One Edmonton company is a step closer to being a licensed grower for the federal government’s new medical marijuana program.
Vernon Devam, president of GrenEx Pharms, said Health Canada has approved his company’s proposal to be one of the producers that will supply nearly 40,000 medical marijuana users across the country.
“I see a huge opportunity with medical marijuana,” said Devam.
Approving the paperwork is just one step in a lengthy application process, and Devam said Health Canada must still inspect and approve GrenEx’s indoor growing facility before the company gets its licence.
Devam estimated GrenEx will initially be able to handle about 1,000 clients throughout Canada via mail orders.
Previously, medical marijuana users could grow their own plants or buy from licensed, small-scale growers.
However, police, fire departments and local authorities pressured the federal government to scrap the old distribution system, saying home-based operations posed problems.
Critics said the old regime was susceptible to abuse by criminals diverting marijuana to the illegal market and that home growing operations posed health and safety risks such as faulty electrical wiring.
Health Canada has attempted to address those concerns by requiring applicants under the new program to pass criminal background checks and equip their facilities with security features such as intrusion alarms and closed-circuit surveillance.
Devam started legally cultivating marijuana under the old distribution system as a designated grower for licensed users.
The federal government has estimated the number of licensed medical marijuana users could grow to 450,000 by 2024, prompting Devam’s desire to be part of the new system.
“The market could get bigger,” he said, adding there’s also a possibility marijuana could one day be legalized and regulated for recreational use. The transition to the new medical marijuana regime takes effect April 1, and a Health Canada spokesman said this week more than 285 companies have applied.
“Take it out of the basements, where the complexities have happened,” said Stan Swiatek, whose company, Sundial Growers, has applied to grow medical marijuana in a greenhouse facility west of Airdrie.
Sundial was an established commercial cucumber grower that fell on hard times when prices dropped sharply.
Although companies have been bullish about the business opportunities, some users are concerned they won’t be able to afford their medicine once it’s sold on the open market.
Under the old system, patients unwilling or unable to grow their own supply or designate a personal grower could buy marijuana for the subsidized price of $5 a gram from Prairie Plant Systems, a Saskatoon-based company contracted by Health Canada.
A subsidiary of Prairie Plant Systems, CanniMed, was the first of three companies so far to obtain a commercial licence from Health Canada for the new distribution scheme. CanniMed plans to sell its marijuana for between $9 and $12 a gram, depending on the strain.
If GrenEx succeeds in getting its licence, the company will start by selling one strain, but Devam said he hasn’t set the price yet.
Still, he said the company will strive to be affordable for users.
“I know there’s a big fear about the price skyrocketing; however, since the costs are very low, we’ll be able to pass the savings on to people whose incomes are low,” he said. “We’re going to be responsible, as corporations should be.”
Two Ontario companies have also been approved by Health Canada.