Is medical pot getting short shrift?
Legalization of recreational marijuana has put its prescribed counterpart on back burner
Canada is riding high when it comes to cannabis. By next summer, the country could be the first G7 economy to have legalized recreational marijuana, creating an all-new industry expected to generate billions of dollars in cash for companies and government coffers.
But while pot smokers and the companies that will serve them celebrate, the concerns of the medical marijuana industry seem to be getting short shrift.
For one thing, the federal government in November proposed to subject medical cannabis to the same excise tax — or “sin tax,” as some refer to it — as its recreational cousin. The mere prospect of a medicinal marijuana tax has been taken as a slight against the drug ’s therapeutic properties, since critics note that other medicines are not subject to such a charge.
“The taxation proposal clearly illustrates the government is not taking cannabis seriously as a medicine,” said Jonathan Zaid, founder and executive director of Canadians For Fair Access to Medical Marijuana, a national nonprofit organization. “Patients are already facing affordability challenges and this tax is really going to compound barriers to access for patients across the country.”
Canada, understandably, is paying more attention now to recreational cannabis than its existing medical regime, but it is doing so at a sensitive time for the latter, as the tax brouhaha demonstrate.
The number of clients signing up to receive medical cannabis has exploded to more than 200,000, but doctors remain hesitant to prescribe cannabis.
There are high expectations for demand and the amount of money the medical sector will be worth — even after the recreational market opens — and the current regime also remains ripe for some innovation, since patients still receive the product via mail.
Mackie Research Capital in September estimated that the number of registered marijuana patients would hit 630,000 people — or approximately 1.7 per cent of the population — by 2024. With that many potential customers, Mackie projected the value of the medical market would be between $1.9 billion and $2.6 billion.
“The nice thing is that I think the medical market will continue to be the most valuable market because of the direct relationship between producer and patient, or customer,” said Chuck Rifici, chairman and chief executive of Cannabis Wheaton Income Corp., which helps fledgling pot producers with financing.
“There is no way for provincial or for any level of government to intermediate themselves into that medical relationship between producer and customer.”
But PwC said in a report earlier this year that some industry stakeholders felt the federal government’s “tight time frame” for recreational legalization would lead to a lack of consultation and the potential to miss the opportunity to right the medical regime.
“Because decision-makers will have so little time for regulatory development, the focus will be exclusively on recreational cannabis, to the detriment of changes that may be required for medical cannabis,” PwC warned, adding that changes to the medical regime could be as far away as three years as a result.
One outstanding problem is that doctors may still be hesitant to prescribe cannabis to their patients, creating a bottleneck in the system for both patients and producers.
“This incarnation of the medical cannabis market in Canada came about about four years ago,” said Neil Closner, chief executive of Markham, Ont.-based medical marijuana producer MedReleaf Corp. “And the single biggest challenge that patients and physicians have been encountering is actually obtaining a medical document, or from the physicians’ side, understanding or becoming comfortable with how to prescribe.”
Some of the discomfort physicians may have with prescribing pot was touched on by Dr. Shawn Whatley, president of the Ontario Medical Association, which represents the province’s 30,000 doctors, during his testimony at a provincial legislature’s justice committee in November.
“There is a need for more research on cannabis and at this time there is a gap in knowledge,” he said. “When considering medical cannabis, it is critical to emphasize that physicians receive requests from patients for prescriptions. Given the lack of evidence and knowledge around dosing, drug interactions and the prescription process, this puts many docs in a very difficult position.”
Patients are also upset with the federal government’s proposal to levy an excise tax on all forms of cannabis.
Canadians For Fair Access to Medical Marijuana has launched a campaign it hopes will stop Ottawa from slapping a sin tax on medical cannabis, which has prompted more than 12,000 patients to send letters to their Member of Parliament.
All prescription medications in Canada are “zero-rated,” Zaid said, meaning they have no sales or excise tax on them.
“And that’s a smart policy approach to taxing medicine,” he said. “The purpose is to make it accessible for those who medically need it, whereas the purpose of a sin, or excise, tax, is to reduce consumption and limit access and that’s fundamentally not what the government should be doing when it comes to medical cannabis access.”
Twelve different health-related organizations — including Canadians for Fair Access to Medical Marijuana, as well as the Arthritis Society, Canadian AIDS Society and Cardiac Health Foundation — sent a letter calling for medical cannabis to be zero-rated on Dec. 7 to the federal government as it consults the proposed excise tax.
“In combination with severely limited insurance coverage and the application of sales tax, the affordability of cannabis for medical purposes is already pushing Canadians to make excruciating decisions about their health,” the letter said.
But perceptions may have already begun to shift in a favourable direction for medical marijuana, something that may be helped along by the legalization of its recreational cousin.
“Now that recreational is coming, it’s almost widely accepted now, ‘Oh yeah, medical cannabis, everyone knows about that, everyone’s using it, it’s out there,’” Closner said.
Saskatoon-based CanniMed Therapeutics Inc. commissioned two studies of doctors’ attitudes and behaviours toward medical cannabis in 2014 and 2016, finding that the results suggested “a shift in attitudes and prescribing practices among Canadian physicians.”
The percentage of doctors willing to prescribe cannabis rose to 21 per cent from 12 per cent, according to Mackie Research.
To put physicians more at ease around cannabis, MedReleaf in November said it was introducing a “groundbreaking, patent-pending” genetic test called ReleafDx.
The test starts with a cheek swab at a doctors’ office that gets analyzed by LabCorp-owned Dynacare, which then sends information back to the physician on what sort of dosage and cannabis product would be appropriate for that patient.
The methods by which patients can actually buy medical marijuana could be ripe for change as well. Under current rules, medical cannabis can only be distributed to patients through the mail.
Meanwhile, provinces are preparing varying combinations of retail systems for recreational marijuana, but customers will likely be able to purchase both in-store and online.
One proposed avenue for expanding retail sales of medical marijuana is through drugstores. Shoppers Drug Mart Corp., Canada’s largest pharmacy chain, made waves in December when it was announced a medical cannabis supply agreement with Leamington, Ont.-based Aphria Inc.
Allan Malek, executive vicepresident and chief pharmacy officer at the Ontario Pharmacists Association, said his group, which lobbies on behalf of the drugstores, is “basically saying pharmacies are the most logical location for medicinal cannabis to be distributed.”
Malek said it could be argued that discussions around reforming the medicinal cannabis system should have come before legalizing the drug for recreational purposes.
“If you’re defining first what the recreational space is going to look like, and you’ve got people who are suffering from many of these conditions that could be treated medicinally, you’ve got people who are going to start self-medicating,” he said.
The federal government’s cannabis consultation paper suggests some tweaks to the medical system. One potential change is eliminating a rule that blocks licensed sellers from filling multiple orders within a month that would provide a client with more than a month’s supply of cannabis.
The medical marijuana system and its patients may eventually get the change they need. Rifici noted the foundations of the system are built on a very one-sided legal battle between patients and governments, with the latter always losing.
“The regulatory evolution on the medical side has certainly slowed down, some would say far more than it should,” he added. “We’ll see a balancing effect post-legalization.”
I think the medical market will continue to be the most valuable market because of the direct relationship between producer and patient, or customer. CHUCK RIFICI, Chairman and CEO Cannabis Wheaton Income Corp.