Four months ago, the rules changed on Brent Zettl.
His company, Prairie Plant Systems Inc., had been Health Canada's sole provider of medical marijuana for more than a decade, a deal that came with many strings attached – the company had to keep a low profile and hide the location of its growing operation. It had a research licence to develop its product, but the scale was small.
Then, in June, Health Canada changed the game. It announced it was essentially getting out of the medical marijuana business by opening the industry up to commercial production. There would now be an open market instead of the previous combination of Health Canada, Saskatoon-based Prairie Plant and at-home producers.
Mr. Zettl lost his monopoly, but quickly moved to seize the new market. And he's ahead of the pack. On Sept. 23, Prairie Plant and its new subsidiary CanniMed Ltd. were the first to be licensed as commercial producers of medical marijuana in Canada.
"Health Canada is really becoming the regulatory agency that their DNA has made them into," Mr. Zettl said in an interview. "They're leaving it up to the private sector to start manufacturing. It's as simple as that – they're just getting out of the business."
This week, CanniMed published its first order forms– one if you have a home, another if you're in a shelter or care facility, and a third if your doctor or health provider agrees to receive the shipment for you. Rather than going through Health Canada, patients need a health provider – a doctor, or another practitioner such as a nurse in provinces that allow it – to sign the form.
"After that, we're just like an online pharmacy. We can do the commerce part and ship the product to them afterward," Mr. Zettl said. Customers are limited to 150 grams of marijuana per month, and a doctor's prescription lasts for up to a year.
The company is the first to be licensed among 171 that have applied so far – a function of its existing relationship with Health Canada, in that Prairie Plant was already up to federal standards.
But Prairie Plant's product hasn't been very popular. Only 13 per cent of users in 2012 bought its product through Health Canada, with the vast majority growing at home. Now, though, that will be illegal, so users will have to risk arrest or pick a commercial producer.
Potential competition doesn't scare Mr. Zettl. Until now, his competition has been more underground – either at-home producers or street sales.
"In some ways, it's kind of refreshing to have legitimate competition. I don't mind being in an industry where everybody plays by the same rules," he said. "Right now, we have had the highest standards and not able to talk to them at all … it's hard to define it as medical if you don't have anything that points to the rigours and the discipline and the accountability in the manufacturing that make it safe for a medical thing. So, put it this way: I think we've had to follow a different set of rules than the other side."
Prairie Plant is moving quickly now to bring in the equipment it needs to ramp up production. It hopes to under-promise and over-deliver, and is therefore staying mum on how quickly it can start shipping medical marijuana directly to users.
"We're glad that we're through that process and now we can actually get started on manufacturing," Mr. Zettl said.