Article content continued

Illegal operators

A local Toronto dispensary operator, who declined to be identified, said that the motivation for illegal dispensary operators was to provide access to individuals who, for whatever reason, were either unable or unwilling to access marijuana through Health Canada’s MMPR protocol.

Under the MMPR regime, patients can obtain a prescription for marijuana from a doctor, which then requires registration with one of 25 MMPR licensed vendors, and then receipt of medical marijuana grown in MMPR-licensed facilities by mail only.

“Not everybody has the ability to adhere to that kind of regimen,” said the operator, “either through physical limitations or other reasons that we consider is their own business.”

Tilray, a Nanaimo-based licensed producer of medical marijuana, which was one of the first companies to receive a license, submitted lab results of samples of marijuana that it alleged were sourced from illegal marijuana dispensaries, and found to contain toxins, to Health Canada Minister Philpott in September.

That prompted Ms. Philpott to issue a press release that stated, “Our government has issued numerous statements to warn the public that they should not be purchasing products from dispensaries, compassion clubs or other illegal organizations and individuals.”

It has been suggested by numerous operators that the police raids on dispensaries were at least in part motivated by pressure from MMPR-licensed companies to crack down on dispensaries that might be eating into profitability.

James West is an investor and the author of the Midas Letter, an investing research report focused on Canadian markets. The views expressed are his own and are presented for general informational purposes only — they should not be construed as advice to invest in any securities mentioned.

James West and/or associated funds do not own shares in any securities mentioned in this article. For the full Midas Letter disclosure policy, click here. Postmedia and Midas Letter have a revenue sharing arrangement.