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One of Canada’s leading cannabis producers is taking on another major cannabis market, as it seeks to grow its business while fighting a decades-old battle with federal regulators over where to locate its new production facility.
The Canadian Hemp Industries Association has filed an application with the Canadian Food Inspection Agency to start production at its current site in southern Alberta.
The industry group has a $5-million contract with the federal government to supply cannabis products to pharmacies in B.C. and Ontario.
In June, Health Canada approved a permit for its planned facility at the southern Alberta border, but in November, the government halted all production.
The Hemp Industries Act, which governs production and sales of medical and industrial cannabis, says it’s illegal to grow cannabis in a location that could pose a health or safety risk to the public.
The company says it is working with the provincial and federal governments to locate the facility and build it as quickly as possible.
The Alberta government says it wants to work with the Hemp Industries Council to ensure the facility’s location is safe and the health and safety of consumers is maintained.
It has until June 15 to make its final decision.
“This is a very significant development,” said Andrew Burtch, an industry analyst at BMO Capital Markets.
“There are a number of jurisdictions in Canada that have licensed producers of medical cannabis, but Alberta has been the exception to the rule.”
A report published in May by a panel of international experts concluded that Alberta’s decision to phase out production was a good one.
But the panel noted that it was unclear how much of the province’s $4.5-billion cannabis market was still in operation.
Alberta’s marijuana industry grew by more than 10 per cent in 2016, compared to a 12.9 per cent gain in 2015, according to the most recent Statistics Canada data.
Alberta is one of four provinces that have a growing number of legal medical marijuana producers.
In 2017, eight of the country’s 25 legal producers were in Alberta, according a Statistics Canada report.
Burtt said the Hemp Industry Council has not been granted a permit by Health Canada yet.
He said it’s unclear how the government will determine if the proposed production site in northern Alberta is suitable for production.
“They’re making it very difficult for us to make a decision because of the delay,” he said.
The provincial government says that it is committed to providing cannabis products in a safe and responsible manner.
“It is a priority for us that Alberta is a place where people can go to get medical cannabis,” said Derek Corrigan, Alberta’s minister of public health.
The hemp industry group is also pushing to establish a national registry for growers, processors and manufacturers, as well as establish a registry for recreational marijuana sales.
The new cannabis company will also need a permit to operate, which would be issued to a medical-only producer who meets the requirements of the federal law.
But Corrigan said the industry group was working on a different proposal for the proposed new facility.
“The province of Alberta is in the process of developing a regulatory framework that would ensure safe, responsible, and lawful cannabis production,” he wrote in an email.
“We are also in the midst of developing legislation to implement that framework, including a proposal to establish and enforce a regulatory regime for producers and processors.”
The new company would not have to comply with federal regulations, such as licensing, testing and labelling requirements, and would not need to pay taxes on marijuana.
But it would still be required to comply in the event of an emergency, which the Alberta government has warned could occur if cannabis production was shut down.
Health Canada has said it has no plans to make changes to the law for the new project.
“Canada will continue to be an important player in the cannabis industry and continue to support industry growth and innovation,” Health Canada spokesperson Lauren Smith said in an emailed statement.
In a report in May, the industry panel said Alberta’s policy was a mistake.
“Alberta has been a long-standing and successful producer of medical marijuana,” the panel said.
“However, its continued production of medical pot and its failure to establish regulations for production and sale of medical products has led to substantial costs and a significant public health risk.”
The Hemp Industry Act allows the production and distribution of cannabis to medical-use patients, such the use of THC-rich oils for the treatment of pain or spasticity, or THC-free extracts for medical purposes.
The act also sets limits on the amount of THC a company can produce in one year and on the maximum amount of marijuana it can produce per customer.
Marijuana has also been approved as a treatment for anxiety and depression, and to treat anxiety and other chronic conditions.
The government says the industry is in a strong position to develop and sell cannabis products.
It says it will continue its work with industry partners, including the province, to secure a safe, legal, and reliable production facility and to facilitate the sale of cannabis products