Canada under growing pressure to lift medical marijuana import ban

A disparate group of countries, businesses and organizations is calling on the Canadian government to remove nontariff barriers effectively blocking commercial imports of unapproved medical cannabis, even as some local players say the ban is needed to protect squeezed domestic cultivators.

Businesses – some with their headquarters in Canada but production overseas – have joined countries such as Colombia and Jamaica in calling out Canada for prohibiting foreign competition within its medical marijuana industry, which largely remains closed to foreign exporters.

The Canadian Chamber of Commerce’s cannabis working group joined the call to allow foreign competition within Canada, albeit in a limited form.

And in October, the Colombian government raised concern about Canada’s commercial-import restriction with the World Trade Organization (WTO).

Industry sources say the crux of the issue is that Health Canada, the government body tasked with regulating imports and exports of cannabis, is dragging its feet in allowing commercial medical cannabis to be imported into the country.

Some executives say that puts Canada on shaky ground vis-à-vis international trade agreements, even as Canada is a world-leader in cannabis exports.

One company that would like to ship medical cannabis to Canada is Toronto-headquartered Avicanna.

“We are a Canadian company with all our R&D and clinical infrastructure in Canada, where our products are developed. And while we cultivate our cannabinoids and manufacture some of our finished products in Colombia, the only market we cannot export them to is our own country,” Avicanna CEO Aras Azadian said via email.

The company, which has medical products listed with Canada’s largest pharmacy chain, Shoppers Drug Mart, said it had to outsource manufacturing to Canadian companies to commercialize four of its brands in the nation.

However, business sources in Canada say a burdensome tax regime is already squeezing every penny it can out of cannabis producers, and allowing foreign competition would add a layer to an already challenging regulatory system.

“There’s no economic benefit on the whole of importing,” said Bruce Linton, an industry veteran and former chief executive officer of Smiths Falls, Ontario-based Canopy Growth.

“I think they are going to not (allow imports), and they shouldn’t, because you’re exporting jobs. From a bigger economic perspective, the jobs have landed where they were most desperately needed.”

Still, Canada is the only country in the world with a large regulated medical cannabis export market that does not allow imports.

Health Canada previously told MJBizDaily its “general policy is to issue import or export permits only in limited circumstances,” such as:

• Importing seeds and plants for a new license holder supplying the medical market.
• Importing prescription drugs that contain cannabis that are subject to premarket authorization.
• Importing small quantities of cannabis for scientific purposes.

From 2018 to 2020, Canada permitted the export of almost 30,000 kilograms (66,139 pounds) of dried medical cannabis. Another 35,500 liters (9,378 gallons) of cannabis oil was permitted for export overseas.

WTO concern

Medical cannabis producers from Jamaica to Colombia and Australia have cried foul over Canada’s reluctance to permit imports of medical cannabis for commercial sale.

In October, Colombia raised its concerns at a WTO committee on meeting on market access.

The committee’s next meeting is slated for Thursday, Dec. 9.

Clever Leaves, a Colombian cannabis producer with its head office in New York, said it would be interested in exporting medical cannabis to Canada.

The company said its operation in Colombia has received European Union-Good Manufacturing Practice certification, and the quality of its Colombian products is higher than many manufactured in Canada under Good Production Practices.

“This asymmetric approach to international trade by Canada is a violation of Canada’s international trade obligations under the WTO and Canada’s FTA with Colombia,” Clever Leaves CEO Kyle Detwiler told MJBizDaily. His FTA reference was to Canada’s own free trade agreements.

“Canada likes to say it is a trading nation and respects international trade laws and the rule of law, but here it clearly is not. We are allowing tons of commercial exports, but no commercial imports.”

Detwiler has lobbied Canada’s federal government to open up the Canadian market.

“The international trade of medical cannabis is allowed by the United Nations International drug treaties,” he said. “Further, Canada’s own Cannabis Act, in line with those treaties, allows both the import and export of medical cannabis.

“It is Health Canada that has imposed a policy of not complying with their own Act.”

Jamaica also opposes Canada’s import ban.

Last year, MJBizDaily reported on Jamaica raising objections about the ban with the Canadian government.

“It appears manifestly clear that the refusal of the Canadian government to allow the importation of commercial quantities of marijuana from Jamaica is putting the investment of several Canadian investors in Jamaica at risk,” said Audley Shaw, Jamaica’s then-agriculture minister.

Chamber wants imports

The Ottawa-based Canadian Chamber of Commerce, via its National Cannabis Working Group (NCWG), wants the country to address the simmering issue, arguing that the status quo potentially jeopardizes Canadian access to foreign markets.

In a letter to Canadian Prime Minister Justin Trudeau, the business group recommended that Canada “remove the prohibition of commercial medical imports, which will permit new medical cannabis products to be developed and delivered to patients while encouraging domestic investment.”

If Canada wants a robust medical cannabis export market, NCWG Co-Chair Nathan Mison said, the country needs to address commercial imports.

“We should discuss what imports and exports look like under reciprocal, preexisting international trade deals and conventions so that we’re not in violation,” he told MJBizDaily in a phone interview, “so we do not get proactive measures against Canada’s (cannabis) cultivators.”

“We’re saying, let’s take the blinders off so we can start having those conversations now to see what a healthy (import/export) balance is, so we can continue to expand Canadian businesses by fulfilling our international obligations.”

Mison suggests Canada take up the issue sooner than later “because I would hate to see Jamaica charge us with a WTO violation.”

“It won’t have to mean everything comes in. We’re saying, ‘Let’s have that conversation … to create those international opportunities and define what we can bring in that won’t hurt cultivators too much.'”

Matt Lamers can be reached at mattl@mjbizdaily.com.