security risks to those who would be forced to purchase cannabis from unregulated sources. In addition, in June 2015, the Supreme Court of Canada (SCC) ruled that restricting medical access to marihuana to its dried form is inconsistent with the Canadian Charter of Rights and Freedoms (the Charter) [R. v. Smith]. While the Minister of Health issued exemptions under section 56 of the Controlled Drugs and Substances Act (CDSA) to respond to the R. v. Smith decision, the relevant exemptions must be incorporated into regulation to more clearly articulate regulatory requirements and simplify the regulatory framework governing cannabis for medical purposes. Description: The Access to Cannabis for Medical Purposes Regulations (ACMPR) enable accessibility and affordability by providing individuals who need cannabis for medical purposes with three options by which to access cannabis: through commercial licensed producers, by producing it themselves (personal production) or by designating someone to produce it for them (designated production). The ACMPR substantively incorporate the regulatory framework established under the MMPR for commercial licensed producers and the one established under the former Marihuana Medical Access Regulations (MMAR) for personal production and designated production. While the former MMPR and MMAR restricted access to dried marihuana, the ACMPR also allow for the production and possession of cannabis in forms other than dried, further to the June 2015 SCC decision in R. v. Smith. Further changes from these previous regulatory regimes generally stem from the harmonization of these systems with each other, and from the need to accommodate the expansion of cannabis products permitted. The most notable changes from the MMPR/MMAR regimes include the introduction of a new source of starting materials for personal and designated production; and an expanded role of the registered person in designated production — meaning that a registered person can now also take part in production activities, which were previously only conducted by the designated producer. Consequential amendments to the Narcotic Control Regulations and the New Classes of Practitioners Regulations have been made. The Cannabis Exemption (Food and Drugs Act) Regulations replace the Marihuana Exemption (Food and Drugs Act) Regulations, which are repealed. The MMPR are repealed. Cost-benefit statement: Incremental costs of approximately $1.5 million in present value (PV) in the first fiscal year (2016–2017) and annualized average costs of approximately $3.4 million PV are expected for Health Canada in implementing the ACMPR. Costs are dependent on, and may vary according to, the volume of applications received. Any incremental administrative or compliance burden costs placed on the commercial industry are expected to be minimal and to be offset by new revenue generation opportunities. The cost to produce via personal or designated production, including any associated compliance burden, is assumed by the individuals who choose to do so. Costs will be similar to those assumed by individuals under the former MMAR. Overall benefits of the ACMPR include increased options for access, while preserving the secure industry that enables access to qualitycontrolled cannabis for medical purposes established under the former MMPR. “One-for-One” Rule and small business lens: The ACMPR are exempted from the “One-for-One” Rule given that they implement non-discretionary obligations. The small business lens does not apply, as the regulations are not expected to have any significant impact on compliance or administrative burden for small businesses. Domestic and international coordination and cooperation: The ACMPR are consistent with Canada’s commitment to maintain control over the production and distribution of cannabis, as required by international conventions on the control of narcotic drugs and psychotropic substances. Background Canada is a party to three United Nations (UN) conventions that regulate narcotic and psychotropic substances: the 1961 Single Convention on Narcotic Drugs, the 1971 Convention on Psychotropic Substances and the 1988 Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. Canada has implemented the essential aspects of the UN conventions by virtue of the CDSA and its regulations. Cannabis for medical purposes is regulated under both the CDSA and the Food and Drugs Act (FDA). The CDSA and its regulations provide a framework for control of substances that can alter mental processes and that may harm an individual or society when misused or diverted to an illicit market. The purpose of the CDSA and its regulations is to protect public health and maintain public safety by balancing the need for access to these substances for medical, scientific, and industrial purposes with the need to minimize the risk of their misuse or diversion. The FDA and its regulations provide a framework to regulate the safety, efficacy, and quality of drugs. The Food and Drug Regulations (FDR) set out a framework for the authorization of drugs for sale in Canada. Drug manufacturers submit evidence on the effectiveness, dosage, route of administration, contraindications, side effects, and quality of a drug. If Health Canada reviewers conclude that the overall benefits of the drug outweigh its risks, the product will be authorized for sale in Canada. There are a number of products containing cannabis which have been authorized for sale under the FDR in Canada. These include Sativex®, a buccal spray containing extracts of cannabis with standardized concentrations of delta-9-tetrahydrocannabinol (THC) and cannabidiol (CBD). It is authorized to treat certain symptoms associated with multiple sclerosis. It is also conditionally authorized for pain relief in adults with advanced cancer; and Marinol®, a capsule containing synthetic THC. It was authorized for the treatment of AIDS-related anorexia, as well as nausea and vomiting due to cancer chemotherapy, but it was discontinued in Canada. In these cases, the manufacturers were required to meet the requirements of the FDA and its regulations in order to sell these products in Canada. Marihuana itself has not been authorized as a therapeutic product in Canada or in any other country. However, Canadian courts have determined that individuals who have demonstrated a medical need for marihuana, its preparations or its derivatives must have reasonable access to a legal source of these substances for medical purposes. Therefore, production of dried marihuana in the past under the MMAR was exempted from the application of the FDA and its regulations, with the exception of marihuana sold or imported to be used for the purpose of a clinical trial. Canadians have been able to access dried marihuana for medical purposes since 1999, when the Marihuana Medical Access Program was first established. At that time, individuals were authorized to possess dried marihuana and/or produce a limited number of marihuana plants for medical purposes via the issuance of an exemption under section 56 of the CDSA. In 2001, the MMAR were established to authorize access to marihuana for medical necessity. The MMAR evolved over time, mainly in response to a series of court decisions, and at the time of their repeal on March 31, 2014, medically authorized persons had three options for access to marihuana for medical purposes: producing it themselves (personal production), designating a producer to produce marihuana for them (designated production), or purchasing it from Health Canada. With exponential increases in program participation and in the number of plants being produced, concerns about this regime were raised by physicians, municipalities, law enforcement, and other stakeholders. The MMPR were developed as a comprehensive response to various concerns raised by stakeholders in relation to the former MMAR, and came into force on June 7, 2013. The MMPR created the conditions for a commercial industry that produces and distributes quality-controlled dried marihuana to individuals who have the support of their health care practitioner. As of May 31, 2016, 31 licensed producers were authorized to produce and/or sell to nearly 70 000 clients. However, as a consequence of a Federal Court injunction order issued under Allard v. Canada, nearly 28 000 former MMAR licence holders are able to continue their personal and designated production under the terms and conditions of their licences until otherwise ordered by the Federal Court. In addition, as a result of a SCC decision issued in R. v. Smith in June 2015, individuals authorized to possess marihuana under the former MMPR and those falling under the terms of a court injunction (e.g. the Allard injunction) may now possess and alter cannabis in forms other than dried of their own choosing for their own use (e.g. cannabis oil). In order to eliminate uncertainty around a legal source of supply of cannabis, the Minister of Health issued exemptions under section 56 of the CDSA in July 2015, in part to allow licensed producers to produce and sell cannabis oil and fresh marihuana buds and leaves in addition to dried marihuana, and to allow for authorized users to possess and alter different forms of cannabis. Finally, in February 2016, the Federal Court of Canada found the MMPR unconstitutional in that they do not provide Canadians reasonable access (i.e. affordability, availability) to marihuana for medical purposes. More specifically, the Court was of the view that the marihuana for medical purposes regime breached section 7 of the Charter by placing limits on access to marihuana for medical purposes (e.g. the elimination of personal production and the restriction to purchasing from licensed producers). In response, Health Canada committed to introducing changes to its regulatory framework for marihuana for medical purposes to address the issue of reasonable access. Issues The declaration of unconstitutionality was suspended for six months from the date of the decision in Allard v. Canada — until August 24, 2016. The Government committed to responding within that timeframe by promulgating regulations that provide reasonable access to cannabis for medical