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Pharmacies grapple with medical marijuana sales rules

E-commerce is the only avenue available for drug stores to sell cannabis to authorized users
Shoppers Drug Mart has applied to Health Canada to become a licensed producer of cannabis – something that would enable it to buy and resell medical marijuana | Rob Kruyt

The Canadian Medical Association is questioning why there needs to be a separate medical marijuana distribution stream, but that is not stopping Canadian pharmacies from exploring ways to sell medical marijuana to authorized users in the lead-up to the October 17 legalization of countrywide recreational cannabis sales.

Shoppers Drug Mart has applied to Health Canada to become licensed as a producer of cannabis even though the drug store chain does not intend to grow marijuana. Instead, it plans to buy marijuana products manufactured by other licensed producers and to resell those items online to authorized medical users. The chain has signed agreements with producers such as Tilray Inc. (Nasdaq:TLRY), Aphria Inc. (TSX:APH) and Starseed Medicinal Inc. to supply cannabis contingent on Shoppers Drug Mart getting approved as a licensed producer.

Pharmacies are taking steps to sell directly to authorized patients via e-commerce because it is the only legal avenue open to them for conducting cannabis sales. B.C. regulations will restrict privately run cannabis stores from selling any non-cannabis-related items, such as snacks or paper towels.

“Whilst 99% of the licensed producers are growing cannabis, there is no absolute need [for licensed producers] to grow cannabis,” said Deepak Anand, Cannabis Compliance Inc. vice-president of business development and government relations.

He pointed to the example of Namaste Technologies’ subsidiary CannMart Inc., which Health Canada approved as a licensed producer and which has a business model focused on buying cannabis products and reselling those items online to authorized medical users.

Chris Chiew, London Drugs’ general manager of pharmacy, told Business in Vancouver that his drug store chain is reviewing whether to apply to become a licensed producer.

“Our goal is to continue to advocate to the government and provincial regulatory colleges to give better access for medical cannabis patients,” he said.

Among other requests, the company is asking the federal government to change the law to allow pharmacies to dispense medical cannabis in bricks-and-mortar stores.

An early effort to help bring about regulatory change is underway in the Supreme Court of British Columbia, as the court prepares to consider a petition that may eventually compel the federal government to expand access to medical marijuana to include bricks-and-mortar locations.

“That’s the ultimate goal,” said Davison Law Group principal Dean Davison, one of the lawyers involved in the petition, which is scheduled to have a hearing on September 10.

Dozens of dispensaries launched the petition last year to challenge the City of Vancouver’s authority to regulate cannabis dispensaries, and provincial and federal attorneys general have since become participants in the action, he said.

The effort by companies to do business within the federal Access to Cannabis for Medical Purposes Regulations (ACMPR), and to push for medical-marijuana sales in physical stores, comes as critics question why any of the medical-marijuana regulations need to persist once recreational cannabis sales become legal.

The Canadian Medical Association, for example, has opposed Canada’s medical-marijuana system since the federal government first enacted a predecessor regulatory regime in 2001.

It has argued that there is a lack of scientific evidence that marijuana is effective at treating diseases, and that the law makes physicians gatekeepers of a medication without full knowledge of its effectiveness, proper dosage or side effects.

Getting rid of the ACMPR, however, would be a difficult task, according to Anand.

Court decisions through the years have supported increased access for authorized users and have forced the government to supply that access.

One decision compelled the government to allow medical users to grow their own marijuana.

Under the ACMPR, physicians issue authorizations to patients to purchase and to grow marijuana. These are not officially “prescriptions” because marijuana has no federal drug indentification number, Anand explained.

Authorizations to grow marijuana could stipulate a specific number of plants that a patient may grow. That allotment of plants would be in addition to the four-plant limit that the B.C. government has stipulated for adults growing recreational cannabis after October 17.

Another aspect of the ACMPR system is that patients authorized to grow medical marijuana may assign to a third party the right to grow their cannabis. That has led to a legal class of marijuana growers who are not licensed producers.

Anne McLellan, who chaired the federal task force on marijuana legalization and regulation, told BIV that she believes this class of grower should be eliminated.

“We heard from law enforcement and others that if there is abuse right now in the medicinal stream, it is with the designated grower,” said McLellan, who is also a former minister of justice.

“Designated growers grow beyond that which they are allowed to grow, and they are selling into the black market. That has got to stop. In our task force, we looked at medicinal [cannabis] because we were asked if it should be kept or not. We said, ‘Yes, keep it, and review it after five years. Keep it for now because too much change for the legitimate patient would be unfair.’” •

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