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The Lucknow Sentinel, 2016-01-06, Page 88 Lucknow Sentinel • Wednesday, January 6, 2016 AMMCan greenhouse inspected, Supreme comments on impact legalization could have Troy Patterson Kincardine's medical mari- huana facility received the Health Canada pre -license inspection of its facility in December 2015, as its owners watch how the new Liberal government's plans for the drug unfold. Advanced Medical Mari- huana Canada (AMMCan) and its flagship company, Supreme Pharmaceuticals, are looking positively at the opportunities the federal Liberals have laid out in their marihuana -friendly post-election approach to the substance. This, in contrast to former Prime Minister Stephen Harp- er's often demonized look at the drug during his 10 -year reign, including a comment during the 2015 election cam- paign where he said "mari- huana is infinitely worse" than tobacco use, debunked by Centre for Mental Health and Addiction experts as a being opposite to what ongoing medical research reveals. "What I really hope is with the way [Prime Minister Justin] Trudeau looks at marijuana, that it could be a little bit more streamlined," said AMMCan's Peter Herburger. "I hope they put the heavyweight on organ- izing the medical side first, before any changes are coming" Herburger expects legaliza- tion of marihuana could take a few a years, but for the time being streamlining the medical side of the substance will aid in that transition. When and if marijuana becomes a substance produced and regulated for public con- sumption under a new Liberal government is still to be deter- mined. But what is certain is if that move comes, Canada's existing supply management for the drug will streamline the process because of its thor- oughness in dealing with medi- cal marihuana production in Canada in recent years. "With the regulations we have on the medical side, from fertilizer, to everything, it's very controlled growing," Herburger said. "From the seed to the sale, it has to be safe" And safety requires training of staff on things as simple as learning to properlywipe sweat from one's brow to prevent con- tamination of the product, to more extensive rules and regu- lations during handling, pro- cessing and packaging. Business -case wise, legaliza- tion could open up a wider market for marihuana, but the value will remain in the high-grade medical market, which has been legally regu- lated in Canada for about 15 years. "That's where I'm concen- trating," he said. Supreme Pharmaceuticals, AMMCan's parent company, is looking at the opportunities posed by the change in govern- ment as something to plan for in the coming years. Supreme president John Fowler said the industry has been anticipating a change in government and the political climate that's more favourable towards medical marihuana. "Everybody in the medical marijuana industry, medical, recreational, service providers, were excited for the opportu- nity to have a government that sees marihuana as a positive issue and a positive file for the country, as opposed to a gov- ernment that saw marihuana as more of a trouble;" Fowler said. For us, it's a great move for- ward to have a government that really takes marihuana seri- ously and also have a commit- ment to take medical mari- juana seriously." Though recreational use is currently illegal, it's part of the talk on legalization in Canada, and Supreme will be investigat- ing those options for the Kin- cardine facility, they said. Production for such a market could be a parallel stream alongside the medical focus of the business, he said. American facilities in US states often pro- duce product for both medical and recreational uses. Years from now in a recrea- tional -use environment, sub- sidiaries of the business could be established to process and package marihuana, deriva- tives or other products for that new market, he said. Another option could see AMMCan's product sold and distributed to other companies interested in recreational rendering for that market. "I do believe that a recrea- tional system would be mir- rored on our medical system in terms of supply chain man- agement, and quality control," Fowler said. "We will assess business opportunities as they arise, but regardless, we will be committed to medical marihuana:' With the December inspec- tion being assessed, the com- pany will be waiting for approval and licensing to allow it to produce its first batch of medical marihuana. After the first product is produced, tested and approved, the company would then be allowed to mass- produce and prepare ship - Troy Patterson/Editor Supreme Pharmaceutical's Advanced Medical Marihuana Canada facility north of Kincardine is set for federal inspection of its converted greenhouse facility in the Bruce Energy Centre, which took place in December, 2015. r• From the seed to the sale, it has to be safe — AMMCan's Peter Herburger. ments for the marketplace. "I believe, in terms of our licensing, we'll have success before the government is able to make changes, and that's because we're so close to the finish line today," Fowler said. "However for the rest of our business, because the inspec- tion and license is the starting line and not the finish line, hav- ing aving a government that looks favourably on this file is a huge advantage to our ability to grow and expand our business, for our community here in Kincar- dine and for our shareholders:' AMMCan, along with about 1,300 other applicants, has waited over a year for inspec- tion from Health Canada fol- lowing renovations to the greenhouses at the Bruce Energy Centre north of Kincardine. The 342,000 -square -foot facility has about 16,000 -square -feet of growing area in 'Phase Zero' thatwas set for inspection. The first batch of medical -grade marihuana is expected to be about 501% for federal testing. Once into full production, the facilitywillhave about 20 staff producing about 6,000kg of marihuana a year at 'Phase Zero. 