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Canada on Monday launched a public consultation seeking to tighten rules for individuals who are allowed to grow their own medical cannabis, in an effort to clamp down on pot seeping into black markets.

In a draft guidance issued for the consultation, Health Canada highlighted recent police raids and arrests at production sites where people were using licenses to “cover and support large-scale illegal production and sale.”

The move comes as Canada tries to fix its ailing pot market, where illegal producers sell more annually than hundreds of licensed cultivators, even over two years after the country became the first major nation to legalize weed in 2018.

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Households spent more than $3.1-billion (US$2.45-billion) buying non-medical pot from illicit channels last year versus $2.9-billion of legal purchases, according to Statistics Canada data.

“Abuse of the medical purposes framework undermines the integrity of the system that many patients and health care practitioners rely on to access cannabis to address their medical needs,” Health Canada said in the draft document.

Reuters first reported the news earlier on Monday.

The draft guidance for the first time sets out factors that the regulator may consider in refusing or revoking a registration for “personal production.” Factors include authorization of unjustified amounts and “criminal activity and/or diversion of cannabis.”

In January, Ontario Provincial Police seized over 180,000 cannabis plants and numerous vehicles and firearms by raiding illegal cultivation facilities, many of which exploit Health Canada’s personal medical weed cultivation licenses.

Under the rules, people using cannabis for medical purposes must get a daily amount authorized by medical care practitioners - doctors, nurses and social workers - to either be bought from official retailers or grown personally.

Health Canada said in December it was seeing a surge in the amount of pot personal cultivators were being authorized to grow.

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The number of patients registered for purchase from federally licensed retailers was 377,024 in September last year, a 24% increase from June. Meanwhile, registrations for personal cultivation grew 29% over the period to 43,211.

Even though personal cultivators remain a small fraction of overall patient registrations, these people are allowed to grow as much as 36 grams per day on average, compared with just 2 grams authorized for daily purchase from retailers.

As part of its public consultation, Health Canada said it was inviting Canadians to share their views on the factors that should be considered in “refusal or revocation of a registration on public health and public safety ground.”

The consultation will run for 60 days through May 7, the regulator said.

After the end of the two-month period, the regulator plans to finalize the guidance and make it public.

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