purposes. In addition, in June 2015 the SCC ruled that restricting medical access to marihuana to its dried form is inconsistent with the Charter (R. v. Smith). While the Government issued exemptions under the CDSA to respond to the Smith decision, these provisions must be incorporated into regulation to more clearly articulate regulatory requirements and simplify the regulatory framework governing cannabis for medical purposes. Objectives The objective of the ACMPR is to provide Canadians with a greater range of options to access cannabis for medical purposes in order to address the issue of reasonable access as identified by the court. Description The ACMPR provide reasonable access by enabling individuals who have the support of their health care practitioner to access cannabis for medical purposes through three access points: commercial licensed producers, personal production or designated production. The ACMPR substantively incorporate the regulatory framework established under the former MMPR for access through the commercial industry and the former personal/designated production regime under the former MMAR. The ACMPR also allow for the production and possession of cannabis in forms other than dried, further to the June 2015 SCC decision in R. v. Smith, by incorporating into regulation the relevant section 56 CDSA class exemptions issued in response to the decision. The ACMPR have two parts: Part 1: commercial production by licensed producers responsible for the production and distribution of quality-controlled fresh or dried marihuana, cannabis oil or starting materials (i.e. seeds and plants) in secure and sanitary environments (i.e. akin to the former MMPR regime); and Part 2: personal and designated production regime that enables registered individuals to produce their own cannabis or designate someone to produce it for them (i.e. akin to the former MMAR regime). It is important to note that in the ACMPR, “marihuana” means the substance referred to as “Cannabis (marihuana)” in subitem 1(2) of Schedule II to the CDSA, which includes marihuana plants and dried or fresh marihuana, whereas “cannabis” means a substance set out in item 1 of Schedule II to the CDSA that is inclusive of marihuana as well as cannabis preparations and derivatives. General provisions Obtaining a supply of cannabis Health Canada maintains that the determination as to whether the use of cannabis for medical purposes is appropriate for a particular individual is best made through a discussion with an authorized health care practitioner. To obtain cannabis for medical purposes as a client of a licensed producer or as a registered person for the purpose of personal or designated production, an individual must first see an authorized health care practitioner and obtain a medical document. Authorized health care practitioners include physicians in all provinces and territories (P/Ts) and nurse practitioners in P/Ts where supporting access to marihuana for medical purposes is included under their scope of practice or in legislation. The medical document signifies the health care practitioner’s support for access to marihuana indicating, among other things, the supported daily quantity in grams of dried marihuana. An individual or the person responsible for him/her (e.g. parents of a child) can then send an application and the original medical document to a licensed producer of his/her choice, if he/she wants to access commercially produced fresh or dried marihuana or cannabis oil, or to Health Canada if he/she chooses to produce his/her own cannabis or designate someone else to produce it. A medical document allows an individual to register with a licensed producer or with Health Canada for the period of use indicated by the authorized health care practitioner, but for no more than one year, after which a new medical document is required. The transfer of medical documents between licensed producers is not permitted. An individual may register with Health Canada either to be a personal producer or to have a designated producer, but not for both at the same time. An individual can, however, access cannabis from licensed producers while accessing cannabis from personal or designated production. In all scenarios where more than one source of supply is desired, the individual would have to discuss this with his/her health care practitioner and would have to obtain separate medical documents — specifically one medical document for Health Canada, and one for each licensed producer. The health care practitioner may choose to divide the daily quantity as expressed in grams of dried marihuana between multiple medical documents. The exceptions to this rule relate to obtaining (1) a supply of starting materials (marihuana seeds or plants); or (2) an interim supply of fresh or dried marihuana or cannabis oil while personal or designated production is being established. In both cases, a person registered with Health Canada can become a client of a licensed producer using his/her Health Canada registration certificate to obtain marihuana seeds and/or plants, and/or a supply of fresh or dried marihuana or cannabis oil while plants mature. Possession of cannabis An individual who obtains fresh or dried marihuana or cannabis oil for his/her own medical purposes from a licensed producer, or who is registered with Health Canada to access cannabis through personal or designated production, is authorized to possess at any one time a limited amount of cannabis. Similarly, an individual responsible for a person who requires cannabis for medical purposes can legally possess a limited amount of cannabis under these circumstances. An individual is authorized to possess a total quantity of fresh or dried marihuana, cannabis oil, or products resulting from the alteration of these substances that does not exceed the equivalent of the lesser of 150 g or 30 times the daily quantity of dried marihuana (see “Dried marihuana equivalency factor”) stipulated by the authorized health care practitioner. Under the ACMPR, a client is authorized to receive the equivalent of 30 times the daily quantity of dried marihuana within each 30-day period beginning on the date of the first sale. Under the ACMPR, a client of a licensed producer can demonstrate that he/she is in legal possession of cannabis by showing a law enforcement official a client-specific label affixed to the product’s container, or an accompanying client-specific document, as well as an appropriate piece of photo identification (see “Packaging, labelling, and shipping”). Licensed producers are required to confirm to a member of a Canadian police force, in the context of an investigation, whether a named individual is a registered client or an individual responsible for a registered client. An individual registered with Health Canada to possess or produce cannabis and a designated producer can demonstrate that he/she is authorized to possess and conduct activities with cannabis by showing law enforcement the registration certificate issued by the Minister of Health. In the context of an investigation, a Canadian police force or a member of a Canadian police force can contact Health Canada to verify details of the registration, such as the maximum number of marihuana plants permitted, the production and storage site addresses, and the storage limit. Health care practitioners An individual who requires access to cannabis for medical purposes would generally obtain a medical document from an authorized health care practitioner. The medical document will contain similar information to that on a prescription. Specifically, the authorized health care practitioner will have to indicate his/her licence information, the name and date of birth of the patient, a period of use of up to one year, and a daily quantity as expressed in grams of dried marihuana. A health care practitioner can transfer fresh or dried marihuana or cannabis oil to a person under his/her professional care or to an individual who is responsible for that person. The authority to transfer does not permit an authorized health care practitioner to provide fresh or dried marihuana or cannabis oil in exchange for something of value from an individual. In their role as health care providers and first point of contact for patients, authorized health care practitioners support access by signing the medical document with which an individual may obtain cannabis under the ACMPR. In a hospital setting, fresh or dried marihuana or cannabis oil may be administered, sold, or provided to a patient of the hospital or to an individual responsible for the patient as permitted by the person in charge of the hospital and as authorized under the Narcotic Control Regulations (NCR). Part 1 — Commercial production by licensed producers The majority of Part 1 incorporates the requirements of the former MMPR and relevant section 56 CDSA exemptions that responded to the decision in R. v. Smith. New provisions that did not form part of the previous framework include Requirements for licensed producers to notify the Minister of Health prior to commencing a recall. Provisions enabling individuals to receive their 30-day supply of cannabis within each 30-day period beginning on the date of the first sale. They will still be subject to the possession limit of the lesser of the equivalent of 30 times the daily quantity of dried marihuana or of 150 g. Labelling requirements to include the percentage or the amount of THC and CBD that fresh and dried marihuana could yield, taking into the account the potential to convert THC-Acid and CBD-Acid (see footnote 4) into THC and CBD, respectively (already required for cannabis oil as part of the section 56 exemption); for cannabis oil to include the carrier oil used, so that consumers have the information they need about ingredients contained in the product to make informed decisions; and for cannabis oil in dosage form to include the number of capsules or units in the container, the net weight, and volume of each capsule or unit. The requirement for accuracy of weight and volume of products in packages to be between 95% and 105%. The addition of disintegration testing as part of the good production practices (GPPs) for cannabis oil in capsules or similar dosage forms. Requirement that all analytical testing must be done using validated methods (e.g. contaminants, disintegration, and solvent residue testing). Provisions enabling the tracking, production, and sale of starting materials (i.e. seeds and plants) by licensed producers. Permitted activities and general obligations Part 1 of the ACMPR sets out a licensing scheme that is intended to allow for the commercial production of cannabis, comparable to that for other narcotics used for medical purposes. This permits commercial production in a secure environment while regulating the quality of fresh or dried marihuana or cannabis oil, thus reducing public health, safety, and security risks. Commercial production sites by licensed producers are only to be located indoors, and not in a private dwelling. Licensing Either an individual or a corporation is eligible to become a licensed producer. In the application, applicants are required to describe the activities they wish to conduct with cannabis and the purpose for conducting those activities. Licensed producers can also become licensed to conduct certain activities with standardized samples of chemical substances that occur naturally in the marihuana plant in order to conduct analytical testing. For example, they will need to possess pure samples of THC and CBD in order to determine the percentage of THC and CBD in the product. A number of conditions must be met before the issuance of a licence. The licensed producer must designate key personnel under the licence. The senior person in charge has overall responsibility for management of the activities carried out at the licensed site, while the responsible person in charge (RPIC), and alternate RPICs, if applicable, supervise all activities being carried out with cannabis. Key personnel, along with directors and officers in the case of a corporation, must hold a valid security clearance, issued by the Minister of Health (see “Security” section for further details). The applicant for a production licence must also provide a written notification of the application to the local police force, local fire authority, and local government. The notice must specify the activities for which the licence will be sought, and the address of the site at which activities will be conducted. Another notice to these parties is required when the licence is granted, an amendment is approved, the licence is suspended or revoked for any reason, or when the licence is reinstated. The applicant must provide information that allows Health Canada to assess whether the applicant has certain key measures in place as follows: a detailed description of the physical security measures that will be put in place at the site; a detailed description of how the licensed producer will keep records of activities with cannabis; a quality assurance report that shows that the buildings, equipment, and proposed sanitation program to be used meet the GPPs (see “Good production practices”) requirements; a copy of the notices provided to the local police force, local fire authority, and local government; the maximum quantity of fresh or dried marihuana or cannabis oil to be produced and sold or provided under licence (if applicable); and floor plans of the site. The ACMPR also outline a number of reasons for which the Minister of Health is required to refuse to issue, renew, or amend a licence. These include the following: reasonable grounds to believe that false or misleading information has been provided with the application; information received from a peace officer or other authority that gives the Minister reasonable grounds to believe that the applicant has been involved in the diversion of a controlled substance; the issuance or continuation of the licence will likely create a risk to public health, safety, or security, including diversion; and key personnel do not hold a valid security clearance. Once issued, a licence is valid for up to three years and can be renewed. The ACMPR also set out a process for amendments to any information on the licence (e.g. the licensed producer wishes to increase its production yield or change sites). Licensed producers are also subject to regular, unannounced compliance and enforcement inspections. Inspections can also occur when there is reason to believe the Regulations are being contravened. Good production practices The FDA applies to cannabis produced under the ACMPR and prohibits the sale of cannabis that had been produced under unsanitary conditions or that has been adulterated. Licensed producers are also subject to the GPPs outlined in the ACMPR. The GPPs require cleanliness of the premises and equipment. The licensed producer is also required to employ a quality assurance person with appropriate training, experience, and technical knowledge to approve the quality of fresh and dried marihuana, cannabis oil, and marihuana seeds and plants prior to making them available for sale. Finally, licensed producers have to test their fresh and dried marihuana and cannabis oil for microbial and chemical contaminants and ensure they are below generally accepted tolerance limits for human consumption, as established in any publication referred to in Schedule B to the FDA (i.e. various pharmacopoeia and formularies). Validated testing methods must be used. Cannabis oil must not contain residues of solvents other than those specified, and under acceptable limits. In addition, licensed producers must conduct disintegration testing on capsules or similar dosage forms to ensure that these products will disintegrate appropriately when ingested. In the event that a licensed producer undertakes a recall, the licensed producer must notify Health Canada prior to commencing a recall. Dried marihuana equivalency factor Licensed producers are required to determine the quantity of fresh marihuana or cannabis oil that is equivalent to 1 g of dried marihuana and make this information available on the product label, their Web site, or upon request. For substances obtained from a licensed producer and products resulting from the alteration of these substances, individuals must calculate their possession limit by taking into account the dried marihuana equivalency factor, and in the case of products resulting from alterations, by also taking into account the weight of fresh or dried marihuana — or the volume of any cannabis oil — that was used to make them. Packaging, labelling, and shipping Fresh or dried marihuana or cannabis oil must be packaged in a tamper-evident and child-resistant container. The maximum package size for fresh or dried marihuana or cannabis oil will be 30 g of dried marihuana or its equivalent. Each package will contain standard information about the product, including the weight in grams, the percentage by weight of THC and of CBD for all fresh and dried marihuana, the percentage of THC and CBD that the product could yield (i.e. including amounts of THC + THC-Acid, and CBD + CBD-Acid), the packaging date, the expiry date if one has been established by stability testing, and a warning statement to “KEEP OUT OF REACH OF CHILDREN.” For cannabis oil, additional labelling requirements include the carrier oil used, the amount of THC and CBD in milligrams per millilitre (mg/ml) or in milligrams per capsule, potential food allergens in the product, the equivalency factor, and a warning not to ingest oil if for topical use. If the product is in a capsule or similar dosage form, the number of capsules, the net weight, and the volume in each capsule or unit must also be provided, and the quantity of THC cannot exceed a maximum yield of 10 mg per capsule or unit, taking into account the potential to convert THC-Acid into THC. The licensed producer must also affix a client-specific label, similar to a patient-specific prescription drug label, to the package. For fresh or dried marihuana or cannabis oil, this label must contain the name of the client and the name of the authorized health care practitioner who provided the medical document, the daily quantity of dried marihuana, and the end of the validity period as indicated on the medical document. The label must also include the shipping date and the anticipated date of delivery to the registered client. The licensed producer must produce a separate duplicate document of this label to send to the client. This duplicate document or the product label, as well as an appropriate piece of photo identification, can serve to demonstrate legal possession (see “Possession of cannabis”). Each package of fresh or dried marihuana, marihuana seeds or plants, or cannabis oil sold to a client must also be accompanied by a copy of the most recent version of the Health Canada document entitled Consumer Information — Cannabis (Marihuana, marijuana). This document indicates that the safety and efficacy of cannabis for medical purposes has not been established and provides a summary of the known information about the uses and risks of cannabis for medical purposes so that individuals can be informed about their treatment choice. When selling seeds and plants, licensed producers must ensure that they are sold in a container or a package, respectively, that is tamper resistant. Containers for seeds must also keep the seeds dry and free from contamination. Client labels for the immediate container of seeds and on each plant or package of plants must contain the name of the licensed producer, the name of the client, the expiry date of the client’s registration, and the shipping date. The FDA provisions also apply in order to prohibit labelling, packaging, or selling in a manner that is false, misleading, or likely to create an erroneous impression about the character or safety of the drug. For example, unsubstantiated health claims cannot be put on product packaging. Advertising any narcotic to the general public is prohibited under the NCR, and this prohibition continues to apply to cannabis. As with other narcotics, this is intended to prevent known and potential harms to the health of Canadians who are vulnerable with respect to the advertising of prescription drugs. To help individuals identify a licensed