The Allard Case – Where do we go from here?

What does this historic decision securing patient's right to grow mean for patients, producers and applicants under the MMPR?

What does the Allard decision say?

The decision has already been summarized ad nauseam, but here it is again in a nutshell: The Marihuana for Medical Purposes Regulations (MMPR), as currently written, are constitutionally invalid because they violate the plaintiffs’ section 7 Charter rights (to “life, liberty and security of the person”) by unduly restricting their access to medical cannabis. The Court found that forcing the plaintiffs to purchase their medical cannabis from a licensed producer (LP) impaired their health and safety since the evidence showed that “there is no guarantee that the necessary quality, strain and quantity will be available [from LPs] when needed at some acceptable level of pricing...due to the structure of the regulations and the characteristics of the market”. The Court rejected the government’s position that a prohibition on personal cultivation was justifiable given its inherent risks of fire, mould, theft and diversion.

allard

In Allard, the Court held that it was not feasible to simply strike certain words or provisions out of the MMPR in order to render it constitutionally sound, or to reinstate the MMAR. So the Court declared the MMPR, in its entirety, to be invalid but suspended this declaration of invalidity for a period of 6 months to give the government time to craft a new medical cannabis regulation.

I’ve seen some comments online hoping that the 6 month period passes without a new regulation in place, since cannabis would then effectively be legalized. The exact opposite is actually true, since without a medical cannabis regime in place, all possession, production and sale of cannabis would be illegal (under the Controlled Drugs and Substances Act). In any case, this won’t happen. There will either be an appeal or we’ll see a new MMPR.

The government has a 30 day appeal period. I have no idea whether it will appeal, but if it does it will be sending a very clear message that legalization will not include personal cultivation rights.

What does the decision mean for patients?

It doesn’t mean that you have an unfettered personal cultivation right. And it doesn’t mean you can start cultivating today (unless you fall within parameters of the Allard injunction which continues in effect for the time being). What it means is that you can expect a new version of the MMPR which will provide you with enhanced access to medical cannabis. I expect this to include personal cultivation, but what exactly will that look like and what else might change?

All sorts of questions arise around personal cultivation. Will a medical document from a physician still be required? If so, will already-nervous physicians be even more reluctant to sign a medical document which essentially amounts to an authorization to grow at home?

Will designated growers be permitted (or will LPs, at prescribed pricing levels, be the designated growers for those who cannot grow themselves)? Whether growing for yourself or via a designated grower, will multiple production licenses still be permitted in respect of the same site/address? These ‘collective’ grow ops have been a major source of diversion under the MMAR - I know the Court found the evidence on diversion to be lacking but who do you think the dispensaries are buying from?

What limits will be imposed on personal cultivation? Let’s not kid ourselves, there will be limits. I think we’ve seen that imposing a limit based solely upon a maximum number of plants is problematic.

The court in Allard noted that “with the right lighting and physical space, an individual could obtain the same yield from 6 plants as from 600”. This aspect of the MMAR created an unintended incentive to maximize the yield from the number of permitted plants, and then sell the surplus to finance cultivation costs (and beyond). Will you be able to supplement cannabis grown at home with cannabis or cannabis oil purchased from an LP? Will outdoor growing be permitted? And what additional restrictions might be imposed by municipalities through zoning by-laws?

Moving beyond personal cultivation, the biggest question for me is whether the government will take this opportunity to further improve access by making other changes to the MMPR (refer to some of my previous blog posts if you want a refresher on my complaints with the MMPR).

Most importantly, will we see the introduction of a retail channel of sale for medical cannabis? I found it particularly interesting that the Court observed that “dispensaries are at the heart of cannabis access” and attributed the “current trends in dispensary growth” to MMPR access problems.

Major pharmacy chains have now gone public with their interest in selling medical cannabis. I am sure Health Canada is giving this option careful consideration. Will the government view the sale of medical cannabis by pharmacies as a way to eliminate (or at least reduce) the demand for dispensaries (and perhaps address the threatened Charter challenges by dispensaries)?

Or (less likely in my opinion) will the government choose to wrap its arms around dispensaries and legitimize them through a licensing regime? The option to provide LPs themselves with the ability to create a retail point of sale also exists.

Will the government create a centralized registration system for the MMPR? One of the complaints I hear over and over again is how cumbersome it is to switch LPs. This is part of the access problem. Patients are reluctant to place the supply of their medicine in the hands of one LP, with no guarantee of an ongoing supply, and knowing the hassle of having to get a physician to write yet another medical document if they need to switch LP’s before their current medical document expires.

There are many other issues that could also be addressed (like further expanding the scope of what can be sold, relaxing security requirements on LPs to reasonable levels, etc.). I hope the government takes this opportunity to reflect upon nearly two years of experience administering the MMPR, and make additional improvements that will benefit both patients and LPs.

What does the decision mean for LPs?

Not much, at least not until we see what the new and improved MMPR looks like. There will be no mass exodus of patients from LPs. Most MMAR patients who wanted to continue growing did so, either pursuant to the injunction granted in Allard or in the shadow of it (even if they didn’t fall within its four corners). They have never been MMPR patients and they were never going to be. As many commentators have already noted, LPs looked beyond the medical cannabis horizon long ago. Most eyes are firmly fixed on legalization.

What does the decision mean for LP applicants?

This one is trickier. Although I haven’t seen any statement yet from the Office of Medical Cannabis (OMC), I expect they will say it is business as usual for the time being. We have seeing such encouraging improvement lately with movement in the processing queue, and increased transparency and communication, and I really hope that doesn’t change.

I hope this decision will not have a chilling effect on the OMC’s willingness to continue granting licences. I hope the attitude does not become ‘let’s wait and see how the dust settles when the new regulation is introduced’. LPs are not going anywhere. The majority of medical cannabis patients will continue to prefer to purchase from an LP, and the recreational market will require a massive supply of commercially grown cannabis. So hold steady LP applicants, just another bump in the road (I’m having a déjà-vu...have I said that before?).

FOR INFORMATIONAL PURPOSES ONLY. THIS DOES NOT CONSTITUTE LEGAL ADVICE.

Trina Fraser is a partner with Ottawa business law firm BrazeauSeller.LLP (www.brazeauseller.com). Her business law practice includes advising MMPR industry participants on regulatory, corporate and commercial issues.

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1 comment

  1. Ryder Management Reply

    Excellent article! Since the decision in Feb/16, how is it that Health Canada is granting production only licenses?

    http://www.hc-sc.gc.ca/dhp-mps/marihuana/info/list-eng.php