Ready to roll

July 11, 2014
Written by
Only a little while ago, not many of us had heard the phrase “biopharmaceutical industry,” and still fewer would have guessed that it was poised to become a billion-dollar behemoth.

crop at MediJean  
A young crop at MediJean. PHOTO COURTESY MEDIJEAN

 
But it’s indeed expected to become just that – and in Canada, a lot of the sector’s projected growth is thanks to changes in federal medical marijuana legislation.

Back in 2001, “Marijuana Medical Access Regulations” (MMAR) allowed patients, with their doctors’ support, to apply directly to Health Canada to grow their own marijuana plants. They could also become authorized producers to grow for up to four other people.

However, under the new “Marijuana for Medical Purposes Regulations” (MMPR) that came into effect at the start of April 2014, only producers licensed by Health Canada can grow and sell. A patient with a prescription from his or her doctor can fill it through one of these licensed outlets, with delivery mostly by courier.

PREVIOUS LEGISLATION WASN’T WORKING
The legislation change was a move that recognized the MMAR system wasn’t working. In 2001, there were about 500 authorized MMAR growers. That had grown to more than 30,000 by 2013, and production in neighbourhood homes was becoming a concern in terms of violence and other factors. Under the new system, municipal zoning laws ensure that growing operations are not located in residential areas, a relief for many.

It’s expected that most of these patients will make the shift to buy from an MMPR producer.

Let’s look at the overall market potential numbers. Some experts suggest the number of medical users could grow substantially over the next decade, perhaps to about 500,000 people

Health Canada estimates that a typical patient uses 30 grams or more of medicinal marijuana per month, and with a current market price of $6 to $12 a gram, that’s at least $180 a month per patient, or about $2,200 a year. If there are 500,000 users, that’s over a billion dollars a year, just in Canada.

EYEING THE NEED FOR 200 FACILITIES
Many experts say that since each production facility can likely produce only enough to supply 2,000 patients a year, well over 200 Canadian facilities will need to be licenced. It’s expected that between 25 and 30 will get the “green light” by 2015, with about a dozen already approved by May 2014.

In terms of export – well, the sky might be the limit.

Under MMPR, licenced producers can apply for a licence to sell to any country that has a regulated medical marijuana program and good diplomatic relations with Canada.

While possession of marijuana is still illegal in the U.S., several states have approved the medicinal use of the plant, and Colorado now allows residents to purchase it for recreational use.

However, MMPR allows importing as well, which could mean marijuana coming into Canada at a lower cost from jurisdictions where production is cheaper.

Flowers Canada Growers (FCG) has looked into this emerging crop and communicated with Health Canada about it. In a review of the situation, FCG determined that the medical marijuana industry is quite different from the flower-growing industry and the association will not be involved going forward, says FCG Pesticide and Minor Use director Cary Gates.

In the FCG review, the market potential of medical marijuana is characterized as somewhat limited for several reasons.

“By our estimation, single growers could easily produce thousands of kilograms of product … and if many growers become licensed, the competition could be fierce,” Gates explains.

“Furthermore, the cost of entry to this industry is high,” he adds. “The security requirements, quality assurance needs, the ability to process and ship orders requires considerable capital investment that many farmers simply do not have access to.”

THIRD-PARTY TESTING WILL BE REQUIRED
Licenced growers have to have a dedicated quality assurance person on staff and have third-party testing for things like bacteria, fungus, mould or chemical residue. Gamma radiation can be used to get rid of fungus or bacteria in failed batches, and they can then be re-submitted for testing.

Michael Camplin  
GGS sales manager Michael Camplin in a greenhouse under the MMAR program. GGS is working with a number of growers to help them comply with the new MMPR regulations.
PHOTO COURTESY GGS


 
When asked for his opinion on how both quality and security is best achieved, University of British Columbia business professor Werner Antweiler says licencing large producers with significant resources is the best way forward.

Flowers Canada Growers and others also have concerns about patient access. That is, they think patients might face doctors uncomfortable with prescribing pot. Indeed, the Canadian Medical Association has stated very publically that most physicians have little training with how much to prescribe or the differences between strains.