producer, Health Canada publishes the names and contact information of licensed producers on its Web site. Import and export Licensed producers are permitted to engage in the import or export of seeds, plants, or dried marihuana if they have obtained an import or export permit from Health Canada. The import/export permit framework is similar to that for other controlled substances and is intended to maintain control over the movement of controlled substances, consistent with Canada’s obligations under international conventions on the control of narcotic drugs and psychotropic substances. Security Health Canada’s Directive on Physical Security Requirements for Controlled Substances establishes security requirements for the storage of all controlled substances, including cannabis. These requirements are scaled to the illicit market value of the controlled substance and to the crime rates in various areas. The ACMPR set out physical security requirements for the entire site, as well as for areas within a site where cannabis is present. These include all areas where a licensed activity is conducted with cannabis (i.e. a lab, the production room, the area where cannabis is packaged and labelled). Access to these areas is restricted only to individuals whose presence is required because of their work responsibilities. Licensed producers must put systems in place to ensure that access is controlled at all times, as well as 24/7 visual monitoring systems to detect unlawful conduct. The restricted areas must also be secured by an intrusion detection system that will detect attempted or actual unauthorized access to the area. The same principles of visual monitoring and intrusion detection apply to the perimeter of the entire site. Licensed producers must also ensure the site and its restricted areas include physical security barriers designed to prevent unauthorized entry. Personnel monitoring the security and surveillance systems of a licensed site must take action in response to a detected incident and record the details of the action(s) taken. Should an applicant for a licence fail to demonstrate that appropriate physical security measures as outlined in the ACMPR are in place, the production licence could be refused. The ACMPR also include requirements that the holder of the production licence, directors and officers (in the case of a corporation), and all key personnel must hold enhanced security clearances prior to the issuance of a producer’s licence. To obtain an enhanced security clearance, these individuals are required to submit an application with personal information and documents to Health Canada, so that checks and verifications of relevant files of law enforcement agencies can be conducted. As well as criminal record checks, these clearances involve a global evaluation of the applicant’s potential associations with criminal or violent organizations, associations with individuals linked to such organizations, and the risk of whether the applicant might be induced to assist, abet, or commit any act that will pose a risk to the control of the production and distribution of cannabis. Should the applicant not successfully obtain a security clearance, the production licence could be refused. Information sharing The ACMPR include provisions that require licensed producers to share information with appropriate authorities in certain circumstances. For example, law enforcement needs a way to verify whether a named individual is a registered client of the producer. If a member of a Canadian police force requires information in the course of an investigation, a licensed producer is required to confirm as soon as feasible, within 72 hours after receiving the request, whether the individual is a registered client or an individual who is responsible for a registered client and the daily quantity of dried marihuana specified in the medical document or the individual’s registration with the Minister of Health under Part 2 of the ACMPR. Licensed producers are required to provide P/T health care licensing authorities with factual information about a health care practitioner — notably patient information —from the medical document when requested by a licensing authority to support a professional investigation. Consistent with the objective of providing information to health care licensing authorities to allow them to more effectively monitor the practices of their members, licensed producers must, when requested by the relevant health care licensing authority, provide the health care practitioner information (name, address, and professional licence number), daily quantity of dried marihuana indicated on the medical document, period of use, date the medical document was signed by the practitioner, and basic patient information to the health care licensing authority. Licensed producers must communicate this information to the relevant health care licensing authority in writing on a quarterly basis. New information-sharing provisions have also been created to require licensed producers to notify Health Canada if they refuse to register an applicant whose application is supported by the Minister of Health under Part 2. Distribution through licensed producers The primary means of distribution of dried and fresh marihuana, cannabis oil, and marihuana seeds and plants is directly from the licensed producer to the registered client using secure shipping methods, as the ACMPR do not allow for storefront or retail distribution centres. Before selling to an individual, a licensed producer must register the individual as a client. In the process of registering a client on the basis of a medical document, a licensed producer must verify that the supporting health care practitioner is authorized to practice the profession in the province in which he/she was consulted by the prospective client and that he/she has not been prohibited from prescribing narcotics. A licensed producer must ensure that the applicant has consulted with the health care practitioner and that the information in the medical document is correct and complete by confirming this with the health care practitioner’s office in the event that the signature of the health care practitioner is not known. A licensed producer can also register a client using a registration certificate issued by Health Canada in place of a medical document in order to provide starting materials (i.e. marihuana seeds and plants) and/or an interim supply of dried or fresh marihuana or cannabis oil before the registered or designated production yields a harvestable crop. Dried and fresh marihuana, cannabis oil, and marihuana seeds and plants must be shipped directly to a registered client at a shipping address authorized in the Regulations, using a shipping service that includes a means of tracking the package during transit. Shipments must be securely packed and shipped in a package that will not allow the contents to be identified visually or by odour. Record keeping Licensed producers must keep records of their activities with cannabis, including all transactions (sale, exportation, and importation), all products returned from clients, and an inventory of cannabis (e.g. seeds, fresh harvested marihuana, dried marihuana, cannabis oil, marihuana plants, and packaged marihuana). All records must be kept for a period of at least two years, in a format that is easily auditable and available to Health Canada upon request. Part 2 — Production for Own Medical Purposes and Production by a Designated Person Part 2 of the ACMPR sets out a registration framework that allows for personal-use and designated production of cannabis (including cultivation of plants and alteration of products) for medical purposes. Note: The majority of Part 2 incorporates the requirements of the former MMAR and relevant section 56 CDSA exemptions that respond to the decision in R. v. Smith with required modifications to incorporate the production, storage and possession of products other than dried marihuana or plants. New provisions that did not form part of the previous framework include the following: Proof of possession and registration can be demonstrated through a registration certificate issued by Health Canada. Starting materials (i.e. seeds and plants) can be obtained through licensed producers. Interim supply of cannabis (until plants are ready) can be obtained through licensed producers. Security measures do not need to be listed on the registration application, but those registering to possess and produce cannabis must declare that security measures are in place to keep plants and products secure. Information sharing provisions have been expanded to enable proactive sharing of information on registered persons with P/T health care licensing authorities. Registration with Minister To be eligible to apply to Health Canada under Part 2 of the ACMPR to produce cannabis for medical purposes, or designate someone to produce it on his/her behalf, an individual with a medical document must ordinarily reside in Canada. A personal or designated producer must be an adult. Additionally, the eligibility criteria include that an applicant for a registration as a personal producer must not have been convicted in the preceding 10 years of a designated marihuana offence that was committed while he/she was authorized to produce marihuana under the CDSA other than under the ACMPR or a designated cannabis offence that was committed while authorized under the ACMPR to produce cannabis. If the preference is to designate another individual to produce cannabis, this person must be indicated in the application, and must meet a separate set of eligibility criteria, including that he/she has not been convicted, as an adult, of a designated drug offence in the preceding 10 years. Although minors are not able to register for personal production under these Regulations, a person who is responsible for the minor (e.g. parent) can apply for a registration on behalf of the minor and can request to be the designated person for the production of cannabis. The individual seeking registration to produce cannabis for his/her own medical purposes, or the individual who is responsible for him/her, must submit a medical