5 Leading MMPR LP CEOs Weigh in on Important Rule Changes to Canada’s Cannabis Industry Ahead

Denis Arsenault, Neil Closner, Vic Neufeld, Terry Booth and Bruce Linton

This is a big month for Canada’s federal medical cannabis program, MMPR, as Health Canada must respond to the Allard ruling by August 24th, paving the way for home grow and possibly other changes.  The program, which was officially launched on April 1, 2014, is reaching critical mass, with over 53K registered patients as of March 31st and likely more than 70K at the end of July given the strong growth rates that we reported at the end of June.

MMPR has already evolved in many ways, perhaps the most significant of which was the inclusion of extracts, with the first license awarded last summer following the Smith case that mandated the program allow for cannabis derivatives. While most industry observers expect that Health Canada will permit some form of home growing by patients, there may be some other changes as well.  In order to gauge what the industry leaders expect, we asked several MMPR Licensed Producer CEOs to share their perspective.

Not surprisingly, all of the CEOs expect that home grow will be permitted. Denis Arsenault, CEO of Organigram (TSXV: OGI) (OTC: OGRMF), expects that patients with prescriptions will be able to to grow 6-8 plants, and he is also predicting that pharmacies will be able to dispense. Terry Booth, CEO of Aurora Cannabis (TSXV: ACB) (OTC: ACBFF), suggested that there would be home grow but with limits. He also expects to see changes to the Controlled Drug and Substance Act. Neil Closner, CEO of MedReleaf, expects the plant count to be limited.

Bruce Linton, CEO of Canopy Growth (TSX: CGC) (OTC: TWMJF), the parent of Tweed and Bedrocan Canada, thinks that the initial Health Canada move will be somewhat of a re-enabling of the prior system, MMAR, with corrections made in the future. He also believes that there could be further expansion in the forms of cannabis permitted for sale beyond dried flower and the current extracts. Finally,  Vic Neufeld, CEO of Aphria (TSXV: APH) (OTC: APHQF) expects some sort of designated grower status and believes that LPs may be the supplier of plant genetics for home growers. He also suggests that pharmacies could be added to distribution in order to combat the proliferation of illegal dispensaries.

We also asked each of the CEOs to speculate on when the first legal sales to adults without the need for a physician authorization might be:

  • Denis Arsenault: September 2017 to January 2018
  • Vic Neufeld: January 2018
  • Neil Closner: 2018
  • Terry Booth: Spring 2018
  • Bruce Linton: Fall 2018

Linton elaborated that his timing is based on having the system implemented about a year before the next federal elections, giving the Liberals time to address issues like tax collection and the black market. Booth suggested that Canada will need to dramatically increase production capacity to meet the expected demand once legal sales are permitted. According to Booth, “$1.6 billion needs to be spent on new production facilities in Canada in less than three years. Our conservative estimates expect close to 5 million pounds per year plus extracts are needed for a successful adult usage market. ”

What are you expecting in terms of MMPR changes?  When do you expect the first legal sales? Let us know in our LinkedIn Group, Cannabis Investors & Entrepreneurs.

Exclusive article by Alan Brochstein, CFA
Alan Brochstein, CFA
Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

Get Our Sunday Newsletter