Commercialization and Licensing

Health Canada states, "The Marijuana Medical Access Program (MMAP) provides seriously ill Canadians with reasonable and legal access to marijuana for medical purposes. In response to concerns heard from Canadians, the Government of Canada announced on June 17, 2011, that it is considering improvements to the Program. The proposed improvements would reduce the risk of abuse and exploitation by criminal elements and keep our children and communities safe," states Health Canada.

Health Canada's supply would be available until March 31, 2014. Supply provided by approved licensed producers, will also be available after the coming into force of the MMPR and will be the only source of supply after March 31, 2014.

Health Canada has stated that April 1st, 2014 is the anticipated date for the issuance of commercial licenses to the private sector, after which only commercially licensed producers will be permitted to grow and sell marijuana. Market forces and producers will determine the price of product, as is the norm with any other pharmaceutical product.

The proposed model will place Canada at the forefront of countries now providing legal access to medicinal cannabis. This opportunity presents vast potential for the sale of medicinal cannabis products in Canada as well as to other countries who wish to import cannabis products for qualified patients.

"The Health Canada regulations include no limits to the yield of a commercial grow-op as long as it has commensurate security plans. But the grow-ops will be subject to provincial laws and municipal bylaws," said Jeannine Ritchot, director of Health Canada's medical marijuana reform.

According to Health Canada, medical marijuana use in Canada has increased from less than 500 users in 2002 to more than 26,000 users today.

These new regulations create an unprecedented basis for an industrial-scale medical cannabis supply chain that does not require the producer to turn over possession of the crop to Health Canada.

Positioning for Commercial Success

The new regulations entail a production and distribution plan that would be the first Special Access Program for medicinal cannabis (medical marijuana) which does not rely upon a contractual relationship between the national health authority (Health Canada) and the producer of cannabis as a standardized unapproved drug product. The plan would allow for a limited number of private, commercial producers who will directly distribute the product to patients.

Chronicare intends to submit a Clinical Trials Application (CTA) and an associated Narcotic Production License for Scientific Purposes (NPLSP) application in advance of Health Canada finalizing new regulations. By establishing a lab pilot production facility to manufacture research-grade cannabis for its clinical trial, Chronicare will demonstrate its ability to manufacture pharmaceutical-grade cannabis and be better positioned for the new MMAP regulations.

Chronicare will demonstrate the ability to provide patients with reasonable and timely access to medical marijuana with safety and quality control being paramount, enhancing our status in successfully obtaining a commercial productions license.

The long term goal is to bring medical marijuana from its current status as an unapproved drug to the status of an approved drug of pharmaceutical quality. Successful drug approval would guarantee the ability to export under existing pharmaceutical conventions and enter markets which have yet to promulgate a medical cannabis exemption.

Potential Medical Benefits

Cannabis (marijuana) is a plant from Central Asia that is grown in many parts of the world today. The use of Cannabis for medicinal purposes dates back at least 3,000 years.

Cannabinoids, or phytocannabinoids are active chemicals in Cannabis that cause drug-like effects throughout the body, including the central nervous system and the immune system and may relieve pain and decrease inflammation. The main active cannabinoid in Cannabis is delta-9-THC.

In the past 20 years, researchers have studied how cannabinoids act on the brain and other parts of the body. Cannabinoid receptors (molecules that bind cannabinoids) have been discovered in brain cells and nerve cells in other parts of the body. The presence of cannabinoid receptors on immune system cells suggests that cannabinoids may have a role in immunity. Cannabinoids may be useful in treating the side effects of cancer and cancer treatment. Marijuana has beneficial effects on pain control, appetite, mood, and management of other chronic symptoms as a result of cancer. There are a multitude of potential medical benefits shown in peer reviewed studies including the following:

  • • Anti-inflammatory activity: fibromyalgia, arthritis
  • • Blocking cell growth: reduce invasiveness of cancer cells (cellular mechanisms underlying this effect were unclear)
  • • Preventing the growth of blood vessels that supply tumors
  • • Antiviral activity
  • • Neuropathic pain of various origin
  • • Post-Traumatic Stress Disorder
  • • Tourette Syndrome (improves tics and behavioural disorders)
  • • Insomnia
  • • Anxiety
  • • Mood and memory
  • • Muscle spasms, stiffness, tremors
  • • Chronic medications significantly reduced

Market Opportunities

There are approximately 15,000 patients enrolled in the Medical Marijuana Access Program and applications are increasing at a rate of 5,000 per year – a 20 percent yearly increase over the last 5 to 6 years. Using this data, the potential patient subscribing by the time the new Commercial Production Licensed grow-ops are operational in 2014 is in excess of 24,000.

Presently, almost 6 million Canadians fall under the Category 1 schedule of conditions for which medical marijuana is considered a treatment option and over 12 million could fall under Category 1 and 2.

Chronicare plans to establish distributions centres throughout Canada and integrate ourselves at every level of the medical community.