Canada’s landmark Cannabis Act saw it become the first major developed country to legalise and regulate cannabis in 2018.
While it’s understandably seen as both a beacon of hope and an important educator for those advocating for adult-use cannabis reform across the world, Canada has also played a profound role in the global expansion of medical cannabis.
According to Prohibition Partners’ Canadian Cannabis Report, available today, Canada has played a vital yet often overlooked role in the ‘seeding’ of medical cannabis markets around the world since the implementation of the Marihuana for Medical Purposes Regulations (MMPR) in 2014.
Canada’s role in the global cannabis landscape
In 2001, Canada legalised medical cannabis with the introduction of the Marihuana Medical Access Regulations Act (MMRA), positioning the country as a cannabis reform pioneer.
This was replaced by the MMPR in 2014, placing Canadian medical cannabis producers at the forefront of supplying emerging markets across the globe.
Ten years later, not only were many of the world’s medical cannabis markets initially supplied by Canadian products, but most continue to receive a significant portion of their market supply from the country.
According to Prohibition Partners, this is due both to Canada’s early entrance into the market, seeing it used ‘as a point of reference’ for emerging markets, and also the size of its economy.
In the fiscal year 2022-2023, Canadian medical cannabis exports increased by 50%, helping mitigate the 9% decline in domestic medical cannabis sales, with the combined value of exports and domestic sales making Canada the largest federally regulated medical cannabis industry in the world.
With emerging markets choosing to roll out cannabis reform incrementally, often through pilot programmes, these markets will continue to rely on Canada for both supply and policy direction, primarily due to early-market licensing capacity.
“The Canadian market retains a reference point role of incumbency, and, as a result, can evolve to meet global market needs far more quickly than operators in most other markets; in some cases driving the creation of new layers in the global value chain.”
EU GMP and ‘tolling’
In the five years since the legalisation of adult-use cannabis, the Canadian cannabis market has undergone a dynamic shift, marked by declining medical cannabis sales and intense competition in the recreational market due to oversupply issues.
Producers are now increasingly turning to exports, where they’ll often get a better price than selling domestically, seeing the export market surge.
In turn, this has led to a rise in ‘tolling’ or contract manufacturing operations around the world, particularly in Europe.
By design, Health Canada never required domestic producers to receive (Good Manufacturing Process) GMP accreditation, instead seeking to save on time and costs by simply keeping regulations consistent with GMP requirements.
However, medical markets across Europe are increasingly adopting EU-GMP as a standard, meaning Canadian exporters often rely on third-party processing facilities with EU-GMP certification to package and prepare their goods in order to be able to sell into Europe.
An example of this would be Organigram supplying bulk medical flowers to Germany’s Sanity Group, which provides EU-GMP contract manufacturing services, which in turn manufactures the imported bulk products into EU-GMP-certified finished products.
