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The Canadian Medical Cannabis Market: Growing Pains in 2021

Once a world leader when it comes to medical cannabis, Canada’s federally regulated program has stagnated since 2015. This stagnation has, in part, been a repercussion of the introduction of recreational cannabis in 2018. However, reports suggest patient numbers haven’t actually dropped, but that they may be seeking cannabis outside of medically approved channels.

Currently, the medical program in Canada connects patients with physicians who can prescribe, direct, and monitor cannabinoid therapy. All products within this sector come from licensed production facilities, specifically for medicinal applications. Yet, many patients are now forgoing the hassle and paperwork associated with a medical cannabis registration for adult-use and grey market cannabis.

The Canadian government may have pioneered federally regulated medical cannabis, but the medical sector now needs to adjust. Patients need a safe, regulated, and physician-directed supply of cannabis to ensure the best therapeutic results. With the Cannabis Act up for review in 2021, there is room for adjustment to the new market conditions.

A World First: The Canadian Medical Program

Legalization came to Canada after a court ruling in 2001, stating that Canadians had a constitutional right to use the plant as medicine. In the early years, the focus was on homegrown cannabis for personal use, but in 2012, legislation shifted. 

Instead of patients growing their own plants, the government opened up licenses for commercial operators to work within this federally regulated system. These changes created a formal commercial sector for medical cannabis. 

These changes led to rapid growth. The number of active, federally registered patients within the program rose steadily to a peak of 377,020 in mid-2020. According to the latest data from Stats Canada, the numbers have fallen slightly — down to 321,539. However, more than 35,000 Canadians are registered to cultivate their own plants for personal use. 

What products are favored by patients in Canada? While flower remains a popular prescription, by 2020, cannabis oil made up approximately 50 percent of all medical cannabis sales. To date, there are no federally licensed producers for edibles, topicals, or other types of products popular within the adult-use sector.

Following several years of debate, the Canadian government legalized recreational cannabis in 2018. Since adult-use cannabis came online in the country, the number of patients registered under the medical program has plateaued slightly. 

Accessibility a Major Hurdle for Patients

Why the stagnation? According to a recent survey by Medical Cannabis Canada (MCC) and funded by a subsidiary of Canopy Growth, nearly 40 percent of Canadians who currently use cannabis medicinally do not go through medicinal channels to source their products. 

A 2020 federal survey discovered that, while 14 percent of respondents indicated they relied on cannabis for medicinal purposes, only four percent of those actually held the proper documentation for this use.

More than 57 percent of patients surveyed by MCC turned to other sources because of the difficulty of finding a supportive practitioner to access medical cannabis. Most turned to recreational options, unlicensed dispensaries, or friends and family to source their relief.

As per Max Monahan-Ellison, MCC Boardmember, “It is essential for Canadians to have access to support from healthcare professionals to help them navigate medical cannabis safely and effectively.” 

With the current climate, Monahan-Ellison feels that “unfortunately, there is little incentive to access a medical document or use the legal medical channel, and many are being left to manage their treatment alone.”

The report suggested changes to the medical cannabis program including a recommendation to distribute through pharmacies (currently only available through mail order), eliminating taxes to improve affordability, and providing better medical benefits coverage. 

The Canadian Export Potential

Another area of the Canadian medical cannabis sector, and on that is expected to grow over the coming years, is the export potential. As European countries slowly introduce legalization, there is a rising demand for a stable and reliable source of medical grade products. Canada, a first-world country with an established and well-regulated sector, is ripe to become one of the world’s largest exporters.

However, the country still hasn’t reached its full potential. In 2020, Canada had permitted only roughly 21,000 kilograms of flower and 22,000 liters of oil for export. Yet, in contrast to what was permitted, only 15,684 kilograms of flower and 10,849 liters of oil was successfully exported. This represents a small fraction of what the country produces.

In the export sector, Mugglehead reported in 2019 that a total of 10 Canadian producers had received EU GMP certifications. Generally speaking, large multinational firms dominated the exporter tally, from Tilray to Canopy Growth. Most of Canada’s cannabis exports ended up in Germany and Israel, two comparatively established European markets.

Canada is uniquely positioned to become the global leader in medical cannabis exports. But, new international players like Uruguay and Columbia that can cultivate for far lower prices may beat them to the punch. 

Medical Cannabis in Canada Needs a Revisit

Canada may boast 350,000 registered cannabis patients, but these numbers have remained stagnant since the country’s launch of the adult-use market. 

Canadians are seeking medical cannabis outside of medical sources. The program needs to pivot to capture patients within a medical cannabis program under a physician-directed model.

In 2021, Canada is scheduled for a federal review of the 2018 Cannabis Act, covering topics as wide-ranging as packaging, home cultivation, and more. It is less clear whether the government will assess the medical cannabis sector.

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