document and an application containing information such as personal information, such as name and date of birth; residential address, production, and storage site addresses; whether the cultivation of marihuana will take place indoors and/or outdoors; property owner consent for the production site (if required); a declaration that he/she will take all necessary measures to ensure the security of the cannabis and that the proposed site is not adjacent to a school, public playground, daycare, or other public place frequented mainly by persons under 18 years of age if the proposed production area involves outdoor production; and a declaration by the designated producer (if applicable). Grounds for refusal The Minister must refuse to register an applicant (either for personal or designated production) based on a number of grounds, including ineligibility; false or misleading information in the application to register; a medical document that is no longer valid; if a producer would be authorized to produce marihuana plants under more than two registrations; or the proposed site for the production of marihuana plants would be a production site under more than four registrations. If the Minister proposes to refuse to register an applicant, the applicant will be notified in writing of the reason for the proposed refusal and will be provided with an opportunity to be heard. Successful registration Following a review of the application, if the requirements are met successfully and there are no applicable grounds for refusal, the Minister must register the applicant. The registered person will receive a registration certificate, and, if applicable, a document containing information relating to the production will be sent to the designated person. The registration certificate provides the individual with the necessary information to understand the authorized activities. Furthermore, this certificate can serve as the means of establishing the individual’s lawful proof of possession/production if required by law enforcement. Registrations are valid for a period of up to a year, based on the period of use specified by the health care practitioner on the medical document. Renewals A registered person can apply to renew his/her registration with Health Canada prior to the expiry date of the registration. Registration amendments A registered person can amend his/her registration. These amendments may relate to any information set out in the registration, including the name of the registered or designated person, the address of the production site, and the designated producer (i.e. replacing the designated producer with a new person). The application must include the registration number, a description of the proposed amendment, the supporting reason for it, the information and documents required in a registration application that are relevant to it, and the date that it is to take effect. In the case of a change in the name of the registered person, the designated person, or an individual responsible for the registered person, proof of the change must also be submitted. In the case of a new medical document (e.g. change in daily amount supported by the health care practitioner), a new registration application must be submitted. Authorized activities As a registered person, an individual is authorized to possess and alter cannabis for his/her own medical purposes. He/she must comply with the requirements of the ACMPR and with the registration, including with the possession limits established based on the equivalent of the lesser of the 30-day supply (derived from the daily quantity supported by the health care practitioner) or 150 g, as expressed in grams of dried marihuana. A registered person whose registration specifies a designated person may also, if an adult, participate in the activities that the designated person is authorized to conduct under the registration. A registered person who produces for his/her own medical use may produce, transport, and store cannabis in accordance with the requirements of Part 2 of the ACMPR and with the registration. A designated producer may produce cannabis for the medical purposes of the registered person, store, transport, ship, provide, or deliver cannabis in accordance with the requirements of Part 2 of the ACMPR and with the registration. The shipping, provision, or delivery may only be to the registered person (i.e. the medically authorized person) or the person responsible for the registered person. Dried marihuana equivalency The daily quantity of dried marihuana authorized, and maximum possession and storage amounts, are articulated in terms of grams of dried marihuana. Registered and designated persons are required to manage their limits based on the quantity of fresh marihuana, cannabis oil, or other products that are equivalent to a given quantity of dried marihuana calculated in accordance with the regulations. For these purposes, 5 g of fresh marihuana is determined to be equivalent to 1 g of dried marihuana. The quantity of products that is equivalent to a given quantity of dried marihuana is calculated by taking into account the weight of fresh or dried marihuana that was used to make the products. Maximum production and storage amounts The Regulations establish formulas for converting the supported daily quantity of dried marihuana into a maximum number of plants and maximum quantity of dried marihuana in storage. The formulas apply to both personal and designated production, and cover indoor, outdoor, and partial indoor / partial outdoor production. The formulas convert the daily quantity supported by the health care practitioner into a maximum number of plants. The formulas take into account differences in indoor and outdoor growing conditions, and apply standard values for the following elements: Plant yields: 30 g indoors and 250 g outdoors. Growing cycles: Three indoors and one outdoors. Crop loss: 20% loss allowance indoors and 30% outdoors. Under indoor growing, every 1 g per day of dried marihuana that is medically authorized results in the production of five plants. Under outdoor growing, every 1 g per day of dried marihuana that is medically authorized results in the production of two plants. If the production of marihuana plants is partly indoors and partly outdoors, every 1 g per day of dried marihuana results in four plants indoors and one plant outdoors. Personal and designated producers are required to securely store cannabis indoors at the site authorized in the registration, per storage limits indicated in the registration. Storage limits are based on the plant limit and anticipated yield of dried marihuana produced per plant (i.e. 30 g for plants grown indoors and 250 g for plants grown outdoors). Like the formulas for plant limits, the formulas for storage limits were originally developed and consulted on in 2001 (i.e. were part of the former MMAR). The storage formulas allow producers to maintain reasonable amounts of inventory while growing and/or drying newly harvested material. Applying the formula applicable to indoor production, for example, a producer growing 10 plants would be allowed to store the equivalent of a maximum of 450 g of dried marihuana. Maximum number of registrations An individual can produce under two registrations (i.e. for two others as a designated person or one other person as a designated producer and him/herself as a personal producer). In addition, a maximum of four registrations is permitted per production site. Cancellation of registration The registered person may request that Health Canada cancel the registration. Persons responsible for the registered person may also submit a cancellation request on his/her behalf. Registration may also be cancelled by Health Canada for reasons such as ineligibility of the registered person or designated producer; the registration was issued on the basis of false or misleading information; the registration is to produce at a site where there is already production under four registrations; the health care practitioner no longer supports the individual’s use of dried marihuana for clinical reasons; or the registered person dies or ceases to be ordinarily resident in Canada. Upon cancellation of the registration, the production of cannabis under the registration ceases to be authorized. The Minister of Health must give the registered person written notice of the reasons for the proposed cancellation and an opportunity for the registered person to be heard. Obtaining starting materials A person who is registered to produce cannabis or have a designated person produce it for him/her will need access to starting materials (i.e. seeds or plants). After registering with Health Canada, an individual can obtain starting materials from a licensed producer. Licensed producers are permitted to register clients using a Health Canada registration certificate in place of a medical document in order to provide starting materials. These starting materials may be either seeds or plants, shipped in compliance with the packaging, and relevant labelling and shipping requirements outlined in Part 1 of the ACMPR. Only a registered person is permitted to become a client of a licensed producer in this manner; a designated producer is not permitted to register for starting materials. This allows the registered person to have an active role in choosing the strain(s) of marihuana to use for medical purposes. A registered person can purchase seeds or plants from a licensed producer up to a maximum quantity that, taking into account the fact that three marihuana seeds are equivalent to one plant, does not exceed the equivalent of the maximum number of marihuana plants authorized. It is expected that starting materials would be required at the outset of a person’s registration; however, there is not a limit to the number of times a person can purchase starting materials to account for the potential of crop failure. Interim supply Until such time when usable product is available (i.e. when plants are ready for harvest) or in the absence of sufficient harvest (e.g. due to crop failure), a registered person has the option of seeking an interim supply from a licensed producer. Licensed