At least one industry player, MediJean in Richmond, B.C., is filling this gap. The company is doing doctor education and has also built a brilliant software system being tested in a clinical trial. The software allows a doctor to see what strain and dose other doctors are prescribing for patients with particular ailments and symptoms, with the doctors’ and patients’ names kept anonymous.

LOCATION, LOCATION, LOCATION
There has been a very wide range of responses from Canadian municipalities to the idea of local medical marijuana production. Some communities, such as Abbotsford and Langley B.C., have passed bylaws completely banning medical marijuana production. MediJean only got its approval after months of discussion.

Others welcome the idea. Indeed, municipal leaders in Lakeshore, Ont., where the downturn in auto manufacturing has led to economic hardship, actively recruited a medical marijuana producer as soon as MMPR was in place. Michigan-based CEN Biotech is now building a $12-million facility within sight of the community’s police station, with jobs and tax revenue on the way.

No matter where it’s located, obtaining an MMPR licence is a matter of building a facility ready for inspection. Tight security with cameras and much more is a must.

Tweed Inc. of Smith Falls, Ont., already has a licence at its facility in the town’s former Hershey chocolate factory. ECGreen is setting up in an industrial building in Oldcastle, Ont., with Agrima Botanicals doing the same in former horse stables in Maple Ridge, B.C. MediJean in Richmond is located in a former fish processing plant.

As of late May, Supreme Pharmaceuticals was close to acquiring a 342,000-square-foot greenhouse in southern Ontario for medical marijuana production.

BEST PRACTICES
Growing the crop in a greenhouse or a warehouse presents a few different challenges. For example, GGS Structures in Vineland, Ont., which has been designing, manufacturing and installing commercial greenhouses since 1979, gets inquiries from licensed facilities as well as applicants with both greenhouse and enclosed-building set-ups. For those who have not decided, the company offers an evaluation system in order to recommend whether greenhouse-growing or warehouse-growing would be best.

Agrima Botanicals’  
Agrima Botanicals’ state-of-the-art facility is purpose-built from the ground up and uses deep water culture.
PHOTO COURTESY
AGRIMA BOTANICALS


 
Greenhouses obviously provide an advantage through all the natural light, but they are also likely to be more costly to heat and keep secure, and high-intensity supplemental grow lights will be needed for maximum marijuana yield.

With regards to overall light choice, GGS owner Leigh Coulter says, “currently, high pressure sodium and metal halides are the most popular. We are testing LED lights with some growers and the results are promising. It is all a matter of return on investment.”

Coulter also notes that while cannabis likes long, bright days during the vegetative stage, a good blackout system is a must for flowering.

“Twelve hours of darkness seems to be the rule,” she says. “You need blackout totally enclosing the flowering rooms. Visible light can set the plants back into the vegetative phase. Like any other greenhouse crop, knowing your crop is an essential requirement to producing high quality.”

Ventilation needs in a warehouse are also significantly different than the ventilation needs in a greenhouse, Coulter explains. “Under Health Canada rules, we also have to make sure there are no odours escaping from the facility,” she adds, “so special filters or scrubbers need to be part of the system and this factors into ventilation design.”

Marijuana can be grown hydroponically or grown in soil with drip irrigation systems. GGS recommends that growers start with the system they are most comfortable with. Coulter says it’s all about designing a system to maintain the exact environment needed for as many different growing zones required (propagation, cloning, flowering) and for as many different varieties as desired.

As with any new sector, Canadians are likely to see more growing pains within medical marijuana production, whether it’s issues with quality, security, access or other things. But it’s a brand-new horticultural sector – with what some would consider excellent potential for profit, job creation and even the possibility of large-scale export.

One thing’s for sure – many out there have been waiting for the new regulations to be put in place, and growing for this new market is a challenge too enticing for some to resist.

FOR MORE INFORMATION
Grower’s learning centre – http://medicalmarijuana.ca/learning-centre.

Canada’s first certified organic pot – http://www.islandharvest.ca/organic.html

Avoiding big mistakes – http://ggs-greenhouse.com/blog/5-biggest-mistakes-medical-marijuana-growers-make-when-setting-growing-facility.


Treena Hein is freelance writer in Ontario.

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