'Phase 1' would increase the facility by 80,000 square feet, with Phases 2-4 increasing the building enve- lope as years progress, employ- ing upwards of 100 people at its peak Fowler said what won't likely change is the "detailed, onerous process" required to establish medical marihuana production facilities, like the Kincardine pharmaceutical facility. Canada's Medical Mari- huana Market Fowler, a lawyer who worked for over 10 years in the medical marihuana industry's patient advocacy services before being called to the bar, said the value of recreational use is far higher than the medical sector. But the foundation and pathways built to maintain a supply manage- ment system in the medical sector will be a vital part of pro- viding product for a potential recreational market in Canada. He said numbers published by Dundee Securities estimate a possible $6.5 billion mari- huana marketplace in Can- ada, comprised of a $3-$5 bil- lion recreational market, in addition to the $1-$1.5 billion medical market. "This is obviously over time," said Fowler. "What's interesting though is arguably those dollars are spent today, this year, last year and next year. It's more about capturing black market into a legal sys- tem, into a regulated system and I think importantly, into a taxed system, versus making new consumers:' Fowler cited Colorado's challenges in legalizing mari- huana, which is now doing $100 million in business per month, in a state that has a population of 5 million, with a 60-40 recreational to medical market revenue split. "Medical marihuana is still very vibrant in Colorado and I believe regardless what hap- pens in Canada, medical mar- ihuana isn't going anywhere," he said. "It's helping people and they're going to continue to need it. And if people use it recreationally, it doesn't change that there's bona fide medical value, it seems, in medical marihuana!' But how does a US state dif- fer in its handling of policy versus the Canadian federal government? Fowler said the Colorado operations are legal only in the state, while the American federal government has cho- sen not to take action against the state as marihuana at the federal level is illegal, medi- cally and recreationally. This has forced operations there to deal only in cash, as federal banks will not take money earned through sales of the drug, which is also a missed opportunity for the govern- ment to collect taxes, he said. Medical Marihuana Infra- structure in Canada Fowler said with the federal infrastructure set up in Can- ada, via the Marihuana for Medical Purposes Regulations (MMPR), companies like AMMCan are "good to go:' "We can put our money in banks, we can get insurance on our businesses, we can use the stock market freely," said Fowler. "All these things are either prohibited or restricted in the United States. [While in Canada] You can use your [credit] card to buy medical marihuana... it's fully tracked, it's fully taxed, its a closed- loop regulatory system!' Fowler said his belief is Canada's regulations are the "best in the world;" and if rec- reational use is "mirrored" on the medical side of the indus- try, the system will be "world -leading!' "That's because it has a strong focus on supply chain management, consumer safety and detailed reporting/ compliance," he said. "It's amazing, if you go to the US, places like this don't exist." The capital costs, the qual- ity of employees, long-term planning of the business and professionalism required of Canada's medical marihuana industry isn't possible in the US market in comparison to Canada's established Ai I do believe that a recreational system would be mirrored on our medical system in terms of supply chain management, and quality control — Supreme Pharmaceutical's John Fowler. regulations, and the control of the supply chain. "For future consumers, medical or theoretically recre- ational, you have a huge amount of product safety that I don't believe you get with any marihuana, anywhere else in the world. And that should something if you're a consumer... you should be very excited about" These factors have made medical marihuana facilities attractive to investors over the past few years, but has also spurred thousands of applica- tions for licenses that created a backlog of assessment and inspections for Health Canada. "Today we're a medical marihuana company, and I don't think we'll ever going to abandon that commitment," he said. In a Dec. 3, 2015 Twitter post, Toronto's Cannabinoid Medical Clinic (CM Clinic) said over 30,500 patients are registered in the MMPR sys- tem, with 187,655 shipments to date at an average price of $7.95/gram For more information visit supreme.ca