producers are permitted to register clients using the registration certificate issued by Health Canada in place of a medical document to accommodate registered persons obtaining an interim supply of fresh or dried marihuana or cannabis oil until their own supply is ready. Communication of information The ACMPR include provisions that require or allow Health Canada to share information with appropriate authorities in certain circumstances. Information sharing relates to police, P/T health care licensing bodies and licensed producers. Police: Consistent with the information sharing provisions in place under the former MMAR, and in line with those for licensed producers under the former MMPR, Health Canada will share limited information with police. This includes information such as whether an individual is a registered or designated person, the address of the production site, the plant limit, the possession limit, and the storage limit. This communication of information will be restricted to the context of an active investigation under the CDSA or the ACMPR. Licensing Authorities: Consistent with Part 1 requirements for licensed producers, Health Canada is required to provide P/T health care licensing authorities with factual information about a health care practitioner that has been obtained under the CDSA, the NCR, the ACMPR, the former MMPR, or the former MMAR, when requested by a licensing authority to support a professional investigation (as per the NCR). Information sharing provisions have also been expanded from the former MMAR to enable Health Canada to proactively share information on registered persons with P/T health care licensing authorities. Licensed Producers: Health Canada is also authorized to communicate with licensed producers in the event that a registration with the Minister under Part 2 is cancelled. If Health Canada is aware that a registration certificate has been submitted to a licensed producer, and is subsequently cancelled, Health Canada must notify the licensed producer of the cancellation and provide limited, relevant information. Transitional provisions Transitional provisions allow licensed producers to continue to operate with licences and permits issued under the former MMPR until they expire or are revoked. This includes supplementary licences that permit the production and sale of cannabis oil or fresh marihuana, as well as import or export permits. Transitional provisions also provide that licence and permit applications submitted under the former MMPR and in respect of which the Minister has not made a decision to approve or refuse the application before the coming into force of the ACMPR will be processed under the ACMPR. Security clearances granted under the MMPR remain valid until they expire or are cancelled. Transitional provisions also provide for the continued validity of client registrations by licensed producers under the former MMPR, until they expire or are cancelled. Transitional provisions also enable licensed producers, who were authorized to sell or provide dried marihuana under the former MMPR, to sell or provide seeds and plants to a client registered on the basis of a registration with the Minister under Part 2 until the earlier of six months following the coming into force of the regulations or the expiry, suspension, or revocation of the producer’s licence, after which time the sale or provision of seeds and plants will have to be authorized by the producer’s licence. Licensed producers also have six months to comply with the packaging and labelling requirements of the ACMPR. Consequential amendments The FDA and its regulations provide a framework to regulate the safety, efficacy, and quality of drugs. Cannabis for medical purposes meets the definition of a “drug” under the FDA. The sale of a drug in Canada must comply with the FDA and its regulations. The Cannabis Exemption (Food and Drugs Act) Regulations, which replace the Marihuana Exemption (Food and Drugs Act) Regulations, exempt cannabis produced by licensed producers or designated persons, or marihuana that is imported or exported by licensed producers in accordance with the ACMPR, from application of the FDR. For example, cannabis that is produced and sold by a licensed producer or by a designated producer in accordance with the ACMPR does not have to undergo the market authorization process in Canada before it is produced and sold in Canada. Cannabis that is sold or marihuana that is imported, including by a licensed producer, to be used in clinical trials will continue to be subject to the FDR. The FDA continues to apply to all cannabis produced, sold, imported, or exported under the ACMPR (e.g. the FDA require that cannabis be produced in sanitary conditions, and provides the Minister of Health with the power to order a recall). Consequential amendments have also been made to the NCR and the New Classes of Practitioners Regulations (e.g. definitions for new items — “fresh marihuana,” “cannabis oil,” “former MMPR” and “former MMAR” — have been added, and product scope expanded beyond dried marihuana to include fresh marihuana and cannabis oil where applicable). The MMPR are repealed on the coming into force of the ACMPR. Regulatory and non-regulatory options considered Non-regulatory options were not considered feasible. Not responding with new regulations within the timeline mandated by the court would leave individuals with a need for cannabis for medical purposes without lawful access. Further, there would be no legal framework to authorize the commercial production and sale of quality-controlled cannabis for medical purposes, creating health, safety, and security risks to those who would be forced to purchase cannabis from unregulated sources. Given the nature of the court ruling, and the compressed timeline, the only feasible way to address the issue of reasonable access is through the reintroduction of personal and designated production per the former regime under the MMAR, in addition to preserving the current commercial regime. It should be noted that consideration was given to enabling pharmacy distribution of cannabis. However, the pharmacy distribution approach on its own would not address the issue of reasonable access to cannabis for medical purposes. The standard mark-up applied to prescription medication may be applied, as well as the additional dispensing fees, potentially resulting in higher costs compared to personal and designated production. Further, even if enabled at the federal level, it would likely require regulatory changes in all provinces and territories in order for countrywide access to be implemented. The timeline imposed did not permit such an approach; however, this option could be considered in the future. Benefits and costs Baseline scenario The system of licensed producers who are authorized to produce and sell fresh and dried marihuana and cannabis oil to clients who have registered with the support of a health care practitioner was established by virtue of the former MMPR. The vast majority of the regulatory requirements relating to commercial production and distribution by licensed producers remain the same under the ACMPR. Licensed producers are subject to various administrative and compliance costs in order to ensure the quality of cannabis sold and to reduce risks of diversion, but they also benefit from the opportunity to participate in the business of providing cannabis for medical purposes directly to eligible consumers. They are free to compete within the bounds of the Regulations and grow their client base. A full cost benefit analysis was prepared at the time the MMPR were introduced. Health Canada costs to administer the MMPR in 2015–2016 were approximately $9.9 million. In addition to licensed producers, an estimated 28 000 individuals are permitted to possess and produce marihuana (dried marihuana and plants) under the terms and conditions of the former MMAR by virtue of an injunction issued by the Federal Court of Canada in Allard v. Canada. This injunction remains in effect until the Federal Court of Canada orders otherwise. The only ongoing administrative cost associated with this group is incurred by Health Canada and factored into the costs described above. That is, Health Canada operates a general information call centre and a police line, which allows the police to inquire about authorizations and licenses issued under the former MMAR, which may still be valid under the injunction. Costs and benefits described herein are incremental to the baseline described above. There are three primary groups who will be impacted by the introduction of the ACMPR: Canadians who need cannabis for medical purposes, licensed producers, and Health Canada. Canadians who need cannabis for medical purposes It is anticipated that this regulatory regime will provide a benefit to Canadians who need cannabis for medical purposes by reintroducing two additional means of access: personal and designated production. This will permit Canadians to decide which form of access best accommodates their personal situation, whether by cost or convenience. While establishing a personal or designated source of cannabis would involve some start-up costs (e.g. registration with Health Canada and purchase of starting materials), this sourcing will be an option offered to Canadians. Those who have continued personal and designated production under the terms of a court injunction would have the opportunity to obtain a medical document from a supporting health care practitioner and register under the ACMPR. This is no different than someone seeking to access cannabis for the first time or a client of a licensed producer wishing to switch sources. There are no incremental impacts on this group. The introduction of this regulatory regime will provide a benefit to those who have continued personal and designated production under the terms of a court injunction, as it will allow them to produce at a new location. Notably, this will allow these individuals to register with the Minister of Health under Part 2 of the ACMPR to produce cannabis at a new site, as changes to any MMAR licences are not permitted given the repeal of the MMAR. It