Cannabis Oils Hit Canada’s Medical Marijuana Market

By Omar Sacirbey

An Ontario-based medical marijuana producer has started selling cannabis oils to Canadian patients, becoming the first business to take advantage of a groundbreaking change to the country’s MMJ program.

Peace Naturals Project, one of 25 licensed medical cannabis producers in Canada, received approval from the country’s health agency in July to begin producing the oils.

On Monday, it became the first company to receive the green light to actually sell them.

Peace Naturals was ready to hit the ground running, having already tested its initial two batches of cannabis oil, Cerene and Omega, so that it could begin selling them immediately.

“We were prepared for this,” said Mark Gobuty, founder and CEO of Peace Naturals. “We knew we wanted to infuse cannabis oil into superfoods, so the moment we were allowed to do the research, we knew what we wanted to try.”

Gobuty added that the research and development process took only two to three weeks.

Cerene and Omega are for oral consumption, with the former using coconut oil and the latter chia oil as the carrier agents. Gobuty said he chose those oils because both contain ingredients that help fight arthritis and other pain ailments.

On Monday, the company sold 124 bottles containing 30 milliliters of oil. The oils will normally costs about $200, but Peace Naturals offered them at half off on the first day. If recipients fill out a questionnaire about the oils – how long is onset, taste, potency, and the like – they will get that first bottle free.

“It’s important to get feedback,” Gobuty said. “This is the first time in history a country’s government has issued a permit to sell cannabis oil.”

To get the cannabis oil process going, Peace Naturals invested a couple hundred thousand dollars in equipment, materials and research. The hardest part of the process, Gobuty said, was homogenizing the cannabis oil with the carrying agent oils.

Gobuty believes that once Peace Naturals has details ironed out about concentration and potency, edibles and extracts will account for about 70% to 80% of the company’s revenue – perhaps within the next 12 to 18 months. Gobuty said he expects extracts and non-smokables to account for $4 million to $5 million of $15 million in total sales in 2016, and that $20million of $28million in total sales in 2017 will be from extracts The company now has about 1,700 customers but expects to reach 3,000 by the end of February.

“We’ll start low and go slow,” Gobuty said.

The company’s announcement comes about six months after the Canadian Supreme Court ruled that patients could legally consume cannabis edibles and extracts, and about five months after Health Canada issued a statement officially permitting companies to produce non-smokable cannabis products.

Previously, patients could only smoke dried medical marijuana flower and were prohibited from making their own THC-infused goodies.

Since then, about half of Canada’s medical marijuana producers have sought permission to produce oils and extracts, and at least a few of those are ready but are waiting on formal approval from the government.

One of those companies, Tilray in British Columbia, has 20 extract products awaiting government approval for sale, including gel caps, topical lotions and liquid oils. Another company, Tweed Marijuana Inc. in Ontario, plans on releasing two or three extract products for starters, and then expanding its product line to 10 or more products.

Being first in the cannabis oil business is tremendous advantage, Gobuty said.

“We set a very high standard,” he said. Other companies “are also going to have to meet a very high standard, and it’ll be very tough, but it’s good for the industry.”

Omar Sacirbey can be reached at