should also be noted that there are no incremental impacts on those who accessed cannabis from licensed producers under the former MMPR and who continue to do so under the ACMPR. Licensed producers Incremental costs include minor administrative changes as well as changes to the labelling requirements, which build on practices and processes or equipment that licensed producers already have or use and are not expected to result in significant costs. In addition, incremental costs are expected to be offset by new revenue potential provided through the ACMPR. The packaging and labelling requirements are anticipated to require the most involved change; however, based on observations of licensed producer packaging and labelling practices, it is not anticipated to have significant cost impacts, and licensed producers will have six months to comply with these requirements. If licensed producers also choose to produce cannabis oil in capsules or similar dosage forms intended for ingestion, they will have to conduct disintegration testing. This will also result in a minor incremental cost. Under the ACMPR, licensed producers will be able to sell seeds and plants (i.e. starting materials). Although there are administrative requirements associated with recordkeeping and reporting, similar to those of the other products sold under the ACMPR, licensed producers will also generate profit from the expanded scope of sales permitted. Licensed producers will not be compelled to participate in these business lines (e.g. sale of starting materials), so it will be a business decision for each licensed producer as to whether to incur the initial costs to establish these product lines. The ACMPR are also anticipated to have incremental benefits for licensed producers, including a streamlined approach to licensing by allowing for a single application to address the production and sale of fresh and dried marihuana, cannabis oil, and marihuana seeds and plants (i.e. eliminating the need for a supplemental application for cannabis oil and fresh marihuana). In addition, licensed producers will no longer be required to verify medical documents (i.e. make phone calls to all health care practitioner offices), where the signature of the health care practitioner is known to the producer. Licensed producers have expressed little concern with the financial impact associated with the reintroduction of personal and designated production. Since the introduction of the MMPR, the market for marihuana for medical purposes has included a segment that is sourced by personal production (i.e. Allard injunction holders). Therefore, allowing for more personal and designated production is not anticipated to have a significant impact on the market, including those licensed producers which are small businesses. Given that it is not known when the injunction will be lifted or how many Canadians will be interested in registering under the ACMPR or the timing for their registration, it is not possible to quantify this impact at this time. Health Canada As the number of participants under the former MMAR grew, Health Canada’s administrative costs increased to almost $25 million annually (including salary, operating and management expenses, and supply contract) by the time the MMAR were repealed. It is expected that the Health Canada administrative costs for the ACMPR will be significantly less. The rate at which the number of participants in the personal and designated production program increases is expected be slower than the rate under the former MMAR since individuals will also be able to access cannabis through licensed producers. In addition, Health Canada will not supply cannabis or starting materials. Costs of approximately $1.5 million (see footnote 5) in the first fiscal year (2016–2017) are expected, in order to address administrative start-up costs and operating costs, assuming 20 000 Canadians seek to register in the first year. It is expected that uptake will be gradual, considering the need for a medical document for registration and the possible continued existence of the injunction. An annualized average cost of approximately $3.4 million PV is expected. Costs will be driven by registration uptake, and have been estimated based on the entry of approximately 20 000 individuals in the first fiscal year, the entry of injunction holders in early 2017–2018 (pending lifting of injunction), and a 9% growth rate thereafter, consistent with what has been seen with the licensed producer client registrations. Costs are dependent on, and may vary according to, the volume of applications received. With the unpredictable nature of a reactive program and significant change in the realm of cannabis over the coming years, specifically marihuana legalization, it is difficult to predict volume trends, especially in the longer term. Ongoing administrative costs will include functions such as processing registration applications, annual renewals, and amendments; conducting verifications and providing information to licensed producers; preparation of data for health care licensing bodies; responding to police requests; and operating a client-service program, including a call centre and correspondence services. Cost-benefit statement This table presents the Cost-benefit Statement. Base Year (2016) Final Year (2026) Total (PV) Annualized Average A. Quantified impacts (in CAN$, 2016 price level / constant dollars) (see note *) A. Quantified impacts (in CAN$, 2016 price level / constant dollars) (see note *) A. Quantified impacts (in CAN$, 2016 price level / constant dollars) (see note *) A. Quantified impacts (in CAN$, 2016 price level / constant dollars) (see note *) A. Quantified impacts (in CAN$, 2016 price level / constant dollars) (see note *) Costs for Health Canada $1,495,327 $1,880,892 $24,024,635 $3,420,567 B. Qualitative impacts B. Qualitative impacts B. Qualitative impacts B. Qualitative impacts B. Qualitative impacts Individuals who need cannabis for medical purposes (positive): Reintroduction of two additional means to access cannabis (personal and designated production). Those who have continued personal and designated production under the terms of the Allard injunction are allowed to apply to register to produce at a new location. No fees are charged in registering with Health Canada. Individuals who need cannabis for medical purposes (positive): Reintroduction of two additional means to access cannabis (personal and designated production). Those who have continued personal and designated production under the terms of the Allard injunction are allowed to apply to register to produce at a new location. No fees are charged in registering with Health Canada. Individuals who need cannabis for medical purposes (positive): Reintroduction of two additional means to access cannabis (personal and designated production). Those who have continued personal and designated production under the terms of the Allard injunction are allowed to apply to register to produce at a new location. No fees are charged in registering with Health Canada. Individuals who need cannabis for medical purposes (positive): Reintroduction of two additional means to access cannabis (personal and designated production). Those who have continued personal and designated production under the terms of the Allard injunction are allowed to apply to register to produce at a new location. No fees are charged in registering with Health Canada. Individuals who need cannabis for medical purposes (positive): Reintroduction of two additional means to access cannabis (personal and designated production). Those who have continued personal and designated production under the terms of the Allard injunction are allowed to apply to register to produce at a new location. No fees are charged in registering with Health Canada. Individuals who need cannabis for medical purposes (negative): Start-up costs to begin personal or designated production (registration with Health Canada and purchase of starting materials). Individuals who need cannabis for medical purposes (negative): Start-up costs to begin personal or designated production (registration with Health Canada and purchase of starting materials). Individuals who need cannabis for medical purposes (negative): Start-up costs to begin personal or designated production (registration with Health Canada and purchase of starting materials). Individuals who need cannabis for medical purposes (negative): Start-up costs to begin personal or designated production (registration with Health Canada and purchase of starting materials). Individuals who need cannabis for medical purposes (negative): Start-up costs to begin personal or designated production (registration with Health Canada and purchase of starting materials). Licensed producers (positive): New ability to sell seeds and plants to individuals for personal or designated production (starting materials). A single application to address the production and sale of fresh and dried marihuana, cannabis oil, and marihuana seeds and plants (i.e. eliminating the need for a supplemental application for cannabis oil and fresh marihuana). Reduced administrative costs as a result of a streamlined approach to the verification of medical documents that is now harmonized with requirements that apply to prescriptions for narcotics. Licensed producers (positive): New ability to sell seeds and plants to individuals for personal or designated production (starting materials). A single application to address the production and sale of fresh and dried marihuana, cannabis oil, and marihuana seeds and plants (i.e. eliminating the need for a supplemental application for cannabis oil and fresh marihuana). Reduced administrative costs as a result of a streamlined approach to the verification of medical documents that is now harmonized with requirements that apply to prescriptions for narcotics. Licensed producers (positive): New ability to sell seeds and plants to individuals for personal or designated production (starting materials). A single application to address the production and sale of fresh and dried marihuana, cannabis oil, and marihuana seeds and plants (i.e. eliminating the need for a supplemental application for cannabis oil and fresh marihuana). Reduced administrative costs as a result of a streamlined approach to the verification of medical documents that is now harmonized with requirements that apply to prescriptions for narcotics. Licensed producers (positive): New ability to sell seeds and plants to individuals for personal or designated production (starting materials). A single application to address the production and sale of fresh and dried marihuana, cannabis oil, and marihuana seeds and plants (i.e. eliminating the need for a supplemental application for cannabis oil and fresh marihuana). Reduced administrative costs as a result of a streamlined approach to the verification of medical documents that is now harmonized with requirements that apply to prescriptions for narcotics. Licensed producers (positive): New ability to sell seeds and plants to individuals for personal or designated production (starting materials). A single application to address the production and sale of fresh and dried marihuana, cannabis oil, and marihuana seeds and plants (i.e. eliminating the need for a supplemental application for cannabis oil and fresh marihuana). Reduced administrative costs as a result of a streamlined approach to the verification of medical documents that is now harmonized with requirements that apply to prescriptions for narcotics. Licensed producers (negative): Minor administrative changes as well as changes to the labelling and packaging requirements. Some minor potential loss of client base for those who wish to produce their own marihuana. Licensed producers (negative): Minor administrative changes as well as changes to the labelling and packaging requirements. Some minor potential loss of client base for those who wish to produce their own marihuana. Licensed producers (negative): Minor administrative changes as well as changes to the labelling and packaging requirements. Some minor potential loss of client base for those who wish to produce their own marihuana. Licensed producers (negative): Minor administrative changes as well as changes to the labelling and packaging requirements. Some minor potential loss of client base for those who wish to produce their own marihuana. Licensed producers (negative): Minor administrative changes as well as changes to the labelling and packaging requirements. Some minor potential loss of client base for those who wish to produce their own marihuana. Health Canada (positive): Administrative costs for the ACMPR will be significantly less than those under the former MMAR given that the rate of increase for personal and designated production is expected to be slower than the rate under the former MMAR. This is because individuals will also be able to access cannabis through licensed producers. Further, Health Canada will not supply cannabis. Health Canada (positive): Administrative costs for the ACMPR will be significantly less than those under the former MMAR given that the rate of increase for personal and designated production is expected to be slower than the rate under the former MMAR. This is because individuals will also be able to access cannabis through licensed producers. Further, Health Canada will not supply cannabis. Health Canada (positive): Administrative costs for the ACMPR will be significantly less than those under the former MMAR given that the rate of increase for personal and designated production is expected to be slower than the rate under the former MMAR. This is because individuals will also be able to access cannabis through licensed producers. Further, Health Canada will not supply cannabis. Health Canada (positive): Administrative costs for the ACMPR will be significantly less than those under the former MMAR given that the rate of increase for personal and designated production is expected to be slower than the rate under the former MMAR. This is because individuals will also be able to access cannabis through licensed producers. Further, Health Canada will not supply cannabis. Health Canada (positive): Administrative costs for the ACMPR will be significantly less than those under the former MMAR given that the rate of increase for personal and designated production is expected to be slower than the rate under the former MMAR. This is because individuals will also be able to access cannabis through licensed producers. Further, Health Canada will not supply cannabis. Note * Costs have been discounted using a 7% discount rate to estimate present value beginning in 2016. “One-for-One” Rule The “One-for-One” Rule applies to the ACMPR; however, they are exempted from its application because they are implementing non-discretionary obligations flowing from the Federal Court of Canada’s decision in Allard v. Canada. The Federal Court of Canada found the MMPR unconstitutional, and the Government was given six months from the date of the decision — until August 24, 2016 — to implement new regulations that provide reasonable access to cannabis for medical purposes. The “One-for-One” Rule does not apply to the Cannabis Exemption (Food and Drugs Act) Regulations, as the amendments to these Regulations do not result in any change in administrative burden on business. Small business lens The incremental costs are estimated to be less than $1 million on small business; therefore, the small business lens does not apply to this proposal. Consultation Given the compressed timeline and the potential consequences of not implementing regulations by August 24, 2016, opportunities for formal consultation were limited. The ACMPR substantively incorporate the provisions established under the former MMPR for the commercial industry and the personal and designated production framework as per the former MMAR. Stakeholders had the chance to provide feedback on these frameworks when they were published previously, including through the two-year consultation process that led to the publication of the MMPR in 2013. Deviations from these frameworks are minimal, except where required to respond to decisions from the courts. Prior to implementation, Health Canada conducted targeted engagement with other government departments and agencies (Public Safety Canada, Justice Canada, Royal Canadian Mounted Police, Veterans Affairs Canada, and Global Affairs Canada). The government departments and agencies emphasized the need for ongoing collaboration to implement the ACMPR. Licensed producers were also engaged regarding certain policy aspects of personal and designated production, and how the commercial industry could operate alongside a personal and designated production regime. Rationale The Federal Court of Canada’s finding of unconstitutionality of the MMPR related to the problems of affordability and availability, which are aspects of reasonable access. Given the nature of the court ruling, and the compressed timeline, the only feasible way to address the issue of reasonable access is through the reintroduction of personal and designated production, in addition to preserving the current commercial production and distribution regime (which serves to reduce risks to public health, security, and safety of Canadians, while providing access to quality-controlled cannabis for medical purposes). The ACMPR provide reasonable access by enabling individuals who have the support of their health care practitioner to access cannabis for medical purposes through three access points: commercial licensed producers, personal production, or designated production. Retaining the elements of the former MMPR allows for the continuation of the current industry, which provides for uninterrupted production and supply for the approximately 70 000 individuals sourced by licensed producers. The ACMPR also incorporate provisions to allow for the production and possession of cannabis in forms other than dried, further to the June 2015 SCC decision in R. v. Smith. Implementation, enforcement and service standards The MMPR are repealed and the ACMPR come into force on August 24, 2016. It is Health Canada’s intention that the transition between these regulatory regimes be seamless. Licensed producer applications submitted under the former MMPR will retain their place in the review process and will be processed under the ACMPR. Further, applicants for production licences will be offered the opportunity to update their applications to add new activities with substances other than dried marihuana. Licensing and inspections of commercial producers will continue as under the former MMPR. Limited modifications to processes and procedures will be necessary. Health Canada will allow for the receipt of registration applications for personal and designated production from the date on which the ACMPR come into force. Service standards for the processing of these applications will be established as the regime becomes operational. Infrastructure and human resource requirements to operationalize the ACMPR regime were put in place over the summer of 2016 in order to enable immediate implementation. For example, Health Canada has implemented an IT system for managing applications and generating registration certificates. Health Canada has also established a program unit dedicated to administering the personal and designated production elements of the ACMPR. In addition, application forms and operational guidance are available for clients and licensed producers on the Health Canada Web site. Contact Office of Medical Cannabis Health Canada Ottawa, Ontario Address Locator: 0302B K1A 0K9 Email: [email protected] Footnote a S.C. 1996. c. 19 Footnote b S.C. 2015, c. 22, s. 4(1) Footnote c S.C. 1996. c. 19 Footnote 1 C.R.C., c. 1041 Footnote 2 SOR/2012-230 Footnote 3 SOR/2013-119 Footnote 4 Note: THC-Acid is a non-psychoactive cannabinoid found in raw and live cannabis. When exposed to processes such as drying and heating, THC-Acid changes to psychoactive THC. Under these conditions, CBD-Acid is also converted to CBD. Footnote 5 Note: Costs include salary, operating and management expenses, employee benefit plan costs, accommodation costs, and corporate (internal services) costs, and are present value costs as of 2016